Munchener Ruckversicherungs-gesellschaft Ag · XETR:MUV2

Munchener Ruckversicherungs-gesellschaft — Munich Re — Investor Day (November 2017)

140 slides from Munchener Ruckversicherungs-gesellschaft's investor day presentation, Nov 21, 2017

1. Slide 1: Munich Re driving digital transformation

   INVESTOR DAY Munich Re driving digital transformation Munich, 21 November 2017

2. Slide 2: Agenda

   Agenda A Framework and infrastructure B Business transformation C Business extension Munich Re (Group) Cyber insurance Internet of Things Joachim Wenning Daljitt Barn Greg Barats CEO – Munich Re (Group) Global Head of Cyber President and CEO – HSB ERGO Digital Ventures Canadian multi-channel Digital

3. Slide 3: Munich Re (Group)

   Munich Re (Group) Joachim Wenning Investor Day 2017 3

4. Slide 4: Digital business models have been penetrating all industries for almost 20 years

   Framework and infrastructure – Munich Re (Group) Digital business models have been penetrating all industries since almost 20 years Product launch 1998 2008 2009 2010 RETAIL MUSIC COMMUNICATIONS TRANSPORTATION Insurance industry in the midst of digital transformation Images: used under license from

5. Slide 5: Future winners will leverage digital ingredients

   Framework and infrastructure – Munich Re (Group) Insurance industry perspective – Future winners will leverage “digital ingredients” Traditional insurance Additional value-creation lever: Opening the gates to value drivers will remain Data analytics and technology new businesses Image: used under li

6. Slide 6: Digital ingredients are embedded in our business strategy

   Framework and infrastructure – Munich Re (Group) To remain a winner in the future, “digital ingredients” are embedded in our business strategy STRATEGIC FOCUS Improve and grow the Group portfolio Invest and divest according to Digital transformation Business first strategic fit and performance Build

7. Slide 7: Three steps to achieve results from innovation and digitalisation

   Framework and infrastructure – Munich Re (Group) To achieve concrete results from innovation and digitalisation, we systematically follow three steps OUR AMBITION Focus and execute Fully exploit value-  Develop Munich Re creation potential Explore and learn portfolio through from “digital ingredien

8. Slide 8: Global foundation for innovation across the Group

   Framework and infrastructure – Munich Re (Group) 1 We have invested in building a global foundation for innovation across the Group Invest in global innovation footprint Invest in Invest in people projects Global network of >€160m invested >300 FTE dedicated to beyond FTE assignment innovation activ

9. Slide 9: From idea generation to implementation

   Framework and infrastructure – Munich Re (Group) 2 We turn ideas into business potential based on a managed process from idea generation to implementation Encourage idea generation >420 innovation ideas assessed, based on >1,000 proposals Execution or early exit ~200 Testing and ideas discarded lear

10. Slide 10: Selected projects to be discussed today

    Framework and infrastructure – Munich Re (Group) 3 We take an active role to continuously transform and extend our business – Selected projects to be discussed today Business transformation Business extension Pure digital player Develop & strengthen traditional core (nexible) Explore & discover  En

11. Slide 11: Innovation synergies from interlocked business models

    Framework and infrastructure – Munich Re (Group) 3 We realise innovation synergies from our set-up as RI and PI through our project on Interlocked Business Models Key areas for innovation synergies  Joint innovation activities and building of business models, Expertise e.g. IoT, digital platforms,

12. Slide 12: ERGO Digital Ventures

    ERGO Digital Ventures Mark Klein Investor Day 2017 12

13. Slide 13: We live in a time of technological change

    Framework and infrastructure – ERGO Digital Ventures We live in a time of technological change Devices and sensors Data Computing power Artificial intelligence It took Google 30 billion 90% of data 1,202 CPUs A new world connected devices was gathered and 176 GPUs to beat the chatbots, robots, by 20

14. Slide 14: Our origin and mission

    Framework and infrastructure – ERGO Digital Ventures Our origin and mission: Turn ERGO into the leading provider for digital solutions ERGO 8 Fundamental optimisation of product portfolio Strategy 9 Integrated offerings for hybrid customers Programme 10 Solutions for pure online customers fit digita

15. Slide 15: Framework for digitalisation at ERGO

    Framework and infrastructure – ERGO Digital Ventures Framework for digitalisation at ERGO Enabling technology and digital innovation Improving Disrupting Establishing existing existing new business business business models models models Starting with Starting with Starting with automotive pure digit

16. Slide 16: The online market for insurances is growing strongly

    Framework and infrastructure – ERGO Digital Ventures – Hybrid customer The online market for insurances is growing strongly Insurances – Online share Information Sales ~75% Significant potential in online/offline link 50% 30% ~25% 19% Further growth potential 14% 9% in online sales 2% 2005 2010 2015

17. Slide 17: Adapting sales, retention and service to the modern customer

    Framework and infrastructure – ERGO Digital Ventures – Hybrid customer We aim at the modern customer and adapt in sales, retention and service 360-degree customer view The new agency  We aim to further harmonise products  50% of ERGO.de’s web traffic induced (car, home, liability) and operations t

18. Slide 18: New digital factory for best-in-class user experience

    Framework and infrastructure – ERGO Digital Ventures – ERGO Digital IT We empower ERGO to deliver best-in-class user experience by means of our new digital factory as part of ERGO’s global IT BERLIN WARSAW Source: Shutterstock ~50 experts Source: Shutterstock ~250 experts ~€140m (gross) ERGO Mobilit

19. Slide 19: Hype-cycle logic for innovation topics

    Framework and infrastructure – ERGO Digital Ventures – Innovation management We focus and account for different maturities of innovation topics by using a hype-cycle logic Observe Explore Deploy Expectations Connected cars Genomics International 3D printing 3D scanning knowledge Drones Sharing econo

20. Slide 20: Connected Home – ERGO Safe Home

    Framework and infrastructure – ERGO Digital Ventures – Innovation management Connected Home – ERGO Safe Home minimises and prevents damage for smart-home customers Overview: ERGO Safe Home Deutsche Telekom cooperation Smart-home hub  Product bundle of insurance, technology and service Sensor-based

21. Slide 21: Units and programmes driving digitalisation from the edge

    Framework and infrastructure – ERGO Digital Ventures We have established units and programmes to drive digitalisation from the edge Hybrid customer HDFC ERGO “core” nexible Digital health EMS https://commons.wikimedia.org/wiki/File:NASA-HS201427a-HubbleUltraDeepField2014-20140603.jpg Investor Day 20

22. Slide 22: Reinsurance

    Reinsurance Marcus Winter Investor Day 2017 22

23. Slide 23: Innovation activities capitalise on major external trends

    Reinsurance Our innovation activities capitalise on major external trends TECHNOLOGICAL SHIFTS – “INDUSTRY 4.0” NEW TYPES OF RISKS Sensors Cyber Digitalisation 1 3 and automation “Hyperloop” Image: used under license from Image: used under license from shutterstock.com/Robert Lucian Crusitu shutters

24. Slide 24: Industry 4.0 provides opportunity

    Reinsurance 1 “Industry 4.0” provides us with the opportunity to access a huge market with new business models  “Industry 4.0” provides access to significant new revenue streams and a new customer base  Change of value proposition  Claims prevention vs. claims coverage  Assurance of outcome vs.

25. Slide 25: Digital Ecosystem value proposition

    Reinsurance 2 Digital Ecosystem – We provide an attractive value proposition for players rethinking insurance delivery Digital Partners Canadian Multi-channel Distribution Global multiline Product design capacity and data AGILE DELIVERY Venture capital Technology  Providing digital backend systems

26. Slide 26: Tradition in insuring new types of risks

    Reinsurance 3 We have a longstanding tradition in insuring new types of risks Image: used under license from shutterstock.com Pushing the boundaries of technology: Extend value proposition into services: Leverage data analytics: “Hyperloop” Cyber Pandemics cover Investor Day 2017 26

27. Slide 27: Investment into data analytics

    Reinsurance 4 Strong investment into data analytics allows us to extract value from internal and (new) external data sources TECHNOLOGY State-of-the-art data analytics infrastructure “Munich Re Data Lake” in place – no legacy systems PEOPLE Investment into decentral data analytics capabilities, >150

28. Slide 28: Our transformation: Agile, flexible, modular

    Reinsurance Our transformation: Agile, flexible, modular Network of partnerships supplementing traditional linear value chain Digital solutions Innovation activities designed drive cultural change for a modular towards a flexible and environment agile mindset Images: used under license from shutters

29. Slide 29: We drive innovation in the industry

    Reinsurance We drive innovation in the industry Unique positioning Unique mix of value propositions for our partners  Global presence  Domain expertise in underwriting, claims and risk  Financial strength management  Full range of monetisation options  Efficient access to new solutions  No IT

30. Slide 30: Strategic investments in selected partnerships

    Reinsurance Strategic investments in selected partnerships to leverage joint value creation potential InsurTech IoT  >€60m invested into >10 assets focusing on InsurTech and IoT ecosystem  Strategic intent is joint value creation and establishment of long-term partnerships  We provide value – not

31. Slide 31: From incremental innovation to leading-edge technology

    Reinsurance From incremental innovation to leading-edge technology – Tangible success cases IoT M.I.N.D. Cyber Augmented solutions underwriting Drone Data AI coverages Analytics Suite Canadian Data lake Insurance gap and Epidemic trends multi-channel solutions 1 0 financially motivated distribution

32. Slide 32: Data and analytics

    Data and analytics Wolfgang Hauner Investor Day 2017 32

33. Slide 33: Data and analytics – Why, why now, and how?

    Data and analytics Data and analytics – Why, why now, and how? Sales New developments We enable our employees help to use full power General Insurance- Underwriting and customers to use of technologies AI specific AI enriched data, advanced tools and state-of-the-art Claims analytics Neural networks

34. Slide 34: Data and analytics supports core strategic areas

    Data and analytics Data and analytics supports Munich Re’s core strategic areas, serving as business enabler for the whole Group Mission: Generate business value through data analytics for internal  Tariff optimisation  Churn and external clients  Customer satisfaction  Cross selling  Automated

35. Slide 35: Data and analytics along the value chain

    Data and analytics Data and analytics serves purposes along the (re)insurance value chain Insurance value chain Image: used under license from shutterstock.com Image: used under license from shutterstock.com Image: used under license from Getty Images / Benjamin Torode DISTRIBUTION UNDERWRITING CLAI

36. Slide 36: How it works in the reinsurance group

    Data and analytics in reinsurance How it works in the reinsurance group 1 2 3 4 Collect data Store, cluster and Analyse data Add value structure data Client/ portfolio data Data lake Munich Re data External data sources Machine learning, Solution AI, statistics  Improve efficiency  Improve portfol

37. Slide 37: Collect data: combine data with domain expertise

    Data and analytics in reinsurance 1 Collect data: Combination of data with domain-specific expertise is key! The Device Industrialisation 4.0 Mesh New Payment Models Up-/cross- 3D Printing Materials Ambient User Experience Haptic Technologies Augmented and Virtual Worlds selling Cloud/Client Archite

38. Slide 38: Munich Re Data Lake – The open enterprise approach

    Data and analytics in reinsurance 2 Munich Re Data Lake – The open enterprise approach for the reinsurance group globally Data innovation Time to digital market Service diversity USER Int2 INTERFACE Int1 Internal/ LOGIC external data Ext1 SPEED UP and algorithms AND SHORTEN DATA SHARED PROCESSES KNO

39. Slide 39: Munich Re Data Lake – Leading-edge infrastructure

    Data and analytics in reinsurance 2 Munich Re Data Lake – Leading-edge infrastructure Intelligent shortcut using best-in-class solutions to build a superior overall system Cost-efficient Analytics implementation Hadoop and data lake tools SAS Mobile BI tools HANA Browser SAS Visual Analytics Termina

40. Slide 40: Turning data into value

    Data and analytics in reinsurance 3 Turning data into value Platform open to every Often initial focus on data extraction Munich Re employee to be solved to enhance available data  Dynamically visualise data of Explorative Multivariate effect  Figure out how certain factors any size analysis analy

41. Slide 41: Risk assessment to improve efficiency

    Data and analytics in reinsurance 4 Example: Risk assessment to improve efficiency – Digitally augmented underwriting: Tariffs using artificial intelligence Tariffs are key – But hard, slow, and costly  Experts using portfolio-specific data Primary insurance  GLMs1 as state-of-the-art risk models

42. Slide 42: Risk assessment to generate more business

    Data and analytics in reinsurance 4 Example: Risk assessment to generate more business – Identify cross-selling potential for a client Identify pools with high cross-selling potential Improve sales efficiency and profitability $$  Improve transparency on existing customers, e.g.:  Clusters with hi

43. Slide 43: Cyber insurance

    Cyber insurance Daljitt Barn Investor Day 2017 43

44. Slide 44: Our approach

    Cyber insurance Our approach History Ambition Growth Resonance We have been Munich Re would Organic through Our heritage of writing cyber for like 10% market quota-share, plus managing complex over 10 years share by the end white-label and risk whilst being of 2020 primary markets innovative in the

45. Slide 45: Global trends

    Cyber insurance Global trends Cyber penetration in the US: ~20% Cyber penetration in rest of world: <5%  Strong growth in certain industries:  Lloyds have circa 60 syndicates writing cyber Manufacturing, transportation, life sciences,  Strong growth predicted in EU for SME and power and utilities

46. Slide 46: Cyber incident – WannaCry

    Cyber insurance Cyber incident – WannaCry Executive summary  Example of a ransomware worm that encrypts files on the compromised computer and demands a ransom payment for decryption (~US$ 300–600 paid in bitcoins)  Attack has hit over 200,000 systems in 150 countries since 12 May 2017  All Window

47. Slide 47: Cyber insurance landscape

    Cyber insurance Cyber insurance landscape – What do we think? Current market size Global distribution of cyber Munich Re GWP in 2016 ~US$ 3.6bn 85% US$ 263m At the end US market by 38% growth of 2016 end 2016 (versus 26% market) Size of the opportunity EU growth Munich Re low loss ratios US$ 8–10bn

48. Slide 48: Cyber as a peril

    Cyber insurance Cyber risk in the insurance industry – Cyber as a peril Rapidly evolving Inhomogeneous Cyber crime is Risk Cyber past does landscape big business quantification? not predict cyber future Image: used under license from shutterstock.com Image: used under license from shutterstock.com I

49. Slide 49: Cyber as a control

    Cyber insurance Implementing cyber security – Cyber as a control Budget and Risk mitigation Security controls How much What is the RoI? teams often focused must work at all security is aligned with IT times enough? Image: Getty Images Image: used under license from shutterstock.com Image: used under

50. Slide 50: Cyber as a product

    Cyber insurance Cyber risk in the insurance industry – Cyber as a product Coverage versus Managing the We’re in the risk No quantum of Accumulation pace of change risk, and pricing management cyber claims in technology accordingly business data Image: used under license from shutterstock.com Image:

51. Slide 51: Commonalities between the two worlds

    Cyber insurance Cyber risk in the insurance industry – Commonalties between the two worlds PERIL PRODUCT People Lack of skilled cyber resources Lack of cyber skills in cyber underwriting Regulation No mandatory breach notification 85% of global market is US focused, outside US but EU to follow Techn

52. Slide 52: Cyber (re)insurance market – strong long-term growth

    Cyber insurance Cyber (re)insurance market – Strong and long-term growth to be expected GWP global cyber insurance market1 US$ bn GWP Munich Re cyber portfolio US$ m 10 Rest of world Reinsurance USA Primary insurance 263 191 5 126 135 0 2015 2016 … 2019 2020 2013 2014 2015 2016 Reinsurance: First-mo

53. Slide 53: Cyber outlook – expansion of coverage types

    Cyber insurance Cyber (re)insurance outlook – Significant expansion of coverage types possible Already in the market ... first offerings ... not yet Loss or Privacy Cyber Property (Contingent) Product Reputational Loss of theft of data breach extortion damage business liability damage intellectual p

54. Slide 54: Cyber accumulation scenarios

    Cyber insurance Munich Re cyber accumulation scenarios – Overview Accumulation Self-reproducing Data Corrupted software Failure of scenario IT viruses breach in core module external networks Description  Untargeted cyber attack  Many insureds affected  Randomly falsified data  Includes power out

55. Slide 55: Cyber underwriting guidelines: covered systems and networks

    Cyber insurance Cyber insurance underwriting guidelines covered systems and networks Can be covered as To be Covered IT outsourcing excluded provider Insured’s computer system: Cloud computing Failure of:  Internal computer systems (SaaS, PaaS, IaaS) 1. Electricity supply networks, under the operat

56. Slide 56: Munich Re's value-add

    Cyber insurance Munich Re’s value-add – Where can we offer support? Experience and expertise Continuous improvement Innovation We bring well-established We continuously monitor We are actively identifying and experience to the table with changes to the cyber developing cyber initiatives to experts w

57. Slide 57: Canadian multi-channel distribution

    Canadian multi-channel distribution Mary Forrest Investor Day 2017 57

58. Slide 58: Munich Re Canada Life at a glance

    Canadian multi-channel distribution Munich Re Canada Life at a glance Munich Re is a premium reinsurer in the Canadian life market and the biggest mortality risk carrier % Individual life reinsurance market1 Group reinsurance market2 Peer 5 Peer 1 Other Munich Re 6 27 9 79 Peer 4 10 TOTAL SUM INSURE

59. Slide 59: What will we achieve?

    Canadian multi-channel distribution What will we achieve? $$$ Open an Enlarge product Develop a new untapped market offering for clients revenue stream Investor Day 2017 59

60. Slide 60: Canadian group benefits market

    Canadian multi-channel distribution Canadian group benefits market $40 billion Market 35 million Canadians 20 million Mandatory insureds 2–3% Voluntary insureds Investor Day 2017 60

61. Slide 61: What is our innovation strategy?

    Canadian multi-channel distribution What is our innovation strategy? MANDATE Solve problems that are plaguing our industry by developing turnkey solutions we can bring to our partners to drive reinsurance reach and growth ! PROBLEM ! PROBLEM ! PROBLEM ! PROBLEM ! PROBLEM Lengthy policy Policy behavi

62. Slide 62: Creating value for all players in the sales chain

    Canadian multi-channel distribution Our innovation strategy is creating value for all “players” in the insurance sales chain MEMBER SPONSOR BROKER CARRIER Improve the user Create a platform that Creates a NEW stream A way to sell new experience by making it IMPROVES BENEFITS of REVENUE for existing

63. Slide 63: Video

    Video Investor Day 2017 63

64. Slide 64: Customer-centric insurance platform

    Canadian multi-channel distribution A customer-centric platform that allows the customer to research, buy and manage their insurance products and investments THE SOLUTION LIFEInsurance Life insurance P-CInsurance Munich Re P-C insurance core expertise CRITICALIllness Critical illness Health insuranc

65. Slide 65: Platform handles the insurance sales cycle

    Canadian multi-channel distribution The platform handles all aspects of the insurance sales cycle creating a “Virtual Insurance Company” … THE SOLUTION Life insurance Analytics and insights Claims adjudication Administration and customer support P-C insurance Cross-selling Policy issue Enrolment Mar

66. Slide 66: Improving customer experience and convenience

    Canadian multi-channel distribution … while improving customer experience and convenience THE SOLUTION Quick access to all products Claim status and submission and services Insurance | Investment | Vitality Upsell and cross-sell product suggestions based on A live feed of all activity customer behav

67. Slide 67: Modular platform for any brand

    Canadian multi-channel distribution We are creating a modular platform that allows any brand to participate, leveraging the Munich Re partner network DIGITAL MARKETING DIGITAL MARKETING PLATFORM PLATFORM (WHITE LABEL) Acquire and engage customers TRANSACTION AND MEMBER PLATFORM PRODUCT Life Home Aut

68. Slide 68: Digital agency working with any carrier, broker, brand

    Canadian multi-channel distribution With our platform and DIGITAL AGENCY we can work with ANY CARRIER, ANY BROKER and ANY BRAND Munich Re has created a DIGITAL INSURANCE agency We can work with ANY CARRIER, ANY BROKER or ANY BRAND to create a branded end-to-end experience We provide and manage all a

69. Slide 69: Becoming a larger player in Canadian insurance

    Canadian multi-channel distribution $$$ Our platform and innovation strategy will help us become an even larger player in the Canadian insurance space Objectives Manage Can$ 1.6bn in Group insurance premium within the Become a significant and relevant player in next 5 years the Group insurance marke

70. Slide 70: Early success in critical illness pilot

    Canadian multi-channel distribution $$$ We have seen early success in our controlled critical illness pilot, running since January 2017 FORECAST ACTUAL RESULTS DIFFERENCE CONVERSION RATE 3% 35% +1,100% Canadians purchase TPA new customers voluntary benefits purchased a CI product Can$ 150 Can$ 250 +

71. Slide 71: Significant benefits for Munich Re

    Canadian multi-channel distribution $$$ Our strategy provides significant benefits for Munich Re New insurance premiums Administration Minimum fees 50/50 reinsurance Deeper New relationships partners with clients Data warehouse Investor Day 2017 71

72. Slide 72: ERGO Mobility Solutions

    ERGO Mobility Solutions Mobilising growth as strategic partner of the automotive/mobility industry Karsten Crede Investor Day 2017 72

73. Slide 73: EMS entering the B2B2C automotive segment

    ERGO Mobility Solutions – Overview ERGO Mobility Solutions (EMS) entering the B2B2C automotive segment History  Founded in January 2017 as strategic response to future automotive and EMS insurance mobility opportunities  Originated from ERGO Strategy Programme (ESP)  Strong mandate regarding gove

74. Slide 74: Motor insurance remains the strongest growth driver

    ERGO Mobility Solutions Motor insurance with its majority market share also remains the strongest growth driver German P-C market share per line of business German motor insurance market per sales channel % 2016; 5-year growth trend % 2015; 5-year growth trend Private property Non-private property O

75. Slide 75: Challenging environment for automotive and insurance

    ERGO Mobility Solutions Challenging environment for both industries – Automotive and insurance Automotive industry trends Insurance industry trends … …  Connected cars  Internet of Things  Autonomous driving  Artificial intelligence Technological evolution  Sharing economy  Legacy IT  Electri

76. Slide 76: Interdependent insurance and automotive profit pools

    ERGO Mobility Solutions However, significant interdependency between insurance and automotive core profit pools Expected profit pools 2025 – Automotive, global, without inflation €bn 373 26 138 Automotive insurance products1 Claims 151 manage- ment 58 Complementary to Total Automotive Financial Afte

77. Slide 77: Becoming an integrated player in the mobility ecosystem

    ERGO Mobility Solutions Becoming an integrated player in the mobility ecosystem Mobility ecosystem ERGO value contribution to Connected car Inter- OEMs/mobility providers Mobility modal as a concepts  Reduce total cost of mobility Smart vehicle service Big data/ (TCM) telematics Vehicle  Support p

78. Slide 78: Adding value along the mobility value chain

    ERGO Mobility Solutions EMS to add value along the entire mobility value chain Selective measures along automotive value chain Research and Production Sales and Dealer Financial After- Mobility development and IT marketing network services sales ADAS1 ADAS1 Non-asset- After-sales Dedicated IT Omnich

79. Slide 79: R&D partnerships for innovative product offerings

    ERGO Mobility Solutions Using R&D partnerships to develop innovative product offerings EXAMPLE 1 ERGO FLEET CYBER SECURITY E-MOBILITY PROTECTION R&D partnership with … AFTER-SALES ADAS EFFECTIVENESS CONNECTIVITY SERVICES Images: used under license from Ford Investor Day 2017 79

80. Slide 80: After-sales and claims management concepts

    ERGO Mobility Solutions After-sales/claims management concepts help all parties to stabilise profit pools and increase customer satisfaction EXAMPLE 2 OEM + Increase parts turnover and contribution margin + Stabilisation of own repair shop network + Secure customer contact/customer satisfaction Cust

81. Slide 81: Building strong base capabilities and competitive edge

    ERGO Mobility Solutions Building strong base capabilities and competitive edge Strategic pillars of ERGO Mobility Solutions Mobility Solutions Differentiators Automotive insights Low-cost capabilities Omni-sales approach Bargaining power and claims steering Growth Advanced data management Collaborat

82. Slide 82: Joining forces between Munich Re and ERGO

    ERGO Mobility Solutions – Collaboration Joining forces internally between Munich Re and ERGO to create unique expertise ITERGO Köln Operations  Interlocked business Product Fleet manage- Asse- model mobilises the kuranz Claims … business ment manage- ment diverse assets and Actuarial Finance entire

83. Slide 83: Dedicated IT platform as differentiator

    ERGO Mobility Solutions – Technical excellence Dedicated IT platform as differentiator with flexible customer front-ends Key characteristics Main benefits Digital Customer and dealer interaction Highly flexible interaction customer-  Appealing user interfaces Simple, Short front-end …  “Agile deve

84. Slide 84: Exploiting digitalisation and customer experience

    ERGO Mobility Solutions – Digitisation Exploiting digitalisation potential and improving the customer experience Customer Perception Detection Information Purchase Usage Renewal journey App: App: Customer Reviews Advertising self-service Multi-channel On-demand Social media/ App: Digital online camp

85. Slide 85: Advanced data management for new services

    ERGO Mobility Solutions Leveraging advanced data management to provide essential customer value via new services and products Advanced Data Management integration [exemplary] Claims Accident data, first data notice of loss, … Battery usage Electric cars (charging, …) EMS-advanced Big data and AI Con

86. Slide 86: Intelligent business models for automotive fit

    ERGO Mobility Solutions – Growth Intelligent business models to optimise strategic fit with automotive industry Business development/ Joint financial sales cooperation services Development Mobility cooperation service provider Strategic cooperation Reinsurance/ primary insurance retrocession Joint r

87. Slide 87: Germany, China and India as anchor markets

    ERGO Mobility Solutions – Growth Germany, China and India as anchor markets and innovation hubs will be pursued first EMS wave I markets1 Key characteristics Car sales2 Market potential +5%  One of the top 4 automobile 3.7m  Main market for new mobility manufacturers in the world 3.5  Demand for

88. Slide 88: Strategic milestones to achieving growth targets

    ERGO Mobility Solutions Strategic milestones to achieving ambitious growth targets 2018 ONWARDS 2019 ONWARDS 2020 ONWARDS Winning strategic Establish core business Extend core business Extend business model partnerships to  First-stage  Second-stage  Extend value chain mobilise growth collaborati

89. Slide 89: Digitalisation as a must-do in India

    Digitalisation as a “must-do” to master high-volume, low-value policies in India Ritesh Kumar Investor Day 2017 89

90. Slide 90: Introduction to HDFC ERGO (India)

    Mass customisation in India Introduction to HDFC ERGO (India) – Joint venture of HDFC (51%) and ERGO (49%) Gross written premium1,2,3 €m Net income1,2,3 €m CAGR 839 38 ~44% 21 334 34 –2 FY2008 FY2013 FY2017 FY2008 FY2013 FY2017 Product mix, FY2017 (FY2008)1,2,4 % Market share of leading private-sect

91. Slide 91: India – Favourable demographics and internet access

    Mass customisation in India India – Favourable demographics and increasing internet access through smartphone Growing young population1,2 … … with high internet connectivity, esp. smartphones Youth population % Share of total population Smartphone utilisation (m)4 (15–34 years) in m1 1,200 35% 432 4

92. Slide 92: Non-life market in India – need for digitalisation

    Mass customisation in India Non-life market in India – Strong need for digitalisation for cost-efficient delivery of products and services Gross premium1,2,3,4,5 €bn Non-life penetration, 2017 (% of GDP)6 CAGR CAGR ~18% ~15% 2.8 56 18 1.9 4 10 FY2008 FY2013 FY2017 FY2025e 0.8 No. of policies (m) and

93. Slide 93: Scale of operations and pan-India reach

    Mass customisation in India HDFC ERGO has achieved multifold increase in scale of operations and pan-India reach by embracing digitalisation Customer density High Low HDFC ERGO’s wide reach … Scale of operation ~30,000 locations across  Issuing ~12 policies per min ~5,000 cities and villages  Serv

94. Slide 94: Using digital technologies to drive efficiencies

    Mass customisation in India Using digital technologies to drive efficiencies Key operating levers 1 2 3 4 5 Automation Mobile-first Self-service Predictive Digital architecture analytics innovations Maximising Increasing Consistency Improving Exploring Straight-through convenience for across channel

95. Slide 95: Automation – Plug and play architecture

    Mass customisation in India 1 Automation – Plug and play architecture facilitating straight-through processing (STP) to drive efficiencies Distribution mix, FY2017 (FY 2008)1,2 % 87% of policies issued in straight-through process ... Online Direct Total policies 5.6 2 (0) 43 (61) in STP mode 4.9 87%

96. Slide 96: Mobile-first architecture

    Mass customisation in India 2 Mobile-first architecture – A host of feature-rich mobile apps digitally enable distribution, customer service and claims Sales force Claims field force  Sales portal  Motor claims survey  Point of sale on mobile  Motor pre-inspection  Micro insurance  Microinsura

97. Slide 97: Video

    Video Investor Day 2017 97

98. Slide 98: Self-service – Digital service model

    Mass customisation in India 3 Self-service – Digital service model for new-age customers 12% of requests serviced in self-service mode1 Example of self-service features on our website 12% 9% 6% 4% 2% Q4FY16 Q1FY17 Q2FY17 Q3FY17 Q4FY17 E-Mail Policy Tax Certificate for Update Contact Make Transfer of

99. Slide 99: Predictive analytics for portfolio steering and fraud control

    Mass customisation in India 4 Predictive analytics helping in portfolio steering, optimising sales campaigns and fraud control Portfolio steering Customer analytics Analytics-based to drive profitability for renewal and cross-selling fraud control engines  Predictive models to estimate the  Predic

100. Slide 100: Digital innovation to improve customer engagement

     Mass customisation in India 5 Digital innovation – Continuously striving to improve customer engagement and drive growth Chatbot Robotics Voice “Aby” analytics  Helping call-centre agents address  RPA 1 Rambo implemented to  Voice analytics of calls to generate customer calls effectively automate

101. Slide 101: Internet of Things

     Internet of Things Greg Barats Investor Day 2017 101

102. Slide 102: Introduction to Hartford Steam Boiler (HSB)

     Internet of Things Introduction to Hartford Steam Boiler (HSB) – Market leader for equipment breakdown in North America GWP US$ m Combined ratio1 % Technical result US$ m HSB – Key facts  Founded in 1866: “the first 173 company in America devoted 1,113 84.7 85.3 83.1 primarily to industrial safety”

103. Slide 103: Specialty solutions for emerging risks globally

     Internet of Things Specialty solutions for emerging risks globally – With 20% GWP from innovative specialty products in 2016 Gross revenues Product and services inventory Recent highlights Fee engineering Commercial and PS S I D services1 industrial equipment Commercial/industrial equipment breakdow

104. Slide 104: HSB leads the Munich Re IoT strategy

     Internet of Things HSB leads the Munich Re IoT strategy MUNICH RE Global team driving IoT for Munich Re IoT Steering Committee  70 FTEs (60% of these resources came from outside HSB/Munich Re for technical expertise and/or software development skills) GLOBAL IOT LEAD  Commercial/industrial focus (

105. Slide 105: IoT: interconnection of embedded computing devices

     Internet of Things IoT: The interconnection (via the internet) of computing devices embedded in everyday objects, enabling them to send and receive data IoT creates massive opportunity … Manufacturing and industrial Estimates of global IoT economic impact applications offer the biggest Industrial Io

106. Slide 106: Insurance will expand beyond traditional coverages

     Internet of Things Insurance will transform by expanding beyond traditional coverages New IoT-based financial products $ New IoT-based Assuring business outcomes from IoT investments $ financial products  Providing warranties and other vehicles to assure that positive business outcomes from IoT imp

107. Slide 107: SME example: IoT drives results for insurer

     Internet of Things SME example: IoT drives strategic and bottom-line results for insurer Problem Goals Approach Results  Large claims  Lower frequency  Proof of concept  Phased approach allowed due to burst pipes in Using temperature sensors 20 churches – In a single client insurer to understand

108. Slide 108: Projected IoT impact on manufacturing

     Internet of Things Example: Projected IoT technology impact on manufacturing1 Real-time production dashboards Remotely monitor, optimise, and control production – better visibility, faster decision-making and improved yields Production and supply-chain optimisation Auto-sensing equipment Continuous

109. Slide 109: HSB/Munich Re market opportunity

     Internet of Things HSB/Munich Re has significant market opportunity HSB/Munich Re competitive advantage for IoT Importance of pursuing IoT strategy  Software and technology will play an increasingly larger Complex financial and insurance capabilities role in our everyday lives and our customers’ bu

110. Slide 110: IoT long-term strategy with practical experimentation

     Internet of Things IoT presents a long-term strategy that began four years ago with practical experimentation and ecosystem development 17,800 sensors deployed IoT summary  IoT is a threat as it will reduce 5,900 locations, 13,000 additional locations scheduled risks currently insured 58 alerting a

111. Slide 111: Digital Partners

     Digital Partners Andy Rear Investor Day 2017 111

112. Slide 112: Digital Partners at a glance

     Digital Partners Digital Partners at a glance Founded May 2016 30 employees operating as a single global team from London, Palo Alto and Cincinnati Experienced management team, with insurance, technology, consulting and programme management backgrounds Working closely with our partners at Munich Re

113. Slide 113: Digital Partners seeks to exploit three disruptions

     Digital Partners Digital Partners seeks to exploit three disruptions From … Reinsurer “Enterprise insurer” Brokers Customer  Policy admin systems  Personal  Enclosed data (Personal) lines  Large customer-service teams  Commercial (Commercial) lines MICRO-SERVICES PRODUCTION CHAIN … to Automated

114. Slide 114: Our proposition

     Digital Partners Our proposition EXAMPLE PARTNERSHIPS  USA, then Asia and Europe ex UK  Trov technology  Munich Re led Series D Global multiline Product design capacity and data  UK then overseas expansion  Munich Re technology AGILE  Munich Re invested in Series A DELIVERY  UK  Munich Re te

115. Slide 115: Partnering with disruptors

     Digital Partners We partner with disruptors who are changing the way insurance is experienced by customers What makes a good partnership Established company 2  Large total addressable market – big enough opportunity to reward success  Credible team – capable of building a business to address the o

116. Slide 116: Strategic investment activities

     Digital Partners Digital Partners – Strategic investment activities Investment thesis Investment approach Current portfolio  Participate in upside  Minority stakes of <20%  US$ 35m invested in  Accelerate growth  Stage-agnostic US and UK  Strengthen relationship  Sweet spot US$ 2–5m –  Techn

117. Slide 117: Trōv app partnership

     Digital Partners Trōv app enables people to easily insure things they love, for whatever duration, entirely from their smartphone How it works Major elements of the partnership How does Trōv benefit?  Product, underwriting and pricing are experimental and needed to support the Trōv customer experie

118. Slide 118: Slice Labs – Insurance for the sharing economy

     Digital Partners Slice Labs – Insurance for the sharing economy How it works Major elements of the partnership How does Slice benefit?  This product combines commercial and personal lines so required new underwriting thinking  Munich Re’s international footprint and venture capital funding facilit

119. Slide 119: Bought by many – Insurance tailored to individuals

     Digital Partners Bought by many – Insurance tailored to individuals with specific needs How it works Major elements of the partnership How does BBM benefit?  Flexible mix of Munich Re and BBM technology  Experimental product design and pricing  Venture capital  International scale 1. BBM uses Fa

120. Slide 120: Drover – Enabling Uber drivers

     Digital Partners Drover – Enabling Uber drivers and creating a new asset class for investors How it works Major elements of the partnership Fleet owner How does Drover benefit?  Insurance via API: fully automated digital customer API experience  Simple interface to Drover platform Driver  Rating

121. Slide 121: Building sustainability – Digital Partners in 5 years

     Digital Partners Building sustainability – Digital Partners in 5 years 40 live partnerships US$ 250m VC investments €70–100m operating investment OUR AMBITION To build a global digital-wholesale Global, multi-line proposition insurance platform with a largely Unique frictionless and automated fixed

122. Slide 122: nexible

     nexible John Paul Pieper Investor Day 2017 122

123. Slide 123: Relative investment into nexible is low

     nexible The relative investment into nexible is low – But a clear commitment to target a niche and new way of working ERGO strategy programme  Overall investment to build Fit … Digital ... Successful! nexible in Germany and another market until 2020 1 Sales – Elimination of 5 Foundational IT – 8 Fu

124. Slide 124: Untapped demand for pure online insurance

     nexible We see an untapped demand for pure online insurance Customer need? Reality? Go online and find the Customers are faced best insurance – fast, with complex products and easy and low-priced lengthy questionnaires Be confident about having Pure online Customers look for lowest prices the right

125. Slide 125: Starting conditions for nexible have been validated

     nexible Starting conditions for nexible have been validated Service quality of motor insurers in Germany?1 Acceptance for pure online sales, claims, service?2 “Inadequate” “Good” “Yes, I consider it” 10% 21% 40% “Sufficient” “OK” 31% 38% 1 Source: DISQ Studie KFZ Versicherer 2017 and Fanfocus Deutsc

126. Slide 126: The innovator's dilemma within large corporations

     nexible The innovator’s dilemma within large corporations “Lead customers” determine resource allocation Niche markets do not satisfy large corporations Disruptive market changes can not be analysed LARGE Existing processes and values are limiting success CORPORATION Technology often confused with c

127. Slide 127: nexible is well-positioned to innovate

     nexible That’s why nexible is well-positioned to innovate DISRUPTIVE We are targeting a niche market only INNOVATION We appreciate our market opportunity We build, measure, learn to find sweet spots LARGE A SPIN-OFF We create new processes and values CORPORATION ORGANISATION (but take advantage of c

128. Slide 128: nexible's clear value proposition

     nexible nexible is set up with a clear value proposition We built nexible to focus and No paper, no phone queue, Get insured in best serve cancellable monthly less than 90 seconds pure online customers Competitive pricepoints for Get claims settled in We came to stay, being part our customers becaus

129. Slide 129: It's simply made to fit

     nexible The customer impact is tangible: It’s simply made to fit Sarah Sandira 90 sec to price Claim settled Change contract for one all-in and paid in and coverage – package <2 hours where-/whenever Investor Day 2017 129

130. Slide 130: Duty first: start with what's most important

     nexible Duty first: We start with what’s most important, and work on excitement by experimenting From duty … … to excitement  State-of-the-art pricing … be in control of Always-available service by the digital We have a great  Worry-free coverage packages a complex subject channels you prefer, ful

131. Slide 131: Einfach online versichern

     nexible “Einfach online versichern” is our motto – A low cost operation offering a great customer experience All-in-one tarif Keep it simple Cancellable every month Pure online touchpoints, great user experience Do it online Risk factors adjustable anytime (repricing) Einfach Lots of standard, avoid

132. Slide 132: API-centric platform for speed and flexibility

     nexible nexible DE has built an API-centric platform for more speed and flexibility API-centric technology approach External front-end front-end  State-of-the art API-centric platform – efficient build-up of new business models using API to connect to third parties  Efficient business model due to

133. Slide 133: Simple product at an attractive price

     nexible nexible is aiming to offer a simple product for an attractive price in selected segments “Basic” “Comfort” “Premium” “ONE tariff” Other insurers vs. “Make money “Be easiest and with complexity” grow profitably”  Up to 20 criteria with 2–4 options, each differentiated in  Best and relevant

134. Slide 134: Motor first for volume and learning

     nexible We focus on motor first for volume and learning – And leverage experiences for services, products and markets Phase 1 Phase 2 Roadmap to success Illustrative Website Further Further products markets E.g. travel insurance E.g. further with 20% Enrich EU countries discount customer self-servic

135. Slide 135: nexible benefits from its position within Munich Re

     nexible nexible benefits from its position within Munich Re (Group) Support from functions Artificial intelligence services (e.g. HR, Legal) Data science know-how Data science know-how and capabilities DEFENCE VS. and capabilities DISRUPTION Joint real-time advertising Branding LOW-RISK TESTING ABIL

136. Slide 136: The nexible team

     nexible The nexible team brings in all required capabilities MANAGEMENT TEAM PROJECT TEAM (WITHIN ERGO) Former ERGO employee Business Transformation CEO CFO Former different development back into ERGO industry or company Part-time support ERGO COO (Interim) Public relations Human resources MARKETING

137. Slide 137: Key learnings for success

     nexible We learned that a few things are key to being successful 1. We trust in the brand we create and fill it with life 2. We stick to our beliefs, but do not shy away from massive pivots 3. Pure digital means pure digital – as far as we can get 4. Unleashing the power of two giants, we benefit fr

138. Slide 138: Financial calendar

     Shareholder information Financial calendar 2018 6 February Preliminary key figures 2017 and renewals Balance sheet press conference for 2017 financial statements 15 March Analysts’ conference in Munich with videocast 25 April Annual General Meeting 2018, ICM – International Congress Centre Munich 8

139. Slide 139: For information, please contact

     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: cfranz

140. Slide 140: 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

Munich Re — Investor Day (November 2017) on 6ix