Munchener Ruckversicherungs-gesellschaft Ag · XETR:MUV2
Munchener Ruckversicherungs-gesellschaft — Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München — Q2 2020 Earnings Presentation
51 slides from Munchener Ruckversicherungs-gesellschaft's earnings presentation, Aug 8, 2020
Slide 1: Half-year financial report as at 30 June 2020
Half-year financial report as at 30 June 2020 6 August 2020 Joachim Wenning Christoph Jurecka Image: Klaus Ohlenschläger / dpa Picture Alliance
Slide 2: Half-year financial report as at 30 June 2020
Half-year financial report as at 30 June 2020 1 Munich Re 2 Group finance 3 ERGO 4 Reinsurance 5 Backup Half-year financial report as at 30 June 2020 6 August 2020 2
Slide 3: Munich Re showing resilience against COVID-19 impact
Munich Re showing resilience against COVID-19 impact Business activities running smoothly Insurance risk well manageable Strong IT facilitating work from home for tens Significant short-term claims impact, but good of thousands of employees without any friction medium- and long-term business opportu
Slide 4: In times of COVID-19, Munich Re fulfils the economic and social role of (re)insurance
In times of COVID-19, Munich Re fulfils the economic and social role of (re)insurance Economy ▪ Gradual relaxation of lockdowns, Munich Re partially reversed again ▪ Fulfilling our mission as an insurer by ▪ Fiscal and monetary stimuli covering claims of €1.5bn in H1 2020 – ▪ V-, U-, W- or L-shaped
Slide 5: Despite COVID-19, business operations well on track – Strong capitalisation safeguards financial flexibility
Despite COVID-19, business operations well on track – Strong capitalisation safeguards financial flexibility … COVID-19 … Our strong capitalisation enables us to … … increases uncertainty, … seize ▪ Reinsurance market hardening – 7.6% premium growth (July: driving reinsurance profitable 8.3%) and 1.
Slide 6: … to pave the way for continued earnings growth – the basis for attractive total shareholder return
… to pave the way for continued earnings growth – the basis for attractive total shareholder return Ambition 2020 no longer achievable due to COVID-19 – underlying performance remains strong Peer 1 65.2% Guidance Actual Munich Re 46.5% 2.7 2.8 2.5 Peer 2 2.3 2.3 H1 2020 35.0% Net income normalised f
Slide 7: Outlook 2020
Outlook 2020 Group Gross premiums written Net result Return on investment1 ~€54bn withdrawn ~3% (before: ~€52bn) ERGO Combined ratio Gross premiums written1 Net result1 P-C Germany1 International1 ~17.5bn ~€530m ~92% ~94% Reinsurance Combined ratio Technical result, incl. fee income Gross premiums w
Slide 8: Group finance
Group finance 2 Image: Klaus Ohlenschläger / dpa Picture Alliance
Slide 9: Financial impact of COVID-19 on Munich Re well manageable
Munich Re – COVID-19 Financial impact of COVID-19 on Munich Re well manageable Life and Health Property-casualty P&L impact ▪ ~€100m in COVID-19-related ▪ ~€1.4bn in COVID-19- related losses across various lines losses, dominated by far by the US of business, whereas contingency losses account for t
Slide 10: Careful reserving for COVID-19 related claims
Munich Re – COVID-19 Careful reserving for COVID-19 related claims Life and Health Property-casualty ▪ H1 includes COVID-19 related claims expected to be ▪ H1 includes COVID-19-related claims incurred, reserved in incurred by 30 June, including a careful manner across affected lines of business. The
Slide 11: Good Q2 result given the challenging environment
Munich Re – Financial highlights Q2 2020 Good Q2 result given the challenging environment – Sound business development and balance sheet resilience Munich Re Q2 2020 (H1 2020) Net result Technical result Investment result Net result €m €m €m €579m (€800m) 1,893 3,676 3,617 1,626 Good underlying perf
Slide 12: Capital position
Munich Re – Capitalisation Capital position Equity €m Capitalisation €bn Equity 31.12.2019 30,576 Change in Q2 0.3 0.3 0.3 Consolidated result 800 579 0.3 0.3 3.8 3.9 3.7 Changes 2.8 3.7 Dividend –1,373 –1,373 Unrealised gains/losses 787 1,907 Exchange rates –280 –175 Share buy-backs –359 0 13.2 12.
Slide 13: Investment portfolio
Munich Re – Investments Investment portfolio Investment portfolio1 % Portfolio management in Q2 Land and buildings Fixed-interest securities ▪ Stable equity exposure – we remain cautious 4.9 (4.7) 55.1 (53.9) given ongoing disconnect with economic fundamentals TOTAL Miscellaneous2 ▪ Expansion of int
Slide 14: Investment result
Munich Re (Group) – Investments Investment result €m Q2 2020 Return1 H1 2020 Return1 H1 2019 Return1 Regular income 1,721 2.8% 3,265 2.6% 3,459 2.9% Write-ups/write-downs –108 –0.2% –1,567 –1.3% –181 –0.2% Disposal gains/losses 1,189 1.9% 1,566 1.3% 1,038 0.9% Derivatives2 –906 –1.5% 694 0.6% –329 –
Slide 15: ERGO
ERGO 3 Image: dem10 / iStockphoto Getty Images
Slide 16: ERGO Life and Health Germany
ERGO ERGO Life and Health Germany Gross premiums written €m Major result drivers €m H1 2019 4,658 H1 2020 H1 2019 Q2 2020 Q2 2019 Technical result 25 153 –129 –59 75 –134 Foreign exchange 0 Non-technical result 110 99 11 205 68 137 Divestments/investments 0 thereof investment result 1,757 2,000
Slide 17: ERGO Property-casualty Germany
ERGO ERGO Property-casualty Germany Gross premiums written €m Major result drivers €m H1 2019 2,035 H1 2020 H1 2019 Q2 2020 Q2 2019 Technical result 145 150 –5 85 127 –42 Foreign exchange 6 Non-technical result –20 –61 41 –16 –47 31 Divestments/investments 0 thereof investment result 93 71 22 42
Slide 18: ERGO Property-casualty Germany
ERGO ERGO Property-casualty Germany Combined ratio % Gross premiums written in H1 2020 (H1 2019) €m ◼ Loss ratio ◼ Expense ratio Other Motor 2018 96.0 186 (163) 470 (450) 62.5 33.4 2019 92.3 60.3 32.0 H1 2020 92.9 61.5 31.5 Marine 108 (103) Q2 2020 92.5 62.0 30.5 TOTAL Fire/property €2,135m 444 (409
Slide 19: ERGO International
ERGO ERGO International Gross premiums written €m Major result drivers €m H1 2019 2,519 H1 2020 H1 2019 Q2 2020 Q2 2019 Technical result 111 95 16 75 51 24 Foreign exchange –21 Non-technical result 19 –42 61 0 –18 18 Divestments/investments –90 thereof investment result 179 160 19 79 81 –2 Organ
Slide 20: ERGO International
ERGO ERGO International Combined ratio % Gross premiums written in H1 2020 (H1 2019) €m Property-casualty Life 94.5 95.4 95.0 94.8 95.2 1,333 (1,444) 315 (345) 93.3 91.8 90.1 TOTAL €2,422m (€2,519m) Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Health 2018 2018 2019 2019 2019 2019 2020 2020 774 (731) H1 2020 P-C H1 H1 Li
Slide 21: Reinsurance
Reinsurance 4 Image: John Lund Getty Images
Slide 22: Reinsurance Life and Health
Reinsurance Reinsurance Life and Health Gross premiums written €m Major result drivers €m H1 2019 5,636 H1 2020 H1 2019 Q2 2020 Q2 2019 Technical result 21 129 –108 7 44 –37 Foreign exchange 60 Non-technical result 96 266 –170 44 161 –117 Divestments/investments 0 thereof investment result 400 5
Slide 23: Reinsurance Property-casualty
Reinsurance Reinsurance Property-casualty Gross premiums written €m Major result drivers €m H1 2019 10,327 H1 2020 H1 2019 Q2 2020 Q2 2019 Technical result 217 1,366 –1,149 291 948 –657 Foreign exchange 170 Non-technical result 428 35 394 122 9 114 Divestments/investments 0 thereof investment re
Slide 24: Reinsurance Property-casualty – Combined ratio
Reinsurance Reinsurance Property-casualty – Combined ratio % ◼ Basic losses ◼ Major losses ◼ Expense ratio 2018 99.4 53.6 11.6 34.2 111.6 2019 100.2 51.4 15.2 33.6 105.1 106.0 103.9 99.9 97.3 H1 2020 103.0 54.4 18.0 30.5 100.7 Q2 2020 99.9 54.1 14.8 31.0 86.9 Major Reserve Normalised losses Nat cat
Slide 25: July renewals
Reinsurance – July renewals 2020 July renewals Total property-casualty book1 % Regional allocation of July renewals % Remaining business Business up for renewal in January Worldwide North America 30 46 22 31 TOTAL Asia/Pacific/Africa €3.5bn 30 Europe South America 6 10 TOTAL €22bn Nat cat shares of
Slide 26: Positive price dynamic continues and broadens
Reinsurance – July renewals 2020 Positive price dynamic continues and broadens July renewals 2020 % 100 –11,9 88.1 +8.0 +12.2 108.3 ▪ Positive pricing dynamics €m 3,475 –412 3,063 +279 +423 3,765 continue – particularly in regions and lines of Change in premium +8.3% business with high loss Thereof
Slide 27: Backup
Backup 5 Image: imaginima / Getty Images
Slide 28: Segment income statement Q2 2020
Backup: Group finance and risk Segment income statement Q2 2020 €m Reinsurance Reinsurance ERGO ERGO ERGO Total L/H1 P-C L/H Germany P-C Germany International Q2 2020 Gross premiums written 3,332 5,524 2,149 696 1,126 12,827 Net earned premiums 2,955 5,401 2,214 852 1,093 12,515 Income from technica
Slide 29: Segment income statement H1 2020
Backup: Group finance and risk Segment income statement H1 2020 €m Reinsurance Reinsurance ERGO ERGO ERGO Total L/H1 P-C L/H Germany P-C Germany International H1 2020 Gross premiums written 6,411 11,680 4,464 2,135 2,422 27,112 Net earned premiums 5,732 10,988 4,489 1,718 2,234 25,161 Income from te
Slide 30: Actual vs. analysts' consensus
Backup: Group finance and risk Actual vs. analysts’ consensus Operating result – Actual vs. analysts’ consensus1 €m KPIs – Actual vs. analysts’ consensus1 €m Q2 2020 Consensus Delta Q2 2020 Consensus Impact2 Reinsurance Property-casualty 414 294 120 Combined ratio 99.9% 101.2% 72 Reinsurance Life an
Slide 31: Premium development
Backup: Group finance and risk Premium development Gross premiums written €m Segmental breakdown €m Reinsurance ERGO Property-casualty Life and Health Germany H1 2019 25,175 11,680 (43%) ( 13.1%) 4,464 (16%) ( –4.1%) Foreign exchange 215 ERGO TOTAL Divestments/ Property-casualty Germany investment
Slide 32: Development of combined ratio
Backup: Reinsurance Development of combined ratio Combined ratio vs. basic losses (%) Combined ratio 160.9 Basic loss ratio 103.9 102.0 100.7 105.1 97.3 103.9 111.6 106.0 99.9 88.6 86.9 54.1 55.6 53.2 55.7 55.3 50.4 54.8 50.1 54.7 46.4 54.7 54.1 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 201
Slide 33: Return on investment by asset class and segment
Backup: Group finance and risk – Investments Return on investment by asset class and segment H1 2020 Regular Write-ups/ Disposal Extraord. Other ᴓ Market %1 income -downs result derivatives result inc./exp. RoI value (€m) Afs fixed-income 2.1 –0.0 1.0 0.0 0.0 3.1 133,562 Afs non-fixed-income 5.1 –17
Slide 34: Investment result – Reinsurance
Backup: Investments Investment result – Reinsurance Reinsurance Life and Health (€m) Q2 2020 Return1 H1 2020 Return1 H1 2019 Return1 Regular income 190 2.6% 386 2.6% 385 2.8% Write-ups/write-downs 4 0.1% –14 –0.1% 0 0.0% Disposal gains/losses 24 0.3% 50 0.3% 219 1.6% Derivatives2 –13 –0.2% 21 0.1% –
Slide 35: Investment result – ERGO
Backup: Investments Investment result – ERGO Life and Health Germany (€m) Q2 2020 Return1 H1 2020 Return1 H1 2019 Return1 Regular income 946 3.0% 1,768 2.8% 1,853 3.0% Write-ups/write-downs –94 –0.3% –1,244 –2.0% –109 –0.2% Disposal gains/losses 883 2.8% 1,064 1.7% 589 1.0% Derivatives2 –723 –2.3% 3
Slide 36: Investment result – ERGO
Backup: Investments Investment result – ERGO International (€m) Q2 2020 Return1 H1 2020 Return1 H1 2019 Return1 Regular income 91 1.9% 176 1.9% 187 2.1% Write-ups/write-downs 22 0.5% –22 –0.2% 30 0.3% Disposal gains/losses 8 0.2% 19 0.2% –8 –0.1% Derivatives2 –35 –0.7% 19 0.2% –37 –0.4% Other income
Slide 37: Investment portfolio
Backup: Investments Investment portfolio Investment portfolio % Fixed-interest securities1 % Land and buildings Fixed-interest securities Structured products Governments/ 4.9 (4.7) 55.1 (53.9) 3 (4) Semi-government Corporates 63 (63) Shares, equity funds TOTAL 19 (18) TOTAL and participating interes
Slide 38: Fixed-income portfolio €213 bn
Backup: Investments Fixed-income portfolio Total Fixed-income portfolio % Bank bonds Governments/ 2 (1) Semi-government 54 (53) Structured products 2 (2) Loans to policyholders/ TOTAL mortgage loans 4 (4) €213bn Cash/Other 6 (5) Corporates 13 (13) Pfandbriefe/ Covered bonds 19 (21) Approximation – n
Slide 39: Fixed-income portfolio
Backup: Investments Fixed-income portfolio Total Rating structure % Regional breakdown % NR1 AAA Without With Total 5 (5) 42 (43) policyholder participation 30.6.2020 31.12.2019 Germany 4.8 21.9 26.7 26.8 <BB 1 (0) TOTAL US 14.4 1.7 16.2 15.6 AA 2.2 5.0 7.2 7.3 BB €213.3bn 24 (24) France UK 2.8 2.0
Slide 40: Fixed-income portfolio
Backup: Investments Fixed-income portfolio Governments/semi-governments Rating structure % Regional breakdown % NR AAA Without With Total 0 (0) 44 (43) policyholder participation 30.6.2020 31.12.2019 Germany 3.6 21.0 24.5 23.9 <BB 0 (0) TOTAL US 16.0 1.2 17.2 16.5 AA Supranationals 1.3 5.5 6.8 6.7 B
Slide 41: Fixed-income portfolio
Backup: Investments Fixed-income portfolio Pfandbriefe/covered bonds Rating structure % Regional breakdown % NR AAA 30.6.2020 31.12.2019 1 (1) 76 (77) Germany 33.1 35.4 France 19.7 19.5 BBB UK 10.2 9.8 0 (0) TOTAL Netherlands 8.3 8.4 A €41.2bn Sweden Norway 6.1 5.4 5.9 5.4 2 (2) Spain 1.9 1.8 AA Ita
Slide 42: Fixed-income portfolio
Backup: Investments Fixed-income portfolio Corporate bonds (excluding bank bonds) Rating structure % Regional breakdown % NR AAA 30.6.2020 31.12.2019 0 (0) 2 (2) Industrial goods and services 14.1 14.2 <BB Utilities 13.2 13.6 3 (2) TOTAL AA Oil and gas 11.2 10.9 BB €28.8bn 5 (5) 15 (11) Financial se
Slide 43: Fixed-income portfolio
Backup: Investments Fixed-income portfolio Structured products Structured products portfolio (at market values): Breakdown by rating and region €m Rating Region Market-to- AAA AA A BBB <BBB NR USA + RoW Europe Total par ABS Consumer-related ABS1 157 92 80 0 0 0 208 122 330 100% Corporate-related ABS
Slide 44: Fixed-income portfolio
Backup: Investments Fixed-income portfolio Bank bonds Rating structure % Regional breakdown % Total NR AAA Senior bonds Subordinated Loss-bearing 30.6.2020 31.12.2019 1 (1) 1 (1) US 24.4 7.6 0.4 32.3 35.4 Canada 11.2 0.0 0.0 11.2 11.4 <BB UK 7.7 1.3 0.2 9.1 7.2 1 (0) TOTAL AA Germany 6.5 0.2 1.8 8.6
Slide 45: Sensitivities to interest rates, spreads and equities
Backup: Investments Sensitivities to interest rates, spreads and equities1 Sensitivity to risk-free interest in €bn (change in basis points) –50bps –25bps +50bps +100bps Change in market value, gross +9.9 +4.8 –8.9 –16.9 Change in on-balance-sheet reserves, net +2.5 +1.2 –2.3 –4.4 Change in off-bala
Slide 46: On- and off-balance-sheet reserves
Backup: Investments On- and off-balance-sheet reserves €m 31.12. 31.12. 31.3. 30.6. 2018 2019 2020 2020 in Q2 Market value of investments 231,876 247,310 247,196 249,858 2,662 Total reserves 22,002 33,120 31,117 35,321 4,205 On-balance-sheet reserves Fixed-interest securities 4,953 10,738 9,809 13
Slide 47: On- and off-balance-sheet reserves
Backup: Investments On- and off-balance-sheet reserves €m On-balance-sheet reserves Off-balance-sheet reserves1 Total reserves (gross) 15,544 19,778 Provision for deferred premium refunds –6,079 –11,790 Deferred tax –2,183 –2,420 Minority interests –7 – Consolidation and currency effects –188 – Shar
Slide 48: Changes to shares in circulation
Backup: Shareholder information Changes to shares in circulation Acquisition of Retirement of Weighted average number of shares in circulation Shares 31.12. own shares in own shares in 30.6. (millions) 2019 H1 2020 H1 2020 2020 (millions) 148.7 143.6 140.5 140.1 Shares in 141.5 –1.4 – 140.1 circulat
Slide 49: Financial calendar
Backup: Shareholder information Financial calendar 2020 5 November Quarterly statement as at 30 September 2020 8 December Investor Day 2021 Balance sheet media conference for 2020 financial statements 25 FEBRUARY Analysts' and Investors' call 17 MARCH Annual report (Group), Annual report (Company) 2
Slide 50: For information, please contact
Backup: Shareholder information For information, please contact Investor Relations Team Christian Becker-Hussong Thorsten Dzuba Christine Franziszi Head of Investor & Rating Agency Relations Tel.: +49 (89) 3891-8030 Tel.: +49 (89) 3891-3875 Tel.: +49 (89) 3891-3910 Email: tdzuba@munichre.com Email:
Slide 51: Disclaimer
Disclaimer This presentation contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the a