42 slides from Munchener Ruckversicherungs-gesellschaft's earnings presentation, May 10, 2016
Slide 1: Quarterly statement as at 31 March 2016
Source: Shutterstock [M] Quarterly statement as at 31 March 2016 10 May 2016 Jörg Schneider
Slide 2: Agenda
Agenda 1 Munich Re (Group) 2 2 ERGO 7 3 Munich Health 13 4 Reinsurance 15 5 Outlook 22 6 Backup 24 Quarterly statement as at 31 March 2016 2
Slide 3: Munich Re (Group) – Financial highlights Q1 2016
Munich Re (Group) – Financial highlights Q1 2016 Q1 result below expectations Munich Re (Group) Q1 2016 Net result Technical result €m Investment result €m Net result €m €436m 912 945 1,820 Benign major losses not compensating 1,572 790 for lower investment return and negative one-off effects at ERG
Slide 4: Munich Re (Group) – Capitalisation
Munich Re (Group) – Capitalisation IFRS capital position Equity €m Capitalisation €bn Equity 31.12.2015 30,966 Consolidated result 436 0.4 0.4 0.3 0.3 Changes 0.3 4.4 4.3 4.4 Dividend 0 5.5 4.4 Unrealised gains/losses 1,395 Exchange rates –660 Share buy-backs –235 17.5% Other –111 15.3% Equity 31.3.
Slide 5: Munich Re (Group) – Investment portfolio
Munich Re (Group) – Investment portfolio Investment portfolio Investment portfolio1 % Portfolio management in Q1 Land and buildings Fixed-interest securities Government bond exposure: Shift from 2.8 (2.9) 56.3 (55.7) France and Spain to emerging markets, Shares, equity funds and USA and supranatio
Slide 6: Munich Re (Group) – Investment result
Munich Re (Group) – Investment result Investment result Investment result €m Q1 2016 Return1 Q1 2015 Return1 Regular income 1,628 2.8% 1,801 3.0% Write-ups/write-downs –219 –0.4% –152 –0.2% Disposal gains/losses 218 0.4% 998 1.6% Derivatives2 74 0.1% –706 –1.2% Other income/expenses –128 –0.2% –121
Slide 7: ERGO
ERGO
Slide 8: ERGO Life and Health Germany – Key financials
ERGO – Key financials ERGO Life and Health Germany Q1 2016 vs. Q1 2015 Gross premiums written €m Net result €m Q1 2015 2,412 Q1 2015 52 Foreign exchange – Technical result –5 Divestments/investments – Non-technical result1 66 Organic change –79 Other –99 Q1 2016 2,333 Q1 2016 14 Life: –€56m Techni
Slide 9: ERGO Property-casualty Germany (1)
ERGO – Key financials ERGO Property-casualty Germany (1) Q1 2016 vs. Q1 2015 Gross premiums written €m Net result €m Q1 2015 1,193 Q1 2015 38 Foreign exchange – Technical result –14 Divestments/investments – Non-technical result1 –84 Organic change 26 Other 35 Q1 2016 1,219 Q1 2016 –25 Organic gro
Slide 10: ERGO Property-casualty Germany (2)
ERGO Property-casualty Germany ERGO Property-casualty Germany (2) Combined ratio % Gross premiums written €m Loss ratio Expense ratio Other 123 340 Motor 2014 95.3 63.1 32.3 Legal protection 117 TOTAL 2015 97.9 64.7 33.2 Personal accident 167 €1,219m 62.8 35.8 Fire/property 225 248 Liability Q1 2016
Slide 11: ERGO International (1)
ERGO – Key financials ERGO International (1) Q1 2016 vs. Q1 2015 Gross premiums written €m Net result €m Q1 2015 980 Q1 2015 12 Foreign exchange –29 Technical result –15 Divestments/investments – Non-technical result1 26 Organic change –8 Other –37 Q1 2016 943 Q1 2016 –14 Life: –€65m Technical resul
Slide 12: ERGO International (2)
ERGO International ERGO International (2) Combined ratio % Gross premiums written €m Loss ratio Expense ratio Other 92 225 Poland 2014 97.3 58.5 38.8 TOTAL Greece 46 €615m 2015 104.7 65.3 39.4 Q1 2016 93.2 55.6 37.6 Turkey 62 190 Legal protection Combined ratio Q1 2016 % 115.3 98.1 102.3 104.1 90.0
Slide 13: Munich Health
Munich Health
Slide 14: Munich Health – Key financials
Munich Health – Key financials Munich Health Q1 2016 vs. Q1 2015 Gross premiums written €m Net result €m Q1 2015 1,443 Q1 2015 21 Foreign exchange –52 Technical result 3 Divestments/investments – Non-technical result1 –4 Organic change –108 Other –4 Q1 2016 1,283 Q1 2016 16 Negative FX effects mai
Slide 15: Reinsurance
Reinsurance Quarterly statement as at 31 March 2016 15
Slide 16: Reinsurance Life – Key financials
Reinsurance Life – Key financials Reinsurance Life Q1 2016 vs. Q1 2015 Gross premiums written €m Net result €m Q1 2015 2,412 Q1 2015 70 Foreign exchange –109 Technical result –33 Divestments/investments – Non-technical result1 –52 Organic change –98 Other 35 Q1 2016 2,205 Q1 2016 20 Negative FX ef
Slide 17: Reinsurance Property-casualty – Key financials
Reinsurance Property-casualty – Key financials Reinsurance Property-casualty Q1 2016 vs. Q1 2015 Gross premiums written €m Net result €m Q1 2015 4,598 Q1 2015 598 Foreign exchange –69 Technical result 97 Divestments/investments – Non-technical result1 –255 Organic change –1 Other –14 Q1 2016 4,528 Q
Slide 18: Reinsurance Property-casualty – Combined ratio
Reinsurance Property-casualty – Combined ratio Combined ratio Combined ratio % Basic losses Major losses Expense ratio 101.4 2014 92.7 53.0 7.2 32.5 2015 89.7 50.8 6.2 32.6 94.5 Q1 2016 88.4 54.0 2.4 32.0 93.3 88.4 91.3 91.2 92.3 Major Reserve Normalised losses Nat cat Man-made releases1 combined ra
Slide 19: April renewals – Regional focus on USA and Japan, high nat cat share
Reinsurance Property-casualty – April renewals 2016 April renewals – Regional focus on USA and Japan, high nat cat share Total property-casualty book1 % Regional allocation of April renewal % Remaining business Business up for January renewal Rest2 Worldwide 28 52 7 29 Europe TOTAL Japan 11 €1.2bn 1
Slide 20: April renewals confirm slowing of price declines
Reinsurance Property-casualty – April renewals 2016 April renewals confirm slowing of price declines, while attractive business opportunities lead to top-line increase April renewals 2016 % 100 –20.5 79.5 6.4 72.6 158.5 April renewals dominated by single clients rather than by larger portfolios €m
Slide 21: Outlook July renewals – Regional focus on North and Latin America
Reinsurance Property-casualty – Outlook July renewals Outlook July renewals – Regional focus on North and Latin America, main renewal date in Australia Regional allocation of July renewals % Outlook for July renewal North America Worldwide Capacity and competition expected to remain 37 26 high unl
Slide 22: Outlook
Outlook Quarterly statement as at 31 March 2016 22
Slide 23: Outlook 2016
Outlook 2016 Munich Re (Group) Net result Return on investment €2.3bn (prev. €2.3–2.8bn) ~3% Revision of outlook mainly due to inclusion of ERGO strategy Solid return given ongoing programme – Positive ERGO result now unlikely low-interest-rate environment Gross premiums written Reinsurance – Combin
Slide 24: Backup
Backup
Slide 25: Premium development
Backup: Munich Re (Group) Premium development Gross premiums written €m Segmental breakdown €m Reinsurance ERGO Q1 2015 13,038 Property-casualty Life and Health Germany 4,528 (36%) (p –1.5%) 2,333 (19%) (p –3.3%) Foreign exchange –259 ERGO Property-casualty Germany 1,219 (10%) (p 2.2%) Divestments/
Slide 26: 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 Q1 2016 Operating result 726 Other non-operating result –82 Goodwill impairments 0 Net finance costs –51 Taxes –157 Net result 436 Other non-operating result €m Tax rate
Slide 27: Development of combined ratio
Backup: Reinsurance Property-casualty – Combined ratio Development of combined ratio Combined ratio vs. basic losses % Combined ratio Basic loss ratio 99.3 94.3 101.4 91.3 91.2 92.3 93.3 94.5 89.3 86.9 88.4 78.6 53.9 49.3 47.8 55.9 54.6 55.3 54.9 57.6 54.1 54.0 46.4 36.8 Q2 2013 Q3 2013 Q4 2013 Q1 2
Slide 28: Breakdown of regular income
Backup: Investments Breakdown of regular income Investment result – Regular income (€m) Q1 2016 Q1 2015 Change Afs fixed-interest 828 907 –79 Afs non-fixed-interest 107 98 9 Derivatives 31 35 –4 Loans 512 526 –15 Real estate 98 88 10 Deposits retained on assumed reinsurance and other investments 51
Slide 29: Breakdown of write-ups/write-downs
Backup: Investments Breakdown of write-ups/write-downs Investment result – Write-ups/write-downs (€m) Q1 2016 Q1 2015 Change Afs fixed-interest –48 –32 –15 Afs non-fixed-interest –150 –31 –119 Loans –40 –65 25 Real estate –21 –19 –2 Deposits retained on assumed reinsurance and other investments 38 –
Slide 30: Breakdown of net result from disposals
Backup: Investments Breakdown of net result from disposals Investment result – Net result from disposal of investments (€m) Q1 2016 Q1 2015 Change Afs fixed-interest 48 610 –562 Afs non-fixed-interest –3 369 –372 Loans 172 10 162 Real estate 10 5 4 Deposits retained on assumed reinsurance and other
Slide 31: Return on investment by asset class and segment
Backup: Investments Return on investment by asset class and segment %1 Regular income Write-ups/-downs Disposal result Extraord. derivative result Other inc./exp. RoI ᴓ Market value (€m) Afs fixed-income 2.6 –0.1 0.1 0.0 0.0 2.6 128,920 Afs non-fixed-income 3.0 –4.2 –0.1 0.0 0.0 –1.3 14,143 Derivati
Slide 32: Investment result by segment
Backup: Investments Investment result by segment Investment result – Reinsurance Life €m Q1 2016 Return1 Q1 2015 Return1 Regular income 163 2.7% 223 3.4% Write-ups/write-downs –14 –0.2% –8 –0.1% Disposal gains/losses –29 –0.5% 98 1.5% Derivatives2 –43 –0.7% –98 –1.5% Other income/expenses –12 –0.2%
Slide 33: Investment result by segment
Backup: Investments Investment result by segment Investment result – ERGO Life and Health Germany €m Q1 2016 Return1 Q1 2015 Return1 Regular income 890 3.0% 922 3.0% Write-ups/write-downs –96 –0.3% –59 –0.2% Disposal gains/losses 226 0.8% 361 1.2% Derivatives2, 3 302 1.0% –105 –0.3% Other income/exp
Slide 34: Investment result by segment
Backup: Investments Investment result by segment Investment result – ERGO International €m Q1 2016 Return1 Q1 2015 Return1 Regular income 122 3.7% 117 2.5% Write-ups/write-downs –18 –0.5% –24 –0.5% Disposal gains/losses –2 –0.1% 31 0.7% Derivatives2, 3 31 1.0% –32 –0.7% Other income/expenses –6 –0.2
Slide 35: 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) +9.1 +4.5 –8.5 –16.4 Change in on-balance-sheet reserves, net (€bn)1 +2.0 +1.0 –1.9 –3.6 Change in off-balance-sh
Slide 36: On- and off-balance-sheet reserves (gross)
Backup: Investments On- and off-balance-sheet reserves (gross) €m 31.12. 31.12. 31.12. 31.3. 2013 2014 2015 2016 Market value of investments 210,431 235,849 230,529 232,941 Total reserves 15,192 31,470 25,969 32,025 On-balance-sheet reserves Fixed-interest securities 4,661 11,967 7,886 11,494 Non-fi
Slide 37: On-balance-sheet reserves
Backup: Investments On-balance-sheet reserves On-balance-sheet reserves €m 31.3.2016 Change Q1 Investments afs 13,733 3,400 Valuation at equity 74 –16 Unconsolidated affiliated enterprises 76 –6 Cash flow hedging 29 0 Total on-balance-sheet reserves (gross) 13,911 3,378 Provision for deferred premiu
Slide 38: Off-balance-sheet reserves
Backup: Investments Off-balance-sheet reserves Off-balance-sheet reserves €m 31.3.2016 Change Q1 Real estate1 2,184 –89 Loans 15,350 2,741 Associates 579 26 Total off-balance-sheet reserves (gross) 18,114 2,678 Provision for deferred premium refunds –13,508 –2,387 Deferred tax –1,406 –92 Minority in
Slide 39: 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 own shares in 31.3. (millions) (millions) 2015 in Q1 2016 Q1 2016 2016 Shares in 162.8 –1.3 – 161.4 179.1 172.2 circulation 165.
Slide 40: Financial calendar
Backup: Shareholder information Financial calendar 2016 9 August Half-year financial report as at 30 June 2016 9 November Quarterly statement as at 30 September 20161 2017 7 February Preliminary key figures 2016 and renewals Balance sheet press conference for 2016 financial statements 15 March Analy
Slide 41: 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 42: 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