40 slides from Munchener Ruckversicherungs-gesellschaft's earnings presentation, May 8, 2018
Slide 1: Quarterly statement as at 31 March 2018
http://www.presentationworks.de Image: Getty Images/Oaltindag Quarterly statement as at 31 March 2018 8 May 2018 Jörg Schneider
Slide 2: Agenda
Agenda 2 20 1 Munich Re (Group) 4 Outlook 7 2 ERGO 5 Backup 22 13 3 Reinsurance Quarterly statement as at 31 March 2018 2
Slide 3: Munich Re (Group) – Financial highlights Q1 2018
Munich Re (Group) – Financial highlights Q1 2018 Strong start to the year – Well on track to achieve annual targets Munich Re (Group) Q1 2018 (Q1 2017) Net result Technical result €m Investment result €m Net result €m €827m (€557m) 2,151 1,020 Good operating performance, 1,796 827 in particular exce
Slide 4: Munich Re (Group) – Capitalisation
Munich Re (Group) – Capitalisation IFRS capital position Equity €m Capitalisation €bn Equity 31.12.2017 28,198 0.4 0.4 0.4 Consolidated result 827 4.4 4.2 0.3 Changes 4.4 0.3 2.8 2.8 Dividend 0 Unrealised gains/losses –1,171 Exchange rates –313 Share buy-backs –311 Other –39 Equity 31.3.2018 27,191
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 Reduction of US inflation-linked bonds 3.6 (3.4) 54.2 (54.9) Slight increase of corporate bonds and Miscellaneous2 credit exposure 6.8 (6.
Slide 6: Munich Re (Group) – Investment result
Munich Re (Group) – Investment result Investment result Investment result (€m) Q1 2018 Return1 Q1 2017 Return1 Regular income 1,493 2.6% 1,634 2.7% Write-ups/write-downs –115 –0.2% –26 –0.0% Disposal gains/losses 584 1.0% 1,048 1.8% Derivatives2 –17 –0.0% –362 –0.6% Other income/expenses –149 –0.3%
Slide 7: ERGO
ERGO Quarterly statement as at 31 March 2018 7
Slide 8: ERGO Life and Health Germany
ERGO ERGO Life and Health Germany Q1 2018 vs. Q1 2017 Gross premiums written €m Major result drivers €m Q1 2017 2,324 Q1 2018 Q1 2017 Technical result 91 70 21 Foreign exchange –2 Non-technical result 60 103 –43 Divestments/investments 18 thereof investment result 1,049 1,337 –287 Organic change –
Slide 9: ERGO Property-casualty Germany
ERGO ERGO Property-casualty Germany Q1 2018 vs. Q1 2017 Gross premiums written €m Major result drivers €m Q1 2017 1,240 Q1 2018 Q1 2017 Technical result –6 16 –22 Foreign exchange 0 Non-technical result 20 29 –8 Divestments/investments 0 thereof investment result 37 49 –12 Organic change 26 Other
Slide 10: ERGO Property-casualty Germany
ERGO ERGO Property-casualty Germany Combined ratio % Gross premiums written €m Loss ratio Expense ratio Other Motor 2016 97.0 61.9 35.1 124 (115) 358 (345) 2017 97.5 64.1 33.5 Q1 2018 101.7 65.9 35.9 Legal protection TOTAL Liability 122 (119) €1,266m 260 (258) 101.7 100.0 100.3 99.1 98.1 96.1 93
Slide 11: ERGO International
ERGO ERGO International Q1 2018 vs. Q1 2017 Gross premiums written €m Major result drivers €m Q1 2017 1,315 Q1 2018 Q1 2017 Technical result 47 45 2 Foreign exchange –4 Non-technical result 12 7 5 Divestments/investments –18 thereof investment result 98 74 24 Organic change 63 Other –19 –35 17 Q1
Slide 12: ERGO International – Property-casualty
ERGO ERGO International – Property-casualty1 Combined ratio1 % Gross premiums written €m Loss ratio Expense ratio Other Poland 106 (138) 350 (279) 2016 98.0 64.9 33.1 Turkey TOTAL Spain 2017 95.3 63.7 31.6 46 (51) €991m 234 (232) Greece Legal protection Q1 2018 95.3 65.1 30.2 72 (74) 183 (175) C
Slide 13: Reinsurance
Reinsurance Quarterly statement as at 31 March 2018 13
Slide 14: Reinsurance Life and Health
Reinsurance Reinsurance Life and Health Q1 2018 vs. Q1 2017 Gross premiums written €m Major result drivers €m Q1 2017 3,488 Q1 2018 Q1 2017 Technical result 140 145 –5 Foreign exchange –279 Non-technical result 82 48 34 Divestments/investments 0 thereof investment result 207 221 –14 Organic change
Slide 15: Reinsurance Property-casualty
Reinsurance Reinsurance Property-casualty Q1 2018 vs. Q1 2017 Gross premiums written €m Major result drivers €m Q1 2017 4,558 Q1 2018 Q1 2017 Technical result 749 387 361 Foreign exchange –521 Non-technical result 89 104 –15 Divestments/investments 0 thereof investment result 404 470 –66 Organic c
Slide 16: Reinsurance – Combined ratio
Reinsurance Combined ratio Combined ratio % Basic losses Major losses Expense ratio 2016 95.7 54.2 9.1 32.4 160.9 2017 114.1 54.8 25.8 33.5 Q1 2018 88.6 53.2 1.4 34.0 101.9 Major Reserve Normalised losses Nat cat Man-made releases1 combined ratio2 103.9 99.8 97.1 93.9 92.5 Q1 2018 1.4 –1.1 2.6
Slide 17: Reinsurance – April renewals 2018
Reinsurance – April renewals 2018 April renewals Total property-casualty book1 % Regional allocation of April renewals % Remaining business Business up for January renewal Rest Europe 30 47 13 40 Worldwide TOTAL Latin America 16 €1.4bn 4 Japan North America 15 12 TOTAL €18bn Nat cat shares of renewa
Slide 18: Trend from January renewals continued – rate increases in loss-affected business
Reinsurance – April renewals 2018 Trend from January renewals continued – rate increases in loss-affected business, remaining portfolio rather flat April renewals 2018 % 100 –12.9 87.1 0.4 20.7 108.1 Price increase of 0.8% (~1.8% including interest-rate €m 1,440 –186 1,254 6 298 1,557 effects) in
Slide 19: Reinsurance – Regional allocation of July renewals
Reinsurance – July renewals Regional allocation of July renewals North America Worldwide Regional focus on North and 28% 26% Latin America, main renewal date in Australia Relatively high nat cat share of ~19% Latin America TOTAL Asia, Pacific and Africa 14% €2.6bn 12% Australia Europe 13% 7% Qua
Slide 20: Outlook
Outlook Quarterly statement as at 31 March 2018 20
Slide 21: Outlook 2018
Outlook 2018 GROUP REINSURANCE ERGO Gross premiums written Gross premiums written Gross premiums written €46–49bn €29–31bn €17–18bn Net result Net result Net result €2.1–2.5bn €1.8–2.2bn €250–300m Return P-C L/H technical result P-C combined ratio on investment combined ratio1 incl. fee income Germa
Slide 22: Backup
Backup Quarterly statement as at 31 March 2018 22
Slide 23: Premium development
Backup: Munich Re (Group) Premium development Gross premiums written €m Segmental breakdown €m Reinsurance ERGO Q1 2017 12,925 Property-casualty Life and Health Germany 5,317 (41%) ( 16.6%) 2,321 (18%) ( –0.1%) Foreign exchange –806 ERGO Divestments/ TOTAL Property-casualty Germany 0 investments €
Slide 24: Reconciliation of operating result with net result
Additional information: Group Finance Reconciliation of operating result with net result Reconciliation of operating result with net result €m Q1 2018 Operating result 1,283 Other non-operating result –194 Goodwill impairments 0 Net finance costs –51 Taxes –212 Net result 827 Other non-operating res
Slide 25: Actual vs. analysts’ consensus
Backup: Munich Re (Group) Actual vs. analysts’ consensus Operating result – Actual vs. analysts’ consensus1 €m Major developments in Q1 2018 Q1 2018 Consensus Delta Reinsurance Property-casualty Combined ratio: 88.6% (consensus: 91.0%) – major-loss ratio: 1.4%, Reinsurance Property-casualty 838 785
Slide 26: Reinsurance – Development of combined ratio
Backup: Reinsurance Development of combined ratio Combined ratio vs. basic losses % Combined ratio 160.9 Basic loss ratio 99.8 101.9 97.1 103.9 93.3 94.5 78.6 88.4 92.5 93.9 88.6 57.6 54.1 54.0 56.2 55.3 51.1 55.1 54.4 54.1 55.6 53.2 36.8 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 20
Slide 27: Breakdown of regular income
Backup: Investments Breakdown of regular income Investment result – Regular income (€m) Q1 2018 Q1 2017 Afs fixed-interest 690 752 –62 Afs non-fixed-interest 91 140 –49 Derivatives 26 33 –6 Loans 481 488 –7 Real estate 118 99 19 Deposits retained on assumed reinsurance and other investments 87 123
Slide 28: Breakdown of write-ups/write-downs
Backup: Investments Breakdown of write-ups/write-downs Investment result – Write-ups/write-downs (€m) Q1 2018 Q1 2017 Afs fixed-interest 0 –1 1 Afs non-fixed-interest –79 –16 –64 Loans 0 2 –2 Real estate –22 –31 9 Deposits retained on assumed reinsurance and other investments –13 20 –33 Total –115
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) Q1 2018 Q1 2017 Afs fixed-interest 134 48 86 Afs non-fixed-interest 209 312 –103 Loans 192 679 –488 Real estate 43 6 37 Deposits retained on assumed reinsurance and other inv
Slide 30: Return on investment by asset class and segment
Backup: Investments Return on investment by asset class and segment Q1 2018 %1 Regular income Write-ups/-downs Disposal result Extraord. derivative result Other inc./exp. RoI ᴓ Market value (€m) Afs fixed-income 2.2 0.0 0.4 0.0 0.0 2.6 125,237 Afs non-fixed-income 2.1 –1.9 4.9 0.0 0.0 5.1 17,135 Der
Slide 31: Investment result Reinsurance
Backup: Investments Investment result Reinsurance Reinsurance Life and Health (€m) Q1 2018 Return1 Q1 2017 Return1 Regular income 173 2.7% 201 3.0% Write-ups/write-downs –10 –0.2% 0 0.0% Disposal gains/losses 69 1.1% 41 0.6% Derivatives2 –8 –0.1% –7 –0.1% Other income/expenses –15 –0.2% –14 –0.2% In
Slide 32: Investment result ERGO
Backup: Investments Investment result ERGO Life and Health Germany (€m) Q1 2018 Return1 Q1 2017 Return1 Regular income 819 2.7% 860 2.8% Write-ups/write-downs –43 –0.1% –17 –0.1% Disposal gains/losses 322 1.1% 838 2.8% Derivatives2,3 18 0.1% –277 –0.9% Other income/expenses –67 –0.2% –67 –0.2% Inves
Slide 33: Investment result ERGO International
Backup: Investments Investment result ERGO International (€m) Q1 2018 Return1 Q1 2017 Return1 Regular income 101 2.3% 107 2.5% Write-ups/write-downs –15 –0.4% –7 –0.2% Disposal gains/losses 11 0.3% 21 0.5% Derivatives2 8 0.2% –37 –0.9% Other income/expenses –7 –0.2% –10 –0.2% Investment result 98 2.
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) +7.9 +3.9 –7.3 –13.9 Change in on-balance-sheet reserves, net (€bn)1 +1.8 +0.9 –1.7 –3.2 Change in off-balance-sh
Slide 35: On- and off-balance-sheet reserves
Backup: Investments On- and off-balance-sheet reserves €m 31.12.2015 31.12.2016 31.12.2017 31.3.2018 in Q1 Market value of investments 233,023 238,490 231,885 229,781 –2,104 Total reserves 25,969 28,496 25,395 22,852 –2,543 On-balance-sheet reserves Fixed-interest securities 7,886 8,649 7,622 6,73
Slide 36: On- and off-balance-sheet reserves
Backup: Investments On- and off-balance-sheet reserves €m On-balance-sheet reserves Off-balance-sheet reserves1 Total reserves (gross) 9,272 13,580 Provision for deferred premium refunds –4,462 –9,278 Deferred tax –968 –1,278 Minority interests –10 0 Consolidation and currency effects –176 – Shareho
Slide 37: Changes to shares in circulation
Backup: Shareholder information Changes to shares in circulation Acquisition of Retirement of Weighted average number of shares in circulation Shares 31.12. own shares in own shares in 31.3. (millions) 2017 Q1 2018 Q1 2018 2018 (millions) Shares in 165.9 160.0 151.3 –1.7 – 149.6 154.1 150.3 circulat
Slide 38: Financial calendar
Backup: Shareholder information Financial calendar 2018 8 AUGUST Half-year financial report as at 30 June 2018 7 NOVEMBER Quarterly statement as at 30 September 2018 2019 6 FEBRUARY Preliminary key figures 2018 and renewals Balance sheet press conference for 2018 financial statements 20 MARCH Analys
Slide 39: 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 40: 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