22 slides from Munchener Ruckversicherungs-gesellschaft's earnings presentation, Aug 9, 2016
Slide 1: Half-year financial report as at 30 June 2016
Source: Shutterstock [M] Half-year financial report as at 30 June 2016 9 August 2016
Slide 2: Agenda
Agenda Nikolaus von Bomhard 1 Introduction 2 Jörg Schneider 2 Munich Re (Group) 6 Markus Rieß 3 ERGO 11 Torsten Jeworrek 4 Reinsurance 15 Nikolaus von Bomhard 5 Outlook 20 Half-year financial report as at 30 June 2016 2
Slide 3: Munich Re well-positioned to prevail through challenging times
Introduction Munich Re well-positioned to prevail through challenging times After Brexit vote – Quick recovery Many countries now have negative government bond yields1 following nervous capital markets … Maturity 2 3 4 5 6 7 8 9 10 15 20 30 Ongoing decline of reinvestment yield Yield Switzerland ≤
Slide 4: Short-term earnings pressure mitigated by strong balance sheet
Introduction Short-term earnings pressure mitigated by strong balance sheet – Attractive mid to long-term growth perspectives Strong balance sheet % Promoting innovative products2 €m ERGO: Increasing earnings €m 16 Investment reserve ratio (lhs) 1 8 P-C reinsurance reserve releases (rhs) ~500+ ~450
Slide 5: High Q2 result – Prudent positioning and strong balance sheet offset earnings pressure
Munich Re (Group) – Financial highlights H1 2016 High Q2 result – Prudent positioning and strong balance sheet offset earnings pressure Munich Re (Group) Q2 2016 (H1 2016) Net result Technical result €m Investment result €m Net result €m €974m (H1: €1,411m) 1,780 4,341 4,322 1,866 High investment an
Slide 6: Munich Re (Group)
Munich Re (Group) Half-year financial report as at 30 June 2016 6
Slide 7: IFRS capital position
Munich Re (Group) – Capitalisation IFRS capital position Equity €m Capitalisation €bn Equity 31.12.2015 30,966 Change Q2 0.3 0.4 0.4 0.4 Consolidated result 1,411 974 4.4 4.3 4.3 0.3 4.4 Changes Dividend –1,329 –1,329 4.4 Unrealised gains/losses 2,011 616 Exchange rates –388 272 Share buy-backs –393
Slide 8: Investment portfolio
Munich Re (Group) – Investment portfolio Investment portfolio Investment portfolio1 % Portfolio management in Q2 Land and buildings Fixed-interest securities Government bonds: Shift from Germany, 2.7 (2.9) 56.7 (55.7) UK and Portugal to France, USA and Canada Covered bonds: Overall reduction, Sh
Slide 9: Investment result
Munich Re (Group) – Investment result Investment result Investment result €m Q1 2016 Return1 Q2 2016 Return1 H1 2016 Return1 H1 2015 Return1 Regular income 1,628 2.8% 1,823 3.1% 3,451 3.0% 3,863 3.2% Write-ups/write-downs –219 –0.4% –22 –0.0% –242 –0.2% –239 –0.2% Disposal gains/losses 218 0.4% 910
Slide 10: Munich Health
Munich Health Munich Health H1 2016 vs. H1 2015 Gross premiums written €m Net result €m H1 2015 2,867 H1 2015 39 Technical result Overall combined ratio increased to 100.8% Foreign exchange –94 Technical result –18 Reinsurance: 102.1% (+1.4%) Divestments/investments 0 Non-technical result1 1 Bur
Slide 11: ERGO
ERGO Half-year financial report as at 30 June 2016 11
Slide 12: ERGO
ERGO ERGO H1 2016 vs. H1 2015 Gross premiums written €m Net result €m H1 2015 8,520 H1 2015 317 Decrease of technical result International (–€54m), mainly from disposal of Foreign exchange –74 Technical result –75 Italian entity Divestments/investments 0 Non-technical result1 136 Property-casu
Slide 13: ERGO Property-casualty Germany
ERGO ERGO Property-casualty Germany Combined ratio % Gross premiums written €m Loss ratio Expense ratio Other 199 443 Motor 2014 95.3 63.1 32.2 Legal protection 211 TOTAL 2015 97.9 64.7 33.2 Personal accident 325 €1,865m H1 2016 95.9 60.5 35.4 Fire/property 338 349 Liability Q2 2016 93.3 58.4 34
Slide 14: ERGO International – Property-casualty
ERGO ERGO International – Property-casualty Combined ratio % Gross premiums written – Property-casualty €m Loss ratio Expense ratio Other 195 460 Poland 2014 97.3 58.5 38.8 TOTAL Greece 79 2015 104.7 65.3 39.4 €1,229m H1 2016 98.5 59.2 39.3 Turkey 125 372 Legal protection Q2 2016 103.6 62.7 40.9
Slide 15: Reinsurance
Reinsurance Half-year financial report as at 30 June 2016 15
Slide 16: Reinsurance Life – Highlights
Reinsurance Reinsurance Life – Highlights H1 2016 vs. H1 2015 Gross premiums written €m Net result €m H1 2015 5,116 H1 2015 123 Technical result Q2 result of €103m in line with expectations Foreign exchange –228 Technical result 39 (Q1 affected by two large single claims) Divestments/investments
Slide 17: Reinsurance Property-casualty
Reinsurance Reinsurance Property-casualty H1 2016 vs. H1 2015 Gross premiums written €m Net result €m H1 2015 9,002 H1 2015 1,387 Technical result Major losses in Q2 slightly above expectation Foreign exchange –231 Technical result –253 of 12.0%, while H1 ratio is clearly below – nat cat ratio b
Slide 18: 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 H1 2016 94.3 55.1 7.5 31.6 91.3 92.3 Q2 2016 99.8 56.2 12.3 31.3 93.3 91.2 88.4 Major Reserve Normalised losses Nat cat Man-made releases1 combined rati
Slide 19: July renewals – Further slowdown of price softening
Reinsurance July renewals – Further slowdown of price softening July renewals 2016 % 100 –23.5 76.5 –3.0 26.0 99.5 While current market trends €m 2,103 –494 1,609 –62 546 2,093 continue, the price reduction is slowing further Change in premium –0.5% Top line remains stable with Thereof price mov
Slide 20: Outlook
Outlook Half-year financial report as at 30 June 2016 20
Slide 21: Outlook 2016
Outlook 2016 Munich Re (Group) Net result Gross premiums written €2.3bn €47–49bn Focus on bottom-line growth prevails Return on investment Combined ratio ~3% ~95% ~98% (prev. 95%) Solid return given ongoing Reinsurance ERGO Germany low-interest-rate environment ~99% ~99% Munich Health ERGO Internati
Slide 22: 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