Munchener Ruckversicherungs-gesellschaft Ag · XETR:MUV2
Munchener Ruckversicherungs-gesellschaft — Munich Re — Investor Presentation (May 2016)
94 slides from Munchener Ruckversicherungs-gesellschaft's investor presentation, May 2016
Slide 1: Strong track record – and new ideas
Source: Shutterstock [M] Strong track record – and new ideas Munich Re equity story May 2016 Munich Re – May 2016 1
Slide 2: Agenda
Agenda Equity story 3 Backup Group 20 Reinsurance 48 ERGO 63 Munich Health 76 Investments 79 Munich Re – May 2016 2
Slide 3: Munich Re – Key metrics
Equity story Munich Re – Key metrics Key financial data1 €bn Key share data1 2015 2014 2013 2015 2014 2013 Shareholders’ equity 31.0 30.3 26.2 Earnings per share (€) 18.7 18.3 18.5 Operating result 4.8 4.0 4.4 Dividend per share (€) 8.25 7.75 7.25 Net result 3.1 3.2 3.3 Book value per share (€) 188.
Slide 4: Realising synergies and economies of scope by combining primary and reinsurance
Equity story Realising synergies and economies of scope by combining primary and reinsurance under one roof Segmental breakdown – Gross written premium 2015 €bn Reinsurance Property-casualty ERGO Life/Health Germany 17.7 (35%) 9.4 (19%) ERGO Property-casualty Germany 3.2 (6%) Total €50.4bn ERGO Inte
Slide 5: Under-promise/over-deliver – Strong balance sheet continues to support sound earnings
Equity story Under-promise/over-deliver – Strong balance sheet continues to support sound earnings Delivering on promised net result €bn Earnings outlook 2016 Guidance Actual 3.2 3.3 3.2 3.1 Strong balance sheet 3.0 3.0 2.5–3.0 2.4 2.4 2.5 2.3–2.8 2.0 Challenging reinsurance 0.7 and capital markets
Slide 6: Strong capital position according to all metrics …
Equity story Strong capital position according to all metrics … Solvency II % IFRS €bn German GAAP/Rating €bn 302 30.3 31.0 9.1 9.8 277 7.7 242 26.2 1 2013 2014 2015 2013 2014 2015 2013 2014 2015 Solvency II ratio well above Strong shareholders’ equity Strengthened equalisation provision target capi
Slide 7: … facilitates financial flexibility, including high shareholder distribution
Equity story … facilitates financial flexibility, including high shareholder distribution Attractive shareholder participation1 €bn Sound capitalisation 2.7 according to 2.4 all metrics 2.3 Medium 175% 1.6 Share 1.5 buy-back 1.1 Low High 140% 220% Quality Sub- Internal Above of capital optimal model
Slide 8: Short-term earnings pressure mitigated by strong balance sheet
Equity story Short-term earnings pressure mitigated by strong balance sheet Investment result €bn P-C reinsurance – Release of loss reserves1 % Ongoing Lower Strong Reinsurance disposal gains reinvestment yields reserving position cycle Net disposal gains Unrealised gains 31 7.2 26 22 5.8 15 11 5.3
Slide 9: Value generation – Prudency reflected in lower cost of capital
Equity story Value generation – Prudency reflected in lower cost of capital Return on equity % Risk/return profile1 % 16 Total shareholder return (p.a.) Value generation 20 14 Peer 3 12 15 10.0 10 10 8 Average cost of capital Peer 2 Peer 4 Peer 5 6 5 Peer 6 Index 4 0 2 Peer 1 0 –5 2005 2007 2009 201
Slide 10: Changing risks – Munich Re actively shaping the transformation of the (re-)insurance industry
Equity story Changing risks – Munich Re actively shaping the transformation of the (re-)insurance industry Munich Re’s Underwriting New ILLUSTRATIVE strong footprint know-how and facilitates Solutions for expert network expansion to emerging risks key to developing Emerging attractive growth mar
Slide 11: Underinsurance in emerging markets provides business opportunities
Equity story Underinsurance in emerging markets provides business opportunities Young and growing population1 Insurance penetration still low2 Insured share of nat cat losses3 % bn Insurance penetration (%) North 9.7 6 America 43 8.5 Australia 38 7.4 4 Europe 28 South America 10 2 Asia 8 Africa 5 0
Slide 12: Integrated business model and infrastructure is facilitating swift adaption
Equity story Integrated business model and infrastructure is facilitating swift adaption to a changing environment Munich Re provides solutions along the entire value chain … New Adapting to Efficient Exploiting potential New Predictive and clients and changing and digital for digital processes – ri
Slide 13: Reinsurance – Portfolio mix on the move
Equity story Reinsurance – Portfolio mix on the move Property-casualty – GWP1 €bn Life – GWP1 €bn Risk CAGR 18.0 Strategic CAGR 16.6 10.5 Solutions initiatives 1.9 +15% 5.0 +57% 4.7 Traditional Traditional 5.3 book –2% business 14.7 13.0 model +2% 5.8 5.1 2008 2015 2008 2015 As a leading Tier-1 rein
Slide 14: Reinsurance P-C – Portfolio profitability protected by disciplined underwriting
Equity story Reinsurance P-C – Portfolio profitability protected by disciplined underwriting and consistent cycle management Traditional P-C portfolio 2015 (2014) – Gross premiums written1 % Portfolio shifts Aviation Casualty motor Proportional Facultative Share increases 1 (1) 27 (26) 72 (70) 9 (10
Slide 15: Risk Solutions – Track record of solid result delivery is confirmed
Equity story Risk Solutions – Track record of solid result delivery is confirmed Gross earned premiums1 €bn Combined ratio1 % Underwriting result1 €bn Share in % of Share in % of total P-C book 5.0 94.1 total P-C book 42 4.2 90.8 90.3 32 3.8 4.0 89.6 88.6 3.4 3.4 26 25 2.9 0.7 87.9 28 0.5 0.5 0.5 24
Slide 16: Reinsurance Life – Core business supplemented by well-established initiatives
Equity story Reinsurance Life – Core business supplemented by well-established initiatives Risk-return profile Traditional business model Portfolio dominated by mortality risk – Higher ILLUSTRATIVE FinMoRe focus on improving risk-assessment process for insurer and reinsurer Asia Asset Growing ex
Slide 17: ERGO – Becoming a significant earnings contributor for Munich Re (Group)
Equity story ERGO – Becoming a significant earnings contributor for Munich Re (Group) Challenges Strength Disappointing earnings development Internationally diversified client base Insufficient success story Multiple product lines Weakness in traditional life business Strong digital foot
Slide 18: Munich Health – Business measures show first signs of stabilisation
Equity story Munich Health – Business measures show first signs of stabilisation Organisation Markets/clients Innovation/digitalisation Enhanced organisational Growth initiatives for South- Digital health target picture structures implemented East Asia and Middle East Development and Impro
Slide 19: Strong track record – and new ideas
Equity story Strong track record – and new ideas Strong Successfully dealing with challenging economic conditions – We remain a strong partner track record for clients and reliable for shareholders, delivering on our promises Business Focus on insurance risks safeguarding sustainable value creation
Slide 20: Backup
Backup Munich RE = Munich Re — May 2016 20
Slide 21: Key financials – Our aim is sustained profitable growth
Backup: Group – Key financials Key financials – Our aim is sustained profitable growth Munich Re 2015 2014 2013 2012 2011 Gross written premiums €bn 50.4 48.8 51.1 52.0 49.5 Operating result €m 4,819 4,027 4,398 5,349 1,180 Taxes on income €m –476 312 –108 –878 552 Consolidated result €m 3,122 3,171
Slide 22: IFRS capital position
Backup: Group – Key financials IFRS capital position Equity €m UNREALISED GAINS/LOSSES Equity 31.12.2014 30,289 Change Q4 Fixed-interest securities Q1–4: –€1,726m Consolidated result 3,122 731 Q4: –€498m Changes Non-fixed-interest securities Dividend –1,293 0 Q1–4: –€10m Unrealised gains/losses –1,8
Slide 23: Distributable earnings of parent company – Main drivers
Backup: Group – German GAAP (HGB) Distributable earnings of parent company – Main drivers HGB result financing capital repatriation €bn HGB result – Main drivers 2015 vs. 2014 €bn 2.6 0.2 3.3 1.3 –0.9 2.9 –1.3 0.2 2.6 2.0 –1.0 Distributable Dividend Share HGB result Others 1 Distributable HGB result
Slide 24: Solid German GAAP (HGB) earnings
Backup: Group – German GAAP (HGB) Solid German GAAP (HGB) earnings Reconciliation of IFRS (Group) to HGB result (MR AG) €bn Equalisation provision €bn Maximum requirement ILLUSTRATIVE 9.8 0.3 –0.4 9.1 3.1 –0.4 7.7 2.6 6.6 IFRS Difference between Other Change of HGB 2012 2013 2014 2015 2016e 2017e re
Slide 25: Strong Solvency II capital generation supports financial flexibility
Backup: Group – Economic key financials Strong Solvency II capital generation supports financial flexibility SII capital generation 2015 (including change in SCR) €bn EOF/SCR change 5.3 0.3 –0.3 5.3 3.0 –2.3 normalised 2.6 – – 2.6 0.3 Economic Change in Other1 SII capital Capital SII capital earning
Slide 26: Change in eligible own funds
Backup: Group – Economic key financials Change in eligible own funds Change in SII eligible own funds €bn EOF 31.12.2014 38.2 Opening Retrospective adjustments of own funds not adjustments –0.3 qualifying as changes of reporting period EOF Opening balance for determination of overall 01.01.2015 38.0
Slide 27: Profit and loss attribution provides consistent reporting of economic performance
Backup: Group – Economic key financials Profit and loss attribution provides consistent reporting of economic performance across business units Munich Re (Group) 2015 ERGO ERGO RI RI Life/Health P-C ERGO Munich Munich Re €bn Life P-C Germany Germany Intl. Health (Group) Operating economic earnings 1
Slide 28: Proactive risk management builds up resilience
Backup: Group – Risk management Proactive risk management builds up resilience in an unpredictable and unstable environment Current environment Risk management measures stabilise SII ratio Political Diversified investment portfolio Dampening risks High volatility Group-wide trigger system for of
Slide 29: Breakdown of Solvency Capital Requirement by risk category
Backup: Group – Risk management Breakdown of Solvency Capital Requirement (SCR) by 1 risk category for Munich Re according to internal model Solvency capital requirement – Breakdown by risk category and segment €bn Risk category Group RI ERGO MH 2 2014 2015 Delta 2015 2015 2015 Remarks Prop.-Casualt
Slide 30: Risk-bearing capacity allows high exposure for peak scenarios
Backup: Group – Risk management – Property-casualty risks Risk-bearing capacity allows high exposure for peak scenarios, but only at adequate price levels Nat cat exposure (net of retrocession) – AggVaR1 €bn SCR property-casualty €bn 4 6.3 Top 5 exposures 5.7 1 Atlantic Hurricane 2 Storm Europe 3 3
Slide 31: Further improvement in Munich Re’s Solvency II ratio
Backup: Group – Risk management Further improvement in Munich Re’s Solvency II ratio SII ratio €bn Remarks Fully consolidated approach appropriately 277% 302% covers risk situation of Munich Re (Group) 1 No application of optional transitionals, LTG or 2014 2015 other measures in solo entities a
Slide 32: Further improvement of Solvency II capitalisation ratio
Backup: Group – Risk management Further improvement of Solvency II capitalisation ratio Munich Re actions SII ratio % >220% Above target capitalisation 302% Capital repatriation Increased risk-taking Holding excess capital to meet external constraints Transition into SII metric 175% – 220% Tar
Slide 33: Sensitivities of SII ratio
Backup: Group – Risk management Sensitivities of SII ratio SII ratio – Sensitivity % Assumptions Ratio as at 31.12.15 302 Use of full consolidated accounts for Munich Re (Group) Interest rate +50bps1 313 No consideration of optional long- Interest rate –50bps1 290 term-guarantee measures, e.g. S
Slide 34: Solvency II ratio – Munich Re’s sensitivities reflect full economic impact
Backup: Group – Solvency II Solvency II ratio – Munich Re’s sensitivities reflect full economic impact Application of optional SII measures – Impact on SII ratio and sensitivities Reduction of … Use of dynamic volatility No credit risk for EEA Application of D&A method adjustment government bonds fo
Slide 35: Actual versus expected comparison – Loss-monitoring
Backup: Group – Reserves Actual versus expected comparison – Loss-monitoring yields consistent picture across years Reinsurance group – Comparison of incremental expected losses with actual reported losses1 €m By exposure year By line of business 10,000 10,000 Actual reported loss Actual reported lo
Slide 36: Positive run-off result without weakening resilience
Backup: Group – Reserves Positive run-off result without weakening resilience against future volatility Ultimate losses1 (adjusted to exchange rates as at 31.12.2015) €m Ultimate reduction Accident year (AY) Prior-year releases of €1.5bn Date ≤2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 T
Slide 37: Insurance financial strength ratings providing for strong competitive position
Backup: Group – Rating Insurance financial strength ratings1 providing for strong competitive position A.M. Best Fitch Moody's Standard & Poor's A++ Berkshire2 AAA Aaa AAA Berkshire/Gen Re AA+ Berkshire/Gen Re Aa1 Berkshire/Gen Re AA+ Berkshire/Gen Re neg A+ Allianz AA Aa2 Allianz Germany AA Allianz
Slide 38: Munich Re (Group) – Outstanding bonds
Backup: Group – Outstanding bonds Munich Re (Group) – Outstanding bonds Subordinated bonds1 Nominal Coupon rate Emission/ Maturity First possible volume p. a. Issue redemption date €900m Until 2022 6.25%, thereafter variable 2012 2042 26 May 2022 £450m Until 2022 6.625%, thereafter variable 2012 204
Slide 39: ILS market platform complements our core business
Backup: Group – Risk trading ILS market platform complements our core business with alternative capacity and earnings potential Strategic scope of our ILS market activity Munich Re's view on ILS market benefits Munich Re's ILS related competencies Multi-year price stability Dedicated ILS team co
Slide 40: Outstanding cat bonds
Backup: Group – Risk trading Outstanding cat bonds Transaction Closing Maturity Volume Perils covered For Bosphorus 2 Re Ltd. 8/2015 8/2018 US$ 100m Earthquake Turkey Advantages clients Azzurro Re I Ltd. 6/2015 1/2019 €200m Italy Earthquake Generation of fee World Bank CCRIF 6/2014 6/2017 US$ 30m Ca
Slide 41: Munich Re's maximum in-force nat cat protection
Backup: Group – Risk trading Munich Re's maximum in-force nat cat protection Munich Re's maximum in-force nat cat protection as at January 2016 €m 1,400 Cat bonds Risk swaps 1,200 Sidecars Indemnity retro 2016 protection (total) 1,000 800 600 400 200 0 US windstorm US windstorm US earthquake EU wind
Slide 42: Five action fields in one group-wide corporate responsibility programme
Backup: Group – Corporate responsibility Five action fields in one group-wide corporate responsibility programme Enabling framework Core activities Enabling framework 1 2 3 4 5 Strategy and Corporate Environmental Corporate Reporting and governance responsibility in management citizenship communicat
Slide 43: Broad external recognition for Munich Re’s corporate responsibility performance
Backup: Group – Corporate responsibility Broad external recognition for Munich Re’s corporate responsibility performance Permanently listed since 2001 Permanently listed since 2001 The STOXX® Global ESG Leaders Index represents leading companies from an ESG point of view Munich Re has been included
Slide 44: Munich Re’s international cooperation – A strong commitment
Backup: Group – Corporate responsibility Munich Re’s international cooperation – A strong commitment towards corporate responsibility Examples UNEP FI Principles for Responsible Investment (PRI) (since 1999) (since 2006) Munich Re has signed the UNEP FI’s climate Munich Re has actively developed the
Slide 45: IFRS result driven by strong reinsurance contribution
Backup: Group – Financial highlights 2015 IFRS result driven by strong reinsurance contribution Munich Re (Group) 2015 (Q4 2015) NET RESULT OPERATING RESULT INVESTMENT RESULT €3,122m (€731m) €4,819m (€1,427m) RoI of 3.2% (2.9%) Overall sound operating Benign major claims and Solid return – High disp
Slide 46: Net result
Backup: Group – Financial highlights 2015 Net result Net result €m 2015 2014 Total 3,122 3,170 1,076 Reinsurance 3,261 2,892 941 762 736 731 790 731 525 ERGO –227 169 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Munich Health 88 109 2014 2015 Technical result €m Investment result €m Other1 €m 4,014 8,002 7,536 –54 3,242
Slide 47: Reconciliation of operating to net result
Backup: Group – Financial highlights 2015 Reconciliation of operating to net result Reconciliation of operating result with net result €m 2015 Q4 Operating result 4,819 1,427 Other non-operating result –532 –8 Goodwill impairments –452 –452 Net finance costs –238 –60 Taxes –476 –175 Net result 3,122
Slide 48: Munich Re – The leading global reinsurer
Backup: Reinsurance Munich Re – The leading global reinsurer Ranking Company Country Net reinsurance premiums written 2014 (US$ m) 1 Swiss Re Switzerland 31,640 2 Munich Re Germany 31,181 3 Berkshire Hathaway Re USA 16,568 4 Hannover Re Germany 15,294 5 SCOR SE France 12,324 6 Lloyd’s UK 10,416 7 Re
Slide 49: Reinsurance – Overview
Backup: Reinsurance Reinsurance – Overview 2015 2014 2013 2012 2011 Gross written premiums €bn 28.2 26.8 27.8 28.2 26.0 Investments €bn 89.2 88.0 79.2 83.8 79.5 Net technical provisions €bn 65.4 63.5 60.5 61.1 62.7 Major losses (net) €m 1,046 1,162 1,689 1,799 5,048 Thereof natural catastrophes €m 1
Slide 50: Reinsurance Property-casualty – Key figures
Backup: Reinsurance Property-casualty Reinsurance Property-casualty – Key figures Net result €m 2,915 2,483 1,197 646 835 790 505 497 597 330 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2014 2015 Technical result €m Investment result €m Other1 €m 3,116 –341 2,392 –726 2,046 1,785 2014 2015 2014 2015 2014 2015
Slide 51: Reinsurance Property-casualty – Combined ratio
Backup: Reinsurance Property-casualty Reinsurance Property-casualty – Combined ratio Combined ratio % Basic losses Major losses Expense ratio Normalised 2013 92.1 51.3 10.4 30.4 2014 92.7 53.0 7.2 32.5 2015 89.7 50.8 6.2 32.6 ~98.7 Q4 2015 78.6 36.8 4.7 37.1 ~98.4 Combined ratio % Major losses % Nat
Slide 52: January renewals – Business up for renewal makes up more than half of total
Backup: Reinsurance Property-casualty – January renewals 2016 January renewals – Business up for renewal makes up more than half of total P-C book, focus on Europe Total property-casualty book1 % Regional allocation of renewable portfolio % Remaining Business up for Europe 94 6 business January rene
Slide 53: Attractive business opportunities overcompensate for premium decline
Backup: Reinsurance Property-casualty – January renewals 2016 Attractive business opportunities overcompensate for premium decline due to consistent cycle management January renewals 2016 % 100 –10.8 89.2 –1.3 12.8 100.7 €m 9,138 –982 8,156 –123 1,171 9,204 Change in premium +0.7% Thereof price move
Slide 54: Renewal results
Backup: Reinsurance Property-casualty – January renewals 2016 Renewal results Year-to-date price change 2010–2016 % Nominal Adjusted for interest-rate changes 2.4 1.4 1.0 0.5 0.3 0.2 0.0 –0.1 –1.0 –1.0 –1.7 –1.6 –1.9 –2.4 1 2010 2011 2012 2013 2014 2015 2016 1 January renewals. Munich Re – May 2016
Slide 55: Reinsurance Life – Key figures
Backup: Reinsurance Life Reinsurance Life – Key figures Net result €m 409 345 174 122 124 129 71 52 49 34 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2014 2015 Technical result €m Investment result €m Other1 €m 335 898 –50 811 279 –155 2014 2015 2014 2015 2014 2015 1 Other non-operating result, goodwill impai
Slide 56: Solid IFRS performance notwithstanding random large claims
Backup: Reinsurance Life Solid IFRS performance notwithstanding random large claims Gross premiums written €m Main effects 2015 11,130 10,829 10,536 Positive currency effects 9,481 10,040 Largely flat development of traditional business 2011 2012 2013 2014 2015 Technical result €m 420 Adjusted
Slide 57: Benefit from growth opportunities and closing open issues
Backup: Reinsurance Life Benefit from growth opportunities and closing open issues Canada UK Asia Pressure on volumes Continued pressure on volumes/margins in Very satisfactory and margins increased protection business development of significantly in 2015 – Successful proposition for financi
Slide 58: Financially Motivated Reinsurance – Well-established value proposition
Backup: Reinsurance Life Financially Motivated Reinsurance – Well-established value proposition, strong demand prevails Financially Motivated Reinsurance €m Gross premiums written Technical result and fee income VNB1 % of total Fee income % of total 214 4,536 Technical result 136 185 4,109 % of tota
Slide 59: Asia – Sustained growth across all major markets
Backup: Reinsurance Life Asia – Sustained growth across all major markets Asia €m Gross premiums written Technical result and fee income VNB1 % of total Fee income % of total Technical result 198 1,178 % of total 86 959 910 9 872 871 62 59 55 4 5 97 93 81 35 56 26 21 21 10 11 19 17 8 9 9 15 14 9 12
Slide 60: Longevity – Book developed carefully in line with risk appetite
Backup: Reinsurance Life Longevity – Book developed carefully in line with risk appetite Longevity €m Gross premiums written Liabilities by deals Strategic proposition % of total Longevity considered to be 2,788 primarily a risk management tool 381 to balance mortality portfolio and to stabilise e
Slide 61: Asset protection – Comprehensive solutions to complex financial risks
Backup: Reinsurance Life Asset protection – Comprehensive solutions to complex financial risks Asset protection IFRS contribution margin1 €m Strategic proposition Legal, regulatory and structuring expertise 37 Fully functional hedging platform 30 30 26 Product portfolio Solutions to Basel III
Slide 62: New business profitability
Backup: Reinsurance Life New business profitability RoRaC spread1 % IRR spread1 % Payback period2 years 20% 20% 20 15% 15% 15 10% 10% 10 5% 5% 5 0% 0% 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Very good new business New business profitability Increased share
Slide 63: ERGO – Overview
Backup: ERGO ERGO – Overview 2015 2014 2013 2012 2011 Gross written premiums €bn 16.5 16.7 16.7 17.1 17.4 Investments €bn 131.0 135.5 126.7 124.9 117.0 Net technical provisions €bn 130.3 132.4 125.1 122.8 116.1 Combined ratio p-c Germany % 97.9 95.3 96.7 98.0 95.5 Combined ratio p-c International %
Slide 64: ERGO Life/Health Germany – Key figures
Backup: ERGO Life/Health Germany– Key figures ERGO Life/Health Germany – Key figures Net result €m 269 73 130 27 39 51 54 28 –329 –462 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2014 2015 Technical result €m Investment result €m Other1 €m 4,453 225 3,841 383 144 –640 2014 2015 2014 2015 2014 2015 1 Other non
Slide 65: New business: Shift to less interest-rate-sensitive products
Backup: ERGO Life Germany New business: Shift to less interest-rate-sensitive products and closing of traditional products Target portfolio1 – New business APE % Shift new business to target portfolio Target portfolio (incl. new life product) Target portfolio Thereof new life product Unit-linked i
Slide 66: ERGO Life – New business (statutory premiums)
Backup: ERGO Life – New business ERGO Life – New business (statutory premiums) Germany (including direct business) 2015 2014 Δ abs. Δ% Total new business 986 1,215 –229 –18.9 Regular premiums 218 236 –18 –7.6 Single premiums 768 979 –211 –21.6 Annual premium equivalent (APE)1 295 334 –39 –11.8 Inter
Slide 67: Declined reinvestment yield still with low impact on average yield …
Backup: ERGO Life Germany Declined reinvestment yield still with low impact on average yield … Average yield vs. average guarantee Key figures1 – Life Germany % 4% Reinvestment Average Average ILLUSTRATIVE yield yield guarantee 3% 2015 ~1.8 ~3.4 ~2.7 2014 ~2.6 ~3.6 ~3.0 2% avg. yield avg. guarantee
Slide 68: … while measures to support guarantees have financial impact in 2015
Backup: ERGO Life Germany … while measures to support guarantees have financial impact in 2015 ZZR reference rate – Projection1 % ZZR – Low interest-rate reserve Guarantee level ILLUSTRATIVE Local GAAP reserve against low interest rates 4.25 4.10 Expected accumulated ZZR in 2016: ~€3.5bn 4.00 4.
Slide 69: ERGO Property-casualty Germany – Key figures
Backup: ERGO Property-casualty Germany ERGO Property-casualty Germany – Key figures Net result €m 214 176 150 68 58 31 37 46 19 –19 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2014 2015 Technical result €m Investment result €m Other1 €m –4 214 204 –128 187 122 2014 2015 2014 2015 2015 2015 1 Other non-operati
Slide 70: ERGO Property-casualty Germany
Backup: ERGO Property-casualty Germany ERGO Property-casualty Germany Combined ratio % Gross premiums written €m Other Personal accident 336 (11%) 654 (21%) 103.9 101.3 Legal TOTAL Motor 98.1 97.1 protection €3,162m 663 (21%) 95.4 95.3 395 (12%) 95.7 95.4 96.1 94.0 Liability Fire/Property 93.5 93.4
Slide 71: ERGO Property-casualty Germany
Backup: ERGO Property-casualty Germany ERGO Property-casualty Germany Personal accident Motor GWP €m Combined ratio % GWP €m Combined ratio % 81.2 687 672 654 649 666 663 77.2 110.1 109.4 106.3 75.3 2013 2014 2015 2013 2014 2015 2013 2014 2015 2013 2014 2015 Fire/Property Liability GWP €m Combined r
Slide 72: ERGO International – Key figures
Backup: ERGO International ERGO International – Key figures Net result €m 58 48 26 14 11 15 –112 –163 –276 –396 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2014 2015 Technical result €m Investment result €m Other1 €m 662 447 –181 136 –554 33 2014 2015 2014 2015 2014 2015 1 Other non-operating result, goodwill
Slide 73: ERGO International property-casualty
Backup: ERGO International property-casualty ERGO International property-casualty Combined ratio % Gross premiums written €m Other Poland 115.3 366 (15%) 884 (37%) Legal TOTAL protection €2,392m 99.2 100.4 100.0 97.5 98.7 706 (30%) 104.1 100.4 98.097.2 96.8 Greece Turkey 94.9 140 (6%) 296 (12%) Q1 Q
Slide 74: ERGO International property-casualty
Backup: ERGO International property-casualty ERGO International property-casualty Poland Turkey GWP1 €m Combined ratio % GWP1 €m Combined ratio % Non-motor % Non-motor % Motor % 102.4 Motor % 154.9 873 884 96.0 97.7 816 296 225 232 47 43 47 36 43 42 108.5 53 57 53 58 64 58 108.4 2013 2014 2015 2013
Slide 75: International life – Focus on new product strategies and in-force management
Backup: ERGO International life International life – Focus on new product strategies and in-force management Total premiums €m New business – Promoting capital-light products Belgium 2,028 1,991 New product strategy with focus on capital-light products under development 1,678 474 457 Austria Int
Slide 76: Munich Health – Overview
Backup: Munich Health Munich Health – Overview 2015 2014 2013 2012 2011 Gross written premiums €bn 5.6 5.3 6.6 6.7 6.0 Investments €bn 4.1 3.9 3.6 4.2 4.6 Net technical provisions €bn 2.8 2.5 2.2 2.2 2.4 Combined ratio3 % 99.9 98.8 98.3 100.2 99.5 Regional premium breakdown % Segmental premium break
Slide 77: Munich Health – Key figures
Backup: Munich Health Munich Health – Key figures Net result €m 109 88 53 46 20 22 23 15 14 5 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2014 2015 Technical result €m Investment result €m Other1 €m 118 87 9 77 –9 24 2014 2015 2014 2015 2014 2015 1 Other non-operating result, goodwill impairments, net finance
Slide 78: Private health insurance growing worldwide above GDP
Backup: Munich Health Private health insurance growing worldwide above GDP, with digitalisation becoming an increasing driver Growth drivers Demographic Medical Life style Economic Digitalisation/ development progress changes development innovation + Image: used under license from Shutterstock.com I
Slide 79: Investment result
Backup: Investments Investment result Investment result €m 2015 Return1 2014 Return1 Q4 2015 Return1 Q3 2015 Return1 Regular income 7,370 3.1% 7,203 3.2% 1,782 3.1% 1,725 2.9% Write-ups/write-downs –754 –0.3% –234 –0.1% –101 –0.2% –413 –0.7% Disposal gains/losses 2,693 1.1% 2,629 1.2% 372 0.6% 514 0
Slide 80: Return on investment by asset class and segment
Backup: Investments Return on investment by asset class and segment %1 Regular Write-ups/ Disposal Extraord. Other ᴓ Market income -downs result derivative result inc./exp. RoI value (€m) Afs fixed-income 2.7 0.0 1.1 0.0 0.0 3.7 131,920 Afs non-fixed-income 4.2 –3.3 6.9 0.0 0.0 7.8 14,676 Derivative
Slide 81: Investment portfolio
Backup: Investments Investment portfolio Investment portfolio1 % Portfolio management in Q4 Land and buildings Fixed-interest Purchase of government bonds in the US, 2.9 (2.4) securities Spain and emerging markets 55.7 (55.5) Shares, equity funds and Sale of French and Spanish covered participat
Slide 82: Investment portfolio – Fixed-interest securities and miscellaneous
Backup: Investments Investment portfolio Fixed-interest securities and miscellaneous Investment portfolio % Fixed-interest securities1 % Miscellaneous Fixed-interest securities Structured products Governments/ 7.5 (7.7) 55.7 (55.5) 4 (5) semi-government 62 (59) Corporates 16 (15) TOTAL Banks TOTAL €
Slide 83: Fixed-income portfolio – Total
Backup: Investments Fixed-income portfolio Total Rating structure % Regional breakdown % NR1 <BB AAA Without With Total 6 (6) 0 (0) 42 (42) policyholder 31.12. 31.12. participation 2015 2014 BB 2 (2) Germany 4.6 24.6 29.2 30.3 TOTAL US 14.9 1.5 16.4 14.0 BBB €202.9bn France 2.1 5.2 7.3 7.6 12 (12) U
Slide 84: Fixed-income portfolio – Government/Semi-government
Backup: Investments Fixed-income portfolio Government/Semi-government Rating structure % Regional breakdown % BB AAA Without With Total 2 (1) 46 (46) policyholder 31.12. 31.12. <BB 0 (0) participation 2015 2014 BBB 10 (11) Germany 4.2 23.2 27.4 29.6 TOTAL US 17.9 1.0 18.9 15.6 A €105.7bn Supra- 8 (7
Slide 85: Fixed-income portfolio – Corporate bonds (excluding bank bonds)
Backup: Investments Fixed-income portfolio Corporate bonds (excluding bank bonds) Rating structure % Sector breakdown % <NR AAA 31.12. 31.12. 1 (0) 1 (1) 2015 2014 Utilities 21.1 22.3 <BB 2 (2) TOTAL AA Industrial goods and services 12.7 12.1 7 (6) BB €20.5bn Oil and gas 10.9 12.2 11 (11) Telecommun
Slide 86: Fixed-income portfolio – Bank bonds
Backup: Investments Fixed-income portfolio Bank bonds Rating structure % Regional breakdown % NR AAA Total 2 (2) 0 (1) Senior Sub- Loss- 31.12. 31.12. bonds ordinated bearing 2015 2014 US 29.3 7.2 0.3 36.7 29.0 <BB Germany 18.7 2.5 3.2 24.3 29.2 2 (3) AA UK 6.4 2.0 0.3 8.7 12.0 TOTAL 8 (8) Ireland 5
Slide 87: On- and off-balance-sheet reserves (gross)
Backup: Investments On- and off-balance-sheet reserves (gross) €m 31.12. 31.12. 31.12. 30.9. 31.12. 2012 2013 2014 2015 2015 Market value of investments 218,047 210,431 235,849 235,372 230,529 Total reserves 22,478 15,192 31,470 26,839 25,969 On-balance-sheet reserves Fixed-interest securities 9,980
Slide 88: On-balance-sheet reserves
Backup: Investments On-balance-sheet reserves On-balance-sheet reserves €m 31.12. Change 2015 Q4 Investments afs 10,332 –557 Valuation at equity 91 –2 Unconsolidated affiliated enterprises 81 –23 Cash-flow hedging 29 –2 Total on-balance-sheet reserves (gross) 10,533 –584 Provision for deferred premi
Slide 89: Off-balance-sheet reserves
Backup: Investments Off-balance-sheet reserves Off-balance-sheet reserves €m 31.12. Change 2015 Q4 Real estate1 2,273 205 Loans and investments (held to maturity) 12,610 –622 Associates 553 131 Total off-balance-sheet reserves (gross) 15,436 –286 as if Provision for deferred premium refunds –11,121
Slide 90: 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) +8.2 +4.0 –7.9 –15.4 Change in on-balance-sheet reserves, net (€bn)1 +1.9 +0.9 –1.8 –3.4 Change in off-balance-sh
Slide 91: Mission of Investor & Rating Agency Relations
Backup: Additional information Mission of Investor & Rating Agency Relations Responsibility Main objective Munich Re’s communication with the capital Active communication to support a fair capital- market / financial community market valuation of Munich Re shares and outstanding bonds External commu
Slide 92: Financial calendar
Backup: Additional information Financial calendar 2016 10 May Quarterly statement as at 31 March 20161 9 August Half-year financial report as at 30 June 2016 9 November Quarterly statement as at 30 September 20161 1 Munich Re is adjusting its financial reporting format following an amendment to the
Slide 93: For information, please contact
Backup: Additional 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 94: Disclaimer
Backup: Additional information 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