41 slides from Munchener Ruckversicherungs-gesellschaft's earnings presentation, Nov 9, 2016
Slide 1: Quarterly statement as at 30 September 2016
Source: Shutterstock [M] Quarterly statement as at 30 September 2016 9 November 2016 Jörg Schneider
Slide 2: Agenda
Agenda 1 Munich Re (Group) 2 2 ERGO 8 3 Munich Health 14 4 Reinsurance 16 5 Outlook 20 6 Backup 22 Quarterly statement as at 30 September 2016 2
Slide 3: Munich Re (Group) – Financial highlights 9M 2016: Business highlights Q3 2016
Munich Re (Group) – Financial highlights 9M 2016 Business highlights Q3 2016 Developing innovative propositions ERGO completes acquisition of ATE with digital insurance start-ups and and becomes largest property- digital verticals, e.g. Slice, Trov casualty insurer in Greece ERGO Strategy Programme
Slide 4: After pleasing Q3 result, annual profit to significantly exceed €2.3bn guidance
Munich Re (Group) – Financial highlights 9M 2016 After pleasing Q3 result, annual profit to significantly exceed €2.3bn guidance Munich Re (Group) Q3 2016 (9M 2016) Net result Technical result €m Investment result €m Net result €m €684m (9M: €2,095m) 2,602 5,872 5,942 2,391 2,290 Good underwriting p
Slide 5: Munich Re (Group) – Capitalisation: IFRS capital position
Munich Re (Group) – Capitalisation IFRS capital position Equity €m Capitalisation €bn Equity 31.12.2015 30,966 Change Q3 0.4 0.4 0.4 0.4 0.3 Consolidated result 2,095 684 4.3 4.3 4.2 4.4 4.4 Changes Dividend –1,329 – Unrealised gains/losses 2,315 304 Exchange rates –565 –177 Share buy-backs –711 –31
Slide 6: Munich Re (Group) – Investment portfolio
Munich Re (Group) – Investment portfolio Investment portfolio Investment portfolio1 % Portfolio management in Q3 Land and buildings Fixed-interest securities Ongoing geographic diversification 2.7 (2.9) 56.2 (55.7) Slight increase in corporate bonds Shares, equity funds and participating interes
Slide 7: Munich Re (Group) – Investment result
Munich Re (Group) – Investment result Investment result Investment result €m Q2 2016 Return1 Q3 2016 Return1 9M 2016 Return1 9M 2015 Return1 Regular income 1,823 3.1% 1,550 2.6% 5,001 2.8% 5,588 3.1% Write-ups/write-downs –22 –0.0% –43 –0.1% –284 –0.2% –653 –0.4% Disposal gains/losses 910 1.5% 696 1
Slide 8: ERGO
ERGO Quarterly statement as at 30 September 2016 8
Slide 9: ERGO Life and Health Germany
ERGO ERGO Life and Health Germany 9M 2016 vs. 9M 2015 Gross premiums written €m Major result drivers €m 9M 9M Technical result 9M 2015 7,025 2016 2015 Q3: Decrease mainly due to usual Foreign exchange –2 Technical result 207 263 –55 assessment of interest-rate assumptions in Life –€97m/–€66m (gr
Slide 10: ERGO Property-casualty Germany (1)
ERGO ERGO Property-casualty Germany (1) 9M 2016 vs. 9M 2015 Gross premiums written €m Major result drivers €m 9M 9M Technical result 9M 2015 2,529 2016 2015 9M: Combined ratio up slightly to 96.0% Foreign exchange 0 Technical result 124 141 –17 9M: Expansion of title insurance caused higher ex
Slide 11: ERGO Property-casualty Germany (2)
ERGO ERGO Property-casualty Germany (2) Combined ratio % Gross premiums written €m Loss ratio Expense ratio Other 279 582 Motor 2014 95.3 63.1 32.2 2015 97.9 64.7 33.2 Legal protection 309 9M 2016 96.0 61.3 34.7 Q3 2016 96.1 62.8 33.3 TOTAL 103.9 €2,566m 98.1 98.6 97.1 96.1 Fire/property 453 96.
Slide 12: ERGO International
ERGO ERGO International 9M 2016 vs. 9M 2015 Gross premiums written €m Major result drivers €m 9M 9M Technical result 9M 2015 2,936 2016 2015 Life: –€119m (9M) Foreign exchange –96 Technical result –33 49 –82 Usual assessment of interest-rate assumptions in Belgium in Q3: Divestments/investments
Slide 13: ERGO International – Property-casualty
ERGO ERGO International – Property-casualty Combined ratio % Gross premiums written – Property-casualty €m Loss ratio Expense ratio Other 287 710 Poland 2014 97.3 58.5 38.8 Greece 132 TOTAL 2015 104.7 65.3 39.4 €1,849m 9M 2016 98.5 59.5 39.0 Turkey 185 535 Legal protection Q3 2016 98.6 60.1 38.5
Slide 14: Munich Health
Munich Health Quarterly statement as at 30 September 2016 14
Slide 15: Munich Health
Munich Health Munich Health 9M 2016 vs. 9M 2015 Gross premiums written €m Major result drivers €m 9M 9M Technical result 9M 2015 4,260 2016 2015 9M: Overall combined ratio at 99.3% Foreign exchange –101 Technical result 32 33 –1 (–0.2%) Divestments/investments 0 Reinsurance: 100.9% (+0.1%) Non
Slide 16: Reinsurance
Reinsurance Quarterly statement as at 30 September 2016 16
Slide 17: Reinsurance Life
Reinsurance Reinsurance Life 9M 2016 vs. 9M 2015 Gross premiums written €m Major result drivers €m 9M 9M Technical result 9M 2015 7,653 2016 2015 Q3: Strong contribution mainly from Foreign exchange –263 Technical result 318 247 71 Asia, Canada and Europe supported by one-off effects Divestments
Slide 18: Reinsurance Property-casualty
Reinsurance Reinsurance Property-casualty 9M 2016 vs. 9M 2015 Gross premiums written €m Major result drivers €m 9M 9M Technical result 9M 2015 13,583 2016 2015 9M: Major loss ratio clearly below Foreign exchange –330 Technical result 1,642 1,870 –228 expectation of 12.0% Q3: Lower basic losses
Slide 19: Reinsurance – Combined ratio
Reinsurance Combined ratio Combined ratio % Basic losses Major losses Expense ratio 2014 92.7 53.0 7.2 32.5 99.8 2015 89.7 50.8 6.2 32.6 94.5 9M 2016 93.7 55.2 7.2 31.3 92.3 93.3 91.2 Q3 2016 92.5 55.3 6.6 30.6 92.5 88.4 Major Reserve Normalised losses Nat cat Man-made releases1 combined ratio
Slide 20: Outlook
Outlook Quarterly statement as at 30 September 2016 20
Slide 21: Outlook 2016
Outlook 2016 Munich Re (Group) Net result Gross premiums written Significantly above €2.3bn €47–49bn (prev. €2.3bn) Focus on bottom-line growth prevails Return on investment Combined ratio ~3% ~95% ~98% Solid return given ongoing Reinsurance ERGO Germany low-interest-rate environment ~99% ~99% Munic
Slide 22: Backup
Backup Quarterly statement as at 30 September 2016 22
Slide 23: Premium development
Backup: Munich Re (Group) Premium development Gross premiums written €m Segmental breakdown €m Reinsurance ERGO 9M 2015 37,986 Property-casualty Life and Health Germany 13,733 (37%) ( 1.1%) 6,823 (19%) ( –2.9%) Foreign exchange –792 ERGO Property-casualty Germany 2,566 (7%) ( 1.4%) Divestments/ i
Slide 24: Reconciliation of operating result with net result
Backup: Munich Re (Group) Reconciliation of operating result with net result Reconciliation of operating result with net result €m 9M 2016 Q3 2016 Operating result 3,202 1,014 Other non-operating result –313 –112 Goodwill impairments –9 0 Net finance costs –162 –54 Taxes –623 –164 Net result 2,095 6
Slide 25: Actual vs. analysts’ consensus
Backup: Munich Re (Group) Actual vs. analysts’ consensus Operating result – Actual vs. analysts’ consensus1 €m Major developments in Q3 2016 Q3 2016 Consensus Delta Reinsurance Property-casualty Combined ratio: 92.5% (consensus: 91.9%) – major-loss ratio: 6.6%, Reinsurance P-C 705 768 –63 reserve re
Slide 26: Reinsurance – Development of combined ratio
Backup: Reinsurance Development of combined ratio Combined ratio vs. basic losses % Combined ratio Basic loss ratio 101.4 91.3 91.2 92.3 93.3 94.5 99.8 92.5 89.3 86.9 88.4 78.6 47.8 55.9 54.6 55.3 54.9 57.6 54.1 54.0 56.2 55.3 46.4 36.8 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015
Slide 27: Breakdown of regular income
Backup: Investments Breakdown of regular income Investment result – Regular income (€m) Q3 2016 9M 2016 9M 2015 Change Afs fixed-interest 764 2,427 2,661 –234 Afs non-fixed-interest 81 443 517 –74 Derivatives 26 88 104 –16 Loans 499 1,515 1,573 –58 Real estate 100 302 268 34 Deposits retained on ass
Slide 28: Breakdown of write-ups/write-downs
Backup: Investments Breakdown of write-ups/write-downs Investment result – Write-ups/write-downs (€m) Q3 2016 9M 2016 9M 2015 Change Afs fixed-interest 13 0 –56 57 Afs non-fixed-interest –41 –296 –418 122 Loans 2 –26 –65 39 Real estate –21 –55 –58 3 Deposits retained on assumed reinsurance and other
Slide 29: Breakdown of net result from disposals
Backup: Investments Breakdown of net result from disposals Investment result – Net result from disposal of investments (€m) Q3 2016 9M 2016 9M 2015 Change Afs fixed-interest 480 1,113 1,208 –94 Afs non-fixed-interest 190 334 790 –456 Loans 26 507 92 414 Real estate 3 14 5 9 Deposits retained on assu
Slide 30: Return on investment by asset class and segment
Backup: Investments Return on investment by asset class and segment 9M 2016 %1 Regular income Write-ups/-downs Disposal result Extraord. derivative result Other inc./exp. RoI ᴓ Market value (€m) Afs fixed-income 2.5 0.0 1.1 0.0 0.0 3.6 131,525 Afs non-fixed-income 4.2 –2.8 3.2 0.0 0.0 4.6 13,967 Der
Slide 31: Investment result by segment
Backup: Investments Investment result by segment Investment result – Reinsurance Life €m Q3 2016 Return1 9M 2016 Return1 9M 2015 Return1 Regular income 167 2.7% 506 2.8% 665 3.4% Write-ups/write-downs –6 –0.1% –17 –0.1% –58 –0.3% Disposal gains/losses 79 1.3% 139 0.8% 212 1.1% Derivatives2 –62 –1.0%
Slide 32: Investment result by segment
Backup: Investments Investment result by segment Investment result – ERGO Life/Health Germany €m Q3 2016 Return1 9M 2016 Return1 9M 2015 Return1 Regular income 859 2.7% 2,724 3.0% 2,923 3.3% Write-ups/write-downs –23 –0.1% –170 –0.2% –172 –0.2% Disposal gains/losses 187 0.6% 844 0.9% 681 0.8% Deriva
Slide 33: Investment result by segment
Backup: Investments Investment result by segment Investment result – ERGO International €m Q3 2016 Return1 9M 2016 Return1 9M 2015 Return1 Regular income 81 2.3% 325 3.2% 382 2.8% Write-ups/write-downs 21 0.6% 0 0.0% –61 –0.4% Disposal gains/losses 42 1.2% 76 0.7% 108 0.8% Derivatives2 –35 –1.0% 13
Slide 34: Sensitivities to interest rates, spreads and equity markets
Backup: Investments Sensitivities to interest rates, spreads and equity markets Sensitivity to risk-free interest rates – Basis points –50 –25 +50 +100 Change in gross market value (€bn) +9.6 +4.7 –8.8 –16.9 Change in on-balance-sheet reserves, net (€bn)1 +2.1 +1.0 –1.9 –3.7 Change in off-balance-sh
Slide 35: On and off-balance-sheet reserves (gross)
Backup: Investments On and off-balance-sheet reserves (gross) €m 31.12.2014 31.12.2015 31.3.2016 30.6.2016 30.9.2016 Market value of investments 235,849 230,529 232,941 237,519 241,824 Total reserves 31,470 25,969 32,025 34,530 36,401 On-balance-sheet reserves Fixed-interest securities 11,967 7,886
Slide 36: On-balance-sheet reserves
Backup: Investments On-balance-sheet reserves On-balance-sheet reserves €m 30.9.2016 Change Q3 Investments afs 16,434 783 Valuation at equity 75 8 Unconsolidated affiliated enterprises 85 11 Cash-flow hedging 22 –1 Total on-balance-sheet reserves (gross) 16,617 801 Provision for deferred premium ref
Slide 37: Off-balance-sheet reserves
Backup: Investments Off-balance-sheet reserves Off-balance-sheet reserves €m 30.9.2016 Change Q3 Real estate1 2,190 15 Loans 16,991 1,065 Associates 603 –9 Total off-balance-sheet reserves (gross) 19,784 1,070 Provision for deferred premium refunds –14,870 –899 Deferred tax –1,503 –60 Minority inter
Slide 38: Development of shares in circulation
Backup: Shareholder information Development of shares in circulation Acquisition of Retirement of Weighted average number of shares in circulation Shares 31.12. own shares in own shares in 30.9. (millions) 2015 9M 2016 9M 2016 2016 (millions) Shares in 162.8 –4.4 – 158.4 172.2 165.9 circulation 162.
Slide 39: Financial calendar
Backup: Shareholder information Financial calendar 2017 7 February Preliminary key figures 2016 and renewals Balance sheet press conference for 2016 financial statements 15 March Analysts' conference in Munich with videocast 26 April Annual General Meeting 2017, ICM – International Congress Centre M
Slide 40: 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 E-mail: tdzuba@munichre.com E-mail
Slide 41: 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