19 slides from Munchener Ruckversicherungs-gesellschaft's conference presentation, Sep 8, 2024
Slide 1: RVS Monte Carlo 2024 – Munich Re media conference
Image: hanohiki / stock.adobe.com RVS Monte Carlo 2024 Munich Re media conference 8 September 2024 Thomas Blunck, Stefan Golling
Slide 2: Agenda
Agenda Overall market environment ▪ Inflation and interest rates ▪ Capacity and Alternative Risk Transfer ▪ Sector profitability ▪ Our strategy Thomas Blunck RVS Monte Carlo 2024 8 September 2024 2
Slide 3: Reinsurance markets are generally stable, with slightly higher capacity
Reinsurance markets are generally stable, with slightly higher capacity De-globalisation, geo- Slight increase in RI political uncertainties market capacity General Relatively weak GDP outlook market Nat cat loss trend environment Uncertain inflation Volatility in expectations + real capital market
Slide 4: Weak global growth, inflation above former averages
Weak global growth, inflation above former averages Upside risks for inflation and downside risks for growth ▪ Relatively weak global growth in 2024 and 2025 does not ▪ CPI inflation in advanced economies to decline on a path toward provide a strong or resilient foundation target of 2% in 2025 ▪ Dow
Slide 5: Multiyear RoE in reinsurance sector still disappointing
Multiyear RoE in reinsurance sector still disappointing Volatility in the capital market underscores need for risk-adequate UW margins 1 Source: AON, S&P Capital IQ 2 Source: Bloomberg as of 20 August 2024 RVS Monte Carlo 2024 8 September 2024 5
Slide 6: Reinsurance market stability maintained
Reinsurance market stability maintained Traditional capital recovered as expected, no major new entrants observed Trends Traditional RI market ▪ Dedicated capital has recovered as expected, with no new material capital or new class of reinsurance capital entering the market ▪ Equity levels are stabi
Slide 7: Following strong years, growth dynamics are likely to normalise
Following strong years, growth dynamics are likely to normalise Global premium development 2021–2023/2024e–2026e P-C RI: Ceded premiums 2023 P-C RI and PI real1 growth rates (CAGR) RI PI 21–23 24–26 21–23 24–26 Europe € 29% 3% 1–2% 1% 2% North America € 39% 7% 1–2% 4% 3% Asia-Pacific € 21% 2% 3–4% 2
Slide 8: Munich Re: A strong and reliable partner
Munich Re: A strong and reliable partner Diversified business model RI and PI in the group, reinsurance diversified into P&C, Specialty and L/H and geographically balanced worldwide Consistent and reliable partner Independence from the retro market allows Munich Re to provide capacity Munich Re even
Slide 9: Agenda
Agenda Renewal topics – Underwriting discipline to continue ▪ Casualty claims inflation still widely underestimated ▪ Cyber insurance becoming sustainable ▪ Natural catastrophe loss trends Stefan Golling RVS Monte Carlo 2024 8 September 2024 9
Slide 10: Aggregated January – July 2024 treaty renewals
Aggregated January – July 2024 treaty renewals Active portfolio management is key even in a good overall market environment Property XL When terms & conditions are met and retentions are reasonable, we have no capacity restrictions – Our robust UW capabilities, global diversification and independenc
Slide 11: High reserve pressure remains a sector-wide concern in 2024
High reserve pressure remains a sector-wide concern in 2024 Current trend indicates worsening of reserve risk in the sector ▪ H1 2024 earnings calls: continued reserve strengthening reported ▪ Social inflation/legal system abuse remains a key driver ▪ “N m ” m f appears to be also widely underestima
Slide 12: Claims inflation eating into results in most UW years
Claims inflation eating into results in most UW years Deep dive into US Excess Casualty as an indicator1 Overall casualty market characteristics ▪ Substantial market corrections ▪ claims inflation unawareness ▪ the best underwriting companies, address legal system abuse estimate claims inflation tra
Slide 13: Cyber: Risk expertise and UW discipline
Cyber: Risk expertise and UW discipline Cyber insurance becoming sustainable 2017–2024 Overall cyber market set to grow further Munich Re focuses on disciplined underwriting within clearly ▪ Reinsurers consistently offer meaningful capacity defined risk appetite ▪ Ongoing refinement of modelling in
Slide 14: Fit-for-purpose cyber accumulation risk management is key
Fit-for-purpose cyber accumulation risk management is key Clearly defined risks and limits of insurability Virus/Malware Global outbreak of widespread, Objectives of untargeted and self-reproducing malware Accumulation Control ▪ Identification of worst-case scenarios and cascading Data Breach Accumu
Slide 15: Number of years with US$ 100bn insured losses on the rise
Number of years with US$ 100bn insured losses on the rise Peak perils cause the volatility, while non-peak perils fuel the trend Development and loss trends ▪ “ ” “ ” tropical cyclones and European winter storms that can impact the solvency of an insurer have traditionally been a focus area of model
Slide 16: Natural catastrophes – growing exposures, but manageable
Natural catastrophes – growing exposures, but manageable Munich Re nat cat loss ratio vs budget ▪ Nat cat risks captured well in our risk models, which are continuously updated to reflect impact of climate change and other claims drivers ▪ Real-time accumulation management platform to steer portfoli
Slide 17: Agenda – Summary
Agenda Summary: R ’ Thomas Blunck RVS Monte Carlo 2024 8 September 2024 17
Slide 18: Striving to be the quality leader and strategic partner
Striving to be the quality leader and strategic partner No major change in our strategy Very strong diversification and We provide long- and prefer strategic partnerships and reliable capacities Quality leader with superior client orientation Our broad and in-depth risk We offer client-centric a
Slide 19: Q&A
Image: hanohiki / stock.adobe.com Q&A 8 September 2024 Thomas Blunck, Stefan Golling