Munchener Ruckversicherungs-gesellschaft Ag · XETR:MUV2
Munchener Ruckversicherungs-gesellschaft — Munich Re — Investor Presentation (January 2009)
33 slides from Munchener Ruckversicherungs-gesellschaft's investor presentation, Jan 15, 2009
Slide 1: 2008 Natural Catastrophe Review
2008 Natural Catastrophe Review Thursday, January 15, 2009 Munich Re Insurance Information Institute Agenda 11:00 Introduction Bob Kinsella, Spokesperson, Munich Re Group 11:05 U.S. Catastrophe Update Carl Hedde, Head of Risk Accumulation, Munich Re America 11:15 Global Catastrophe Update Ernst Rauc
Slide 2: Speakers
Speakers (1) Carl Hedde Head of Risk Accumulation Munich Re America Responsibilities include oversight of corporate accumulation issues at Munich Re America; including the use of catastrophe risk models, client cat risk consulting services, and portfolio management and optimization. Additionally, he
Slide 3: Speakers (3); U.S. Natural Catastrophe Update
Speakers (3) Robert P. Hartwig President Insurance Information Institute Since joining the I.I.I. in 1998 as an economist and becoming chief economist in 2000, Dr. Hartwig has focused his work on improving understanding of key insurance issues across all industry stakeholders including media, consum
Slide 4: MR NatCatSERVICE; Natural Catastrophes in the U.S. 2008
MR NatCatSERVICE One of the world‘s largest databases on natural catastrophes The database today: From 1980 until today all loss events; for the U.S. and selected countries in Europe all loss events since 1970 Retrospectively all great disasters since 1950 In addition, all major historical eve
Slide 5: Natural Catastrophe Losses in the U.S. 2008
Natural Catastrophe Losses in the U.S. 2008 Fatalities Estimated Estimated As of January 2009 Overall Losses Insured Losses Records in red (US $m) (US $m) Tropical Cyclones 148 38,000 19,350 Severe 125 14,580 10,590 Thunderstorms Winter Storms 27 1,600 1,020† Wildfires 0 2,000 630 Floods 42 11,000 5
Slide 6: Losses from U.S. Significant Natural Catastrophes
Losses from U.S. Significant Natural Catastrophes 1950 - 2008 $1 billion economic loss and/or 50 fatalities Overall losses from U.S. significant catastrophes totaled $56.5 billion; insured losses $25.1 billion © 2009 Munich Re Group Sources: MR NatCatSERVICE 11 Insured Losses due to Weather Perils i
Slide 7: U.S. Significant Natural Catastrophes in 2008
U.S. Significant Natural Catastrophes in 2008 $1 billion economic loss and/or 50 fatalities Date Event Est. Economic Estimated Insured Losses (US $m) Losses (US $m) January 4 - 9 Winter Storm 1,000 745† February 5 - 6 Thunderstorms 1,300 955† April 9 – 11 Thunderstorms 1,100 800† May 22 – 26 Thunder
Slide 8: Number of U.S. Landfalling Tropical Cyclones
Number of U.S. Landfalling Tropical Cyclones 1900 - 2008 Six tropical cyclones made landfall in the U.S. in 2008, three at hurricane intensity. © 2009 Munich Re Group Source: NOAA 15 Insured U.S. Tropical Cyclone Losses 1980 - 2008 The current 5-year average (2004-2008) insured tropical cyclone loss
Slide 9: U.S. Tropical Cyclone Landfalls in 2008; Hurricane Ike 2008
U.S. Tropical Cyclone Landfalls in 2008 Hanna Edouard Dolly Fay Ike Gustav © 2009 Munich Re Group Source: NOAA 17 Hurricane Ike 2008 U.S. insured losses currently estimated at $15 billion In terms of insured losses, 3rd most costly hurricane (in original values) after Katrina’05 and Andrew ’92
Slide 10: Hurricane Ike 2008: Unique Aspects and Lessons Learned
Hurricane Ike 2008: Unique Aspects Extremely large wind field Diameter of hurricane and tropical force winds were 240 miles and 550 miles, respectively. The corresponding values for Katrina‘05 were 175 and 440 miles Extreme storm surge Due to its large size and slow movement Ike produced a storm
Slide 11: Bolivar Peninsula after Hurricane Ike
Bolivar Peninsula after Hurricane Ike © 2009 Munich Re Group Photo: Munich Re America 21 21 Institute for Business and Home Safety Fortified Homes Bolivar Peninsula, Texas, after Hurricane Ike © 2009 Munich Re Group Photo: Munich Re America 22 22
Slide 12: Other U.S. Natural Catastrophes in 2008
Other U.S. Natural Catastrophes in 2008 Source: FEMA 23 Insured U.S. Thunderstorm Losses 1980 – 2008 Thunderstorm losses in 2008 broke the previous record by over $1.5 bn First Half 2008: $9.9 bn © 2009 Munich Re Group Source: Property Claims Service, MR NatCatSERVICE 24
Slide 13: U.S. Tornado Count; Winter Storm Losses
U.S. Tornado Count 2008 compared to 2003 - 2007 Source: NOAA, SPC 25 Insured U.S. Winter Storm Losses 1980 - 2008 2008 Total: $1,020 million Winter storm losses in 2008 were the lowest in 5 years, and $350 million below average. © 2009 Munich Re Group Source: Property Claims Service, MR NatCatSERVIC
Slide 14: California Wildfire Losses; Midwest Floods of June 2008
Insured California Wildfire Losses 1980 - 2008 California has averaged 2008 Total: $480 million in Wildfire $630 million losses per year since 1990. © 2009 Munich Re Group Source: Property Claims Service, MR NatCatSERVICE 27 The Midwest Floods of June 2008 24 fatalities - 150 people injured 40,0
Slide 15: U.S. Flood Losses; Global Catastrophe Update
U.S. Flood Losses 1980 – 2008 Overall losses (2008 values) Insured losses (2008 values) Loss ($ billion, 2008 Dollars) The Floods of 2008 caused the second highest economic loss in the U.S. since 1980. Year © 2009 Munich Re Group Source: Geo Risk Research, NatCatSERVICE 29 Global Catastrophe Update
Slide 16: Natural Catastrophes in the World 2008
Natural Catastrophes in the World 2008 Headlines Driven by high losses from weather related natural catastrophes and the earthquake of Sichuan/China, 2008 was the third most expensive year on record (economic and insured losses) Throughout the world, more than 220,000 people died or are still mi
Slide 17: Deadliest / Costliest Natural Catastrophes 2008
Deadliest / Costliest Natural Catastrophes 2008 2009 Münchener Rückversicherungs-Gesellschaft, Geo Risk Research, NatCatSERVICE As of January 2009 33 Natural Catastrophes Worldwide 1980 - 2008 Number of events Over the years 1980 - 2008, the number of geophysical events are more or less constant, wh
Slide 18: Natural Catastrophes Worldwide 1980 - 2008
Natural Catastrophes Worldwide 1980 - 2008 Overall and insured losses 2008 was the 3rd most expensive year worldwide for natural catastrophes, both for insured and overall losses. US $bn Overall losses (2008 values) Insured losses (2008 values) 2009 Münchener Rückversicherungs-Gesellschaft, Geo Risk
Slide 19: 2008 Natural Catastrophe Review Conclusions
2008 Natural Catastrophe Review Conclusions 2008 was – on the basis of figures adjusted for inflation – the third most expensive natural catastrophe year on record for the insurance industry. This continues the long-term trend we have been observing. Climate change has already started and is ver
Slide 20: Financing Catastrophic Losses in the Midst of Financial Catastrophe
2008 Catastrophe Review Financing Catastrophic Losses in the Midst of Financial Catastrophe Natural Catastrophe Webinar January 15, 2009 Robert P. Hartwig, Ph.D., CPCU, President Insurance Information Institute ♦ 110 William Street ♦ New York, NY 10038 Tel: (212) 346-5520 ♦ Fax: (212) 732-1916 ♦ bob
Slide 21: U.S. Insured Catastrophe Losses
U.S. Insured Catastrophe Losses* $ Billions $100 Billion 2008 CAT exceeded 2006/07 CAT year is combined. 2005 was by far the coming worst year ever for insured someday catastrophe losses in the US *Excludes $4B-$6b offshore energy losses from Hurricanes Katrina & Rita. **Based on PCS data through Se
Slide 22: Top 10 Most Costly Hurricanes in US History
Top 10 Most Costly Hurricanes in US History, (Insured Losses, $2007) 8 of the 10 most expensive hurricanes in US history have occurred since 2004 In 2008, Ike 4th most expensive hurricane in US history *PCS estimate as of 12/15/08 (in 2008 dollars). Sources: ISO/PCS; Insurance Information Institute
Slide 23: Underwriting Gain (Loss); P/C Insurance Industry ROEs
Underwriting Gain (Loss) 1975-2008:Q3* $ Billions $19.877 Bill underwriting loss in 08:9M incl. mort. & FG insurers Source: A.M. Best, ISO; Insurance Information Institute * Includes mortgage & finl. guarantee insurers P/C Insurance Industry ROEs, 1975 – 2008E* 1977:19.0% 1987:17.3% 2006:12.2% 1997:
Slide 24: Meeting the Challenge, Keeping the Promise
P/C Insurer Net Realized Capital Gains, 1990-2008:Q3 $ Billions Realized capital gains exceeded $9 billion in 2004/5 but fell sharply in 2006 despite a strong stock market. Nearly $9 billion again in 2007, but $-9.7 billion in 2008 through Q3. Sources: A.M. Best, ISO, Insurance Information Institute
Slide 25: How Insurance Industry Stability Benefits Consumers
How Insurance Industry Stability, Resilience Benefits Consumers BOTTOM LINE: • Insurance Markets—Unlike Banking—Are Operating Normally. This includes global reinsurance markets. • The Basic Function of Insurance—the Orderly Transfer of Risk from Client to Insurer—C ontinues Uninterrupted • This Mean
Slide 26: Capital & Capacity
CAPITAL & CAPACITY The Insurance Industry is Financially Strong Policyholder Surplus, 2006:Q4 – 2008:Q3 Capacity peaked at $521.8 as of 9/30/07 Declines Since 2007:Q3 Peak Q2: -$16.6B (-3.2%) Q3: -$43.3B (-8.3%) Source: ISO
Slide 27: Financial Strength & Ratings
U.S. Policyholder Surplus: 1975-2008* Actual capacity as of 9/30/08 was $478.5, down 7.6% from 12/31/07 at $517.9B, but 68% above its 2002 trough. Recent peak was $521.8 as of 9/30/07. Estimate as of 12/31/08 is $438B is 16% below 2007 peak. The premium-to-surplus $ Billions ratio stood at $0.94:$1
Slide 28: P/C Insurer Impairments
P/C Insurer Impairments, 1969-2007 The number of impairments varies significantly over the p/c insurance cycle, with peaks occurring well into hard markets Source: A.M. Best; Insurance Information Institute P/C Insurer Impairment Frequency vs. Combined Ratio, 1969-2007 Impairment rates are highly co
Slide 29: 2009 Hurricane Season
Financial Institutions Globally Facing Huge Losses from the Credit Crunch* Billions The IMF estimates total “credit- turmoil-related” losses will eventually amount to $1.4 trillion $205B or 20.8% of estimated total (bank+insurer) losses will be sustained by insurers worldwide *Global losses since th
Slide 30: Outlook for 2009 Hurricane Season
Outlook for 2009 Hurricane Season: 35% Worse Than Average Average* 2005 2009F Named Storms 9.6 28 14 Named Storm Days 49.1 115.5 70 Hurricanes 5.9 14 7 Hurricane Days 24.5 47.5 30 Intense Hurricanes 2.3 7 3 Intense Hurricane Days 5 7 7 Accumulated Cyclone Energy 96.1 NA 125 Net Tropical Cyclone Acti
Slide 31: Total Value of Insured Coastal Exposure
Total Value of Insured Coastal Exposure (2004, $ Billions) Northeast states have significant exposure. In 2004 Florida had more insured coastal exposure—at nearly $2 trillion than any other state. Future “Mega-Losses” are UNAVOIDABLE. Source: AIR Worldwide Total Value of Insured Coastal Exposure (20
Slide 32: Summary
Summary • Property/Casualty (Re)Insurance Industry Remains Well Capitalized Despite Financial Crisis, Recession & Higher Catastrophe Losses • Industry is Highly Resilient • Designed to withstand major catastrophes and market crashes simultaneously • The Industry Operates Under a Continuous “Doomsday
Slide 33: Questions & Answers
Questions & Answers To ask a question, please dial 14 on your phone. Thank you for your time and interest! Please direct any additional questions to: Bob Kinsella Phone: 609-419-8527 E-Mail: rkinsella@munichreamerica.com or Terese Rosenthal Phone: 609-243-4339 E-mail: trosenthal@munichreamerica.com