Munchener Ruckversicherungs-Gesellschaft AG · XETR:MUV2
Munchener Ruckversicherungs-Gesellschaft — Munich Re — Morgan Stanley European Financials Conference 2012
22 slides from Munchener Ruckversicherungs-Gesellschaft's conference presentation, Mar 29, 2012
Slide 1: Reliable Continuity in Times of Uncertainty
RELIABLE CONTINUITY IN TIMES OF UNCERTAINTY Morgan Stanley M St l "European "E Fi Financials i l C Conference f 2012 – Creating Value in a Deleveraging Environment" London, 29 March 2012 Jörg Schneider European Financials Conference 2012 1
Slide 2: In 2011 Munich Re coped well with historically high nat cat claims and severe capital market disruption
Munich Re highlights In 2011 Munich Re coped well with historically high nat cat claims and severe capital market disruption … 10-year German Bund yield1 Credit spreads1,2 EURO STOXX 501 –113 bps +145 bps –17% Natural catastrophes3 – Economic losses of US$ 380bn, thereof US$ 105bn insured Severe wea
Slide 3: Munich Re's long-term shareholder return remains attractive
Munich Re highlights … while Munich Re's long-term shareholder return remains attractive Years of volatile macroeconomic environment 2007 2008 2009 2010/2011 Ongoing Subprime crisis Credit crisis Global recession Sovereign crisis uncertainty Impact Risk/return profile1 % T t l shareholder Total h h
Slide 4: Key achievements in 2011 remain building blocks of Munich Re's future development
Munich Re highlights Key achievements in 2011 remain building blocks of Munich Re's future development Key achievements in 2011 1 Disciplined asset-liability management Investment and duration management mitigate capital market disruption 2 Deeply-embedded Deeply embedded risk management Continuity
Slide 5: Prudent investment approach
1 Disciplined asset-liability management Prudent investment approach Unrealised gains1 % Asset gearing2 % 3 5.5 "Safe haven" gov. bonds 191 4.3 3.8 Bank bonds 28 3.1 Structured credit 27 2008 2009 2010 2011 "PIIGS" gov. bonds 25 Interest rate sensitivity (DV01)4 €m Net equities 18 Reinsurance –9.5
Slide 6: Active asset management on the basis of a well-diversified portfolio
1 Disciplined asset-liability management Active asset management on the basis of a well-diversified portfolio Investment portfolio1 % Major changes in 2011 Land and buildings Fixed-interest Shift from weaker to high-quality government 2.6 (2.9) securities bonds, esp. Germany and western Europe 56.2
Slide 7: Investment strategy: further optimisation on the basis of a defensive risk profile
1 Disciplined asset-liability management Investment strategy Further optimisation on the basis of a defensive risk profile Market expectations of MEAG General investment strategy "Relief" Relief No intention to increase asset risk Considerable rise in interest significantly rate level; high but
Slide 8: Extensive strategic asset-liability management measures in 2011
2 Deeply-embedded risk management – Investment risk Extensive strategic asset-liability management measures in 2011 Asset-side measures Liability-side measures ERGO life Focus on own business portfolio Substantial measures taken at early stage to New product development in primary life address int
Slide 9: Munich Re benefits from strong diversification between natural catastrophe risks
2 Deeply-embedded risk management – Insurance risk Munich Re benefits from strong diversification between natural catastrophe risks Attractive risk-return profile Premiums Losses Expenses Illustrative Cost of capital Economic profit 1 Munich Re's nat cat risk profile Strategy in peak scenarios Mun
Slide 10: Sound capital position according to all metrics
3 Sound capital base Sound capital position according to all metrics Capital structure €bn Solvency ratio % Senior and other debt1 Solvency I ratio Economic solvency ratio Solvency II ratio Subordinated S b di t d d debt bt Shareholders´ equity 269 268 261 238 245 194 0.5 Debt leverage2 (%) 153 136
Slide 11: Moderate impact of capital market scenarios on Munich Re's solvency position
3 Sound capital base Moderate impact of capital market scenarios on Munich Re's solvency position Strong economic solvency position1 % Ratio as at 31.12.11 111 Interest-rate +100bps 134 Interest-rate –100bps 85 Spread +100bps 95 Equity markets +30% 117 E it markets Equity k t –30% 30% 108 Limit at 8
Slide 12: Economic capital – Management intervention much more granular than supervisory scheme
3 Sound capital base Economic capital – Management intervention much more granular than supervisory scheme Munich Re actions1 Munich Re solvency ratio Regulatory actions2 >120% MRCM Solvency II MCR–100% Excellent capitalisation Below target capitalisation Solvency ratio adjusted Capital repatriati
Slide 13: Capital strength facilitates reliable shareholder participation
3 Sound capital base Capital strength facilitates reliable shareholder participation Sustainable book value … € … and dividend growth € 155 4 155.4 CAGR: 8.5% CAGR: 12.4% 6.25 BV/share (plus dividend/share buy-back) BV/share 6.6 129.9 5.5 5.3 5.0 3.10 4.1 35 3.5 2.7 CAGR: 5.7% 88 0 88.0 2005 2011 20
Slide 14: Business portfolio of complementary profiles performing in any market environment
4 Well-balanced business portfolio Business portfolio of complementary profiles performing in any market environment ILLUSTRATIVE Primary life ERGO International es er Highe omic change I particular, In ti l products d t withith C ti Cautious b business i expansion i investment component in CEE and
Slide 15: Ongoing price increases expected in upcoming reinsurance renewals
4 Well-balanced business portfolio Ongoing price increases expected in upcoming reinsurance renewals January April July Worldwide Asia/Pacific/Africa Worldwide Rest of Worldwide Rest of Asia/Pacific/Africa Asia/Pacific/Africa Europe Europe Latin Australia/ TOTAL TOTAL America New TOTAL North N th Ze
Slide 16: Munich Re well positioned to manage changes and capture opportunities arising from Solvency II
Outlook Solvency II Munich Re well positioned to manage changes and capture opportunities arising from Solvency II Key open issues Further process for 2012 Start of Solvency II1 Valuation of insurance Adoption of Omnibus II Phasing in: 2013 liabilities, especially Directive Application of So
Slide 17: Solvency II allows for an adequate reporting of the insurance business model
Outlook Solvency II Solvency II allows for an adequate reporting of the insurance business model Liabilities Purpose in SII Detailed summary of own EBS funds – shows legal origin and mix of own funds Disclosure of tiers permits assessment of quality of own Assets funds in SII Compares own fund
Slide 18: Outlook 2012 – Back to normal
Outlook Outlook 2012 – Back to normal Munich Re (Group) GROSS PREMIUMS WRITTEN RETURN ON INVESTMENT NET RESULT €48–50bn ~3.5% ~€2.5bn Reinsurance €25–27bn Ongoing low interest rate RoRaC target of 15% after tax environment gradually over the cycle to stand Primary insurance €17–18bn reducing running
Slide 19: Munich Re geared to creating value in a deleveraging environment
Key takeaways Munich Re geared to “creating value in a deleveraging environment” Good track record of dealing with challenging economic conditions We remain a strong partner for clients and reliable for shareholders in times of uncertainty Integrated teg ated bus business ess model ode sa safeguardi
Slide 20: Financial calendar
Backup: Shareholder information Financial calendar FINANCIAL CALENDAR 26 April 2012 Annual General Meeting, Munich 27 April 2012 Dividend payment 8 May 2012 Interim report as at 31 March 2012 15 May 2012 Deutsche Bank "German, Swiss & Austrian Conference", Frankfurt 21 Mayy 2012 Deutsche Bank "2012
Slide 21: For information, please contact
Backup: Shareholder information For information, please contact INVESTOR RELATIONS TEAM Christian Becker-Hussong Ralf Kleinschroth Thorsten Dzuba Head of Investor & Rating Agency Relations Tel.: +49 (89) 3891-4559 Tel.: +49 (89) 3891-8030 Tel.: +49 (89) 3891-3910 E-mail: rkleinschroth@munichre.com E
Slide 22: Disclaimer
Disclaimer This presentation contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Re Known and unknown risks, risks uncertainties and other factors could lead to material differences between the forward-looking statements given here
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