Munchener Ruckversicherungs-gesellschaft Ag · XETR:MUV2
Munchener Ruckversicherungs-gesellschaft — Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München — Q1 2023 Earnings Presentation
59 slides from Munchener Ruckversicherungs-gesellschaft's earnings presentation, May 18, 2023
Slide 1: Quarterly statement as at 31 March 2023
Munich Re Group Quarterly statement as at 31 March 2023 17 May 2023 Christoph Jurecka (CFO)
Slide 2: Agenda
Quarterly statement as at 31 March 2023 Agenda 01 02 03 04 05 06 Transition Additional Munich Re ERGO Reinsurance to IFRS 9/17 Outlook information Quarterly statement as at 31 March 2023 17 May 2023 2
Slide 3: Munich Re
01 Munich Re Source: Munich Re
Slide 4: Good start to the year with earnings above pro-rata guidance
Munich Re – Financial highlights Q1 2023 Good start to the year with earnings above pro-rata guidance Elevated result in prior-year quarter result due to lower major losses and FX Net result Total technical result Net financial result Operating result €m €m €m €m 1,809 1,863 1,768 1,864 1,480 1,271
Slide 5: Capital position
Munich Re – Capitalisation Capital position Equity Capitalisation €m €bn Equity 31.12.2022 27,245 10.7% 10.0% 9.9% Net result 1,271 Changes 0.3 0.3 0.3 Dividend 0 Senior debt 5.1 4.7 4.8 Share buy-backs –373 Subordinated debt 16.3 18.0 18.0 Unrealised gains/losses 749 CSM (after tax) Exchange rates
Slide 6: Investments
Munich Re – Investments Investments Q1 2023 Investment portfolio1 % Government/Semi-government bonds2 34 (34) Alternative investments 15 (15) Covered bonds/mortgage loans 15 (15) Equities3 4 (4) Total Corporate bonds 14 (14) Business-related participations 4 (4) €226bn Emerging-market government bon
Slide 7: Investment result
Munich Re – Investments Investment result €m Q1 2023 Return1 Q1 2022 Return1 Regular income 1,601 3.0% 1,415 2.3% Write-ups/write-downs –28 –0.1% –1,031 –1.7% Change in expected credit loss (ECL) –38 –0.1% 0 0.0% Disposal gains/losses 166 0.3% 936 1.5% Fair-value change 74 0.1% –926 –1.5% Other inco
Slide 8: Net financial result
Munich Re – Investments Net financial result €m Q1 2023 Q1 2022 ▪ Investment result benefits from increased interest rates and some disposal gains in Investment result 1,612 258 reinsurance Currency result –145 221 ▪ Negative currency result in both fields of business Investment result from unit-lin
Slide 9: ERGO
02 ERGO Source: Munich Re
Slide 10: ERGO Life and Health Germany
ERGO ERGO Life and Health Germany Key ▪ Higher CSM compared to prior year leads Total technical result messages to higher absolute release of CSM and €m accordingly a higher total technical result ▪ Total technical result mainly 258 reflects release of CSM and risk ▪ Net income (€41m) burdened by no
Slide 11: ERGO Life and Health Germany – Total technical result
ERGO ERGO Life and Health Germany Total technical result – Q1 2023 €m Release of CSM 227 ▪ 2.1% release of CSM results in higher absolute amounts, as current CSM Release of risk adjustment (non-PAA) 9 level benefits from higher interest rates vs. transition at 1/1/2022 Experience adjustments not adj
Slide 12: ERGO Life and Health Germany – CSM/RA
ERGO ERGO Life and Health Germany – CSM/RA €m CSM1 RA1 CSM/RA CSM 10,448 580 31.12.2022 ▪ New contracts added in life new New contracts book and long-term health – run-off added 43 2 of life back-book and strategic shift in health to short-term business Accretion result in lower new contracts added
Slide 13: ERGO Property-casualty Germany
ERGO ERGO Property-casualty Germany Key ▪ Strong total technical result driven by very Total technical result messages low large losses and low acquisition costs €m due to seasonality of new business High total technical result and low 206 combined ratio in Q1 2023 ▪ Very high net result also driven
Slide 14: ERGO Property-casualty Germany
ERGO ERGO Property-casualty Germany Insurance revenue (gross) in Q1 2023 (Q1 2022) Combined ratio €m % Loss ratio Expense ratio 2022 90.3 61.2 29.1 Total Q1 106.3 76.8 29.5 2022 1,117m € (€953m) Q1 2023 81.2 53.8 27.3 106.3 Fire/property 257 Legal protection 141 To be disclosed during the year Motor
Slide 15: ERGO International
ERGO ERGO International Key ▪ Total technical result in P-C mainly Total technical result messages burdened mainly by large losses in Poland €m Combined ratio at Q1 of 95.4% ▪ Total technical result of L/H in line with (88.7%) impacted by: 97 90 expectation; CSM release dominated by ▪ Large losses i
Slide 16: ERGO International
ERGO ERGO International Property- Combined ratio casualty1 % 95.4 97.5 113.2 97.7 88.7 95.0 94.2 90.9 To be disclosed during the year 82.2 with the quarterly releases Poland 2 Legal Greece Baltics Austria 3 Thailand 4 Spain Q1 Q2 Q3 Q4 Q1 protection 2022 2022 2022 2022 2023 Life and Total technical
Slide 17: Reinsurance
03 Reinsurance Source: Munich Re
Slide 18: Life and health reinsurance
Reinsurance Life and health reinsurance Key ▪ Strong total technical result above Total technical result messages pro-rata guidance €m ▪ Pleasing new business development, ▪ Release of CSM and RA in line especially in North America 320 with expectations 238 ▪ FinMoRe business performing well, yet ne
Slide 19: Life and health reinsurance – Total technical result
Reinsurance Life and health reinsurance Total technical result – Q1 2023 €m Release of CSM 214 ▪ Release of CSM in line with expectation of ~2% per quarter ▪ Release of risk adjustment also in line with Release of risk adjustment 63 expectation ▪ Slightly negative experience adjustments Experience a
Slide 20: Life and health reinsurance – CSM/RA
Reinsurance Life and health reinsurance – CSM/RA €m CSM1 RA1 CSM/RA CSM 10,980 2,907 31.12.2022 ▪ Decline driven by shift to RA New contracts ▪ New contracts added reflect profitable added 225 32 new business growth, especially in North America, as well as Europe and Accretion Asia of interest 35 10
Slide 21: Property-casualty reinsurance
Reinsurance Property-casualty reinsurance Key ▪ Strong revenue growth of 13.1% vs. Q1 2022 Total technical result messages ▪ Combined ratio of 86.5% largely in line with guidance €m despite elevated major losses ▪ Increased combined ratio 1,350 driven by higher major loss ▪ Normalised combined ratio
Slide 22: Property-casualty reinsurance – Combined ratio
Reinsurance Property-casualty reinsurance Combined ratio % Q1 Ø Annual Basic losses Major losses Expenses 2023 expectation 2022 83.2 52.5 15.4 15.3 Change in loss component –1.1 ~ 0.0 Q1 2022 77.0 51.9 11.1 13.9 Major losses1 16.4 ~ 14.0 Q1 2023 86.5 55.7 16.4 14.4 Nat cat1 13.8 ~ 10.0 To be disclos
Slide 23: April renewals
Reinsurance April renewals Total property-casualty book1 Regional allocation of April renewals % % Europe 10 Latin America 12 Total Worldwide 19 North America 14 Total €2.6bn €34bn Asia/Pacific/Africa 44 Nat cat shares of renewable portfolio2 % Nat cat Other perils January renewals 44 January 11 89
Slide 24: April renewals – Continued trend of profitable growth
Reinsurance April renewals – Continued trend of profitable growth with sizeable improvements in terms and conditions Renewals 2019–2022 April % renewals 20231 Higher risk-adjusted pricing ▪ Individual price changes by line of business at a stable 2.3 portfolio composition amount to 3.9% – additional
Slide 25: Regional allocation of July renewals
Reinsurance Regional allocation of July renewals Outlook ▪ Regional focus Total on USA, Latin America €4.4bn and Australia ▪ Comparatively high nat cat share of ~ 27% North America 25% Asia/Pacific/Africa 10% Australia/New Zealand 24% Europe 3% Latin America 12% Worldwide 26% Quarterly statement as
Slide 26: Transition to IFRS 9/17
shansekala / iStockphoto / Getty Images 04 Transition to IFRS 9/17 Source: Munich Re
Slide 27: IAS 39/IFRS 17: Balance sheet
Transition to IFRS 9/17 IAS 39/IFRS 17: Balance sheet 31.12.2022 vs. 01.01.2022 Deviation vs. Deviation vs. Assets 31.12.2022 01.01.2022 Equity and liabilities 31.12.2022 01.01.2022 A. Intangible assets 4,284 185 A. Equity 27,245 –1,220 B. Insurance contracts ceded that are assets 3,892 312 B. Subor
Slide 28: Key financials under IFRS 17 vs. IFRS 4
Transition to IFRS 9/17 Key financials under IFRS 17 vs. IFRS 4 FY 2022 IFRS 17 (IFRS 4) Group Major deviations Net result RoI (IAS 39) RoE €5.3bn (€3.4bn) 1.3% (2.1%) 20.2% (13.5%) ▪ Group Higher net result: see next slide Lower RoI driven by mark-to-market valuation of loans in VFA business Combin
Slide 29: Comparison of net result under IFRS 17 vs. IFRS 4
Transition to IFRS 9/17 Comparison of net result under IFRS 17 vs. IFRS 4 FY 2022 Net result €m L/H P-C ERGO L/H ERGO P-C ERGO Total Major drivers reinsurance reinsurance Germany Germany International 2023 L/H reinsurance: Earlier earnings recognition and other methodological differences (e.g. lower
Slide 30: Net result outlook 2023 vs. FY 2022
Outlook Net result Outlook 2023 vs. FY 2022 €bn (after tax) 5.3 0.3 –0.7 –1.0 4.0 Net result 2022 Reinsurance: Reinsurance: P-C reinsurance: Prudent planning Operating Outlook 2023 (IFRS17 / IAS39 incl. Higher expected Elimination of Adjusting for positive impact approach to cover improvements, (IFR
Slide 31: Outlook
05 Outlook Source: Munich Re
Slide 32: Outlook 2023
Outlook 2023 Group Insurance revenue (gross) Net result Return on investment ~ €58bn ~ €4.0bn > 2.2% Combined ratio ERGO Insurance revenue (gross) Net result P-C Germany International ~ €19bn ~ €0.7bn ~ 89% ~ 90% Combined ratio Total technical result Reinsurance Insurance revenue (gross) Net result
Slide 33: Additional information
06 Additional information Source: Munich Re
Slide 34: Actual vs. analysts' consensus
Additional information Actual vs. analysts’ consensus Operating result – Actual vs. analysts’ consensus1 KPIs – Actual vs. analysts’ consensus1 €m €m Q1 2023 Consensus Delta Q1 2023 Consensus Impact2 Life and health reinsurance 391 260 131 Total technical result 320 251 69 Property-casualty reinsura
Slide 35: Segment income statement Q1 2023
Additional information Segment income statement Q1 2023 €m Life and health Property-casualty ERGO ERGO ERGO Total reinsurance reinsurance L/H Germany P-C Germany International Q1 2023 Gross premiums written1 3,290 9,050 2,612 1,763 1,514 18,229 Insurance revenue from insurance contracts issued 2,734
Slide 36: Segment income statement FY 2022
Additional information Segment income statement FY 2022 €m Life and health Property-casualty ERGO ERGO ERGO Total reinsurance reinsurance L/H Germany P-C Germany International FY 2022 Gross premiums written1 13,676 34,399 9,703 4,198 5,157 67,133 Insurance revenue from insurance contracts issued 11,
Slide 37: ERGO Life and Health Germany – Total technical result
ERGO ERGO Life and Health Germany – Total technical result FY 2022 €m ▪ Release of CSM, including expected Release of CSM 948 over-return ▪ Release of risk adjustment mainly Release of risk adjustment (non-PAA) 49 driven by life back book Experience adjustments not adjusted against CSM (non-PAA) 19
Slide 38: ERGO Life and Health Germany – CSM/RA
ERGO ERGO Life and Health Germany – CSM/RA FY 2022 €m CSM1 RA1 CSM/RA CSM 9,411 1,038 01.01.2022 ▪ New contracts added in life new book New contracts 221 14 and health – due to life back book run-off added and strategic shift in health to short-term Accretion (PAA) business clearly below CSM of inte
Slide 39: ERGO Property-casualty Germany
ERGO ERGO Property-casualty Germany FY 2022 Combined ratio in 2022 Insurance revenue (gross) in 2022 % €m Combined ratio 90.3% Fire/property 1,065 Expense ratio 29.1% Loss ratio 61.2% Liability 799 Total Motor 712 € 4,227m Personal accident 530 Legal protection 460 Marine 360 Other 301 2022 Quarterl
Slide 40: ERGO International
ERGO ERGO International FY 2022 Property- Combined ratio % 98.2 97.7 105.4 casualty1 Combined ratio 95.5% 88.7 95.8 92.0 Expense ratio 31.6% Loss ratio 63.9% Poland Legal Greece Baltic Austria Spain 2022 protection states Life and Total technical result – 2022 CSM/RA development Health €m €m CSM2 RA
Slide 41: Life and health reinsurance – Total technical result
Reinsurance Life and health reinsurance – Total technical result FY 2022 €m Release of CSM 954 ▪ Release of CSM in line with expectation of ~8% p.a. ▪ Release of risk adjustment also in line with Release of risk adjustment 255 expectation ▪ Negative experience adjustments mostly from Experience adju
Slide 42: Life and health reinsurance – CSM/RA
Reinsurance Life and health reinsurance – CSM/RA FY 2022 €m CSM1 RA1 CSM/RA CSM 9,808 3,888 01.01.2022 ▪ Increase mainly driven by New contracts profitable new business growth, added 1,354 285 especially in North America ▪ Positive operating changes from Accretion of interest 85 29 favourable in-for
Slide 43: Property-casualty reinsurance – Combined ratio
Reinsurance Property-casualty reinsurance – Combined ratio FY 2022 Combined ratio Ø Annual % 2022 expectation 83.2% Change in loss component –2.0 ~ 0.0 Expenses 15.3% Major losses1 15.4 ~ 16.5 Major losses 15.4% Nat cat1 8.7 ~ 10.8 Basic losses 52.5% Man-made1 6.7 ~ 5.7 Reserve releases2 –5.3 –5.0 N
Slide 44: April renewals
Additional information April renewals % 100 –12.9 87.1 +13.9 +10.1 111.1 Continued trend of profitable growth with sizeable €m 2,611 –337 2,274 +363 +264 2,902 improvements in terms and conditions Change in premium +11.1% ▪ Property XL Thereof price movement1 ~ +4.7% Substantial expansion of nat The
Slide 45: Revenue development
Additional information Revenue development Q1 2023 Insurance revenue (gross) Segmental breakdown €m €bn Revenue Share Q1 2022 13,261 Life and health reinsurance 2.7 19 % Property-casualty reinsurance 6.5 46 % Total ERGO Life and Health Germany 2.6 18 % €14.3bn Foreign 100 ERGO Property-casualty Germ
Slide 46: Insurance revenue (gross): ERGO International
Additional information Insurance revenue (gross): ERGO International Q1 2023 Property-casualty Life and Health Q1 Q1 2023 Life 2023 Austria 42 Poland 430 Belgium 34 Legal protection 156 Other 54 Greece 61 Insurance Insurance Total 130 revenues (gross) revenues (gross) Baltic states 59 € 817m € 545m
Slide 47: Total comprehensive income
Additional information Total comprehensive income Q1 2023 €m Reinsurance ERGO ERGO ERGO Munich Re Total L/H Germany P-C Germany International Q1 2023 Total comprehensive income 1,383 93 185 77 1,739 Thereof net result 1,051 41 166 12 1,271 Thereof change in OCI (after tax) 332 52 19 65 468 Thereof f
Slide 48: Change in CSM and risk adjustment by segment
Additional information Change in CSM and risk adjustment by segment Q1 2023 €m CSM vs. Risk adjustment vs. 31.12.2022 (%) 31.12.2022 (%) Life and health reinsurance 10,550 –3.9% 3,263 12.3% Property-casualty reinsurance 12 – 345 1.6% ERGO L/H Germany 10,762 3.0% 549 –5.4% ERGO P-C Germany 384 3.
Slide 49: Return on equity
Additional information Return on equity Q1 2023 €m Reinsurance ERGO Munich Re Group 31.3.2023 31.12.2022 31.3.2023 31.12.2022 31.3.2023 31.12.2022 Adjusted equity 24,543 22,743 5,889 5,524 30,433 28,267 Average adjusted equity 23,643 5,707 29,350 Net result 1,051 219 1,271 RoE 17.8% 15.4% 17.3% Quar
Slide 50: Return on investment by asset class and segment
Additional information Return on investment by asset class and segment Q1 2023 %1 Regular Write-ups/-downs Disposal Fair-value Other ᴓ Market income change in ECL result change inc./exp. RoI value (€m) Fixed income 2.9 –0.1 –0.4 –0.1 0.0 2.4 173,153 Equities 2.2 0.0 0.0 24.2 0.0 26.4 10,804 Affiliat
Slide 51: Investment result – Reinsurance
Additional information Investment result – Reinsurance Q1 2023 Life and health reinsurance €m Q1 2023 Return1 Q1 2022 Return1 Regular income 174 3.2% 149 2.4% Write-ups/write-downs –1 0.0% –48 –0.8% Change in expected credit loss (ECL) 1 0.0% 0 0.0% Disposal gains/losses 8 0.2% 29 0.5% Fair-value ch
Slide 52: Investment result – ERGO
Additional information Investment result – ERGO Q1 2023 Life and Health Germany €m Q1 2023 Return1 Q1 2022 Return1 Regular income 782 3.1% 771 2.6% Write-ups/write-downs –1 0.0% –447 –1.5% Change in expected credit loss (ECL) –46 –0.2% 0 0.0% Disposal gains/losses –29 –0.1% 401 1.3% Fair-value chang
Slide 53: Investment result – ERGO International
Additional information Investment result – ERGO Q1 2023 International €m Q1 2023 Return1 Q1 2022 Return1 Regular income 72 1.6% 59 1.2% Write-ups/write-downs 0 0.0% –2 0.0% Change in expected credit loss (ECL) –1 0.0% 0 0.0% Disposal gains/losses –3 –0.1% 19 0.4% Fair-value change 17 0.4% 10 0.2% Ot
Slide 54: Duration investment portfolio
Additional information Duration investment portfolio Q1 2023 Portfolio duration1 Assets Liabilities Reinsurance 4.9 (4.8) 5.3 (5.0) ERGO 7.7 (7.6) 6.7 (6.9) Munich Re 6.6 (6.5) 6.2 (6.3) DV011,2 €m Assets Liabilities net Reinsurance 35 (34) 28 (27) 7 ERGO 81 (81) 74 (75) 7 Munich Re 116 (114) 102 (1
Slide 55: IFRS 17 vs. Solvency II
Additional information IFRS 17 vs. Solvency II FY 2022 Methodological bridge IFRS result vs. SII economic earnings SII/IFRS balance-sheet reconciliation (31.12.2022) €bn IAS 39/IFRS 17 Solvency II Eligible own funds 31.12.2022 46.0 5.3 –5.2 CSM (after tax) –18.0 1.3 –0.5 2.8 1.9 Other –0.8 Equity IF
Slide 56: Changes to shares in circulation
Additional information: Shareholder information Changes to shares in circulation Acquisition of Retirement of Weighted average number of shares in circulation 31.12. own shares in own shares in 31.3. Shares (millions) 2022 Q1 2023 Q1 2023 2023 (millions) Shares in 137.6 –1.2 – 136.5 140.3 140.1 139.
Slide 57: Financial calendar
Financial calendar 2023 Annual Report (Group), Quarterly Statement Quarterly Statement Annual Report (Company) as at 31 March 2023 as at 30 September 2023 16 MARCH 17 MAY 8 NOVEMBER 5 MAY 10 AUGUST Annual General Meeting Half-Year Financial Report 2023 as at 30 June 2023 Quarterly statement as at 31
Slide 58: For more information, please contact
For more 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 Email: tdzuba@munichre.com Email: cfranziszi@munichre.com Ema
Slide 59: 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