Munchener Ruckversicherungs-gesellschaft Ag · XETR:MUV2
Munchener Ruckversicherungs-gesellschaft — Munich Re — RVS Monte Carlo 2023
20 slides from Munchener Ruckversicherungs-gesellschaft's conference presentation, Sep 10, 2023
Slide 1: RVS Monte Carlo 2023
Image: hanohiki / stock.adobe.com RVS Monte Carlo 2023 Munich Re media conference 10 September 2023 Thomas Blunck, Stefan Golling
Slide 2: Agenda: Overall market environment
Agenda Overall market environment Market drivers Non-peak perils Alternative risk transfer Thomas Blunck RVS Monte Carlo 2023 10 September 2023 2
Slide 3: (Re)insurance markets are exposed more than ever to uncertain conditions
(Re)insurance markets are exposed more than ever to uncertain conditions and influencing factors De-globalisation and Geopolitical decarbonisation uncertainties General Prevailing inflation expectations market Fragile GDP outlook environment Legal developments Local/regional trends and social inflat
Slide 4: Continued fragility in the global economy
Continued fragility in the global economy Elevated uncertainties – only weak growth, downside risks dominate Annual real GDP growth Baseline scenario with in % only weak growth 8 Headwinds from tight monetary policy limit 7 activity in interest-rate-sensitive sectors 6 Robust labour markets prev
Slide 5: Inflation will ease, but remain above recent historical averages
Inflation will ease, but remain above recent historical averages Major global trends could worsen inflation in the medium term CPI inflation, advanced economies Structural drivers for higher inflation in % 8 De-globalisation could lead to lower productivity Decarbonisation could increase energy
Slide 6: Losses from non-peak perils on the rise
Losses from non-peak perils on the rise Munich Re has recognised this upward trend and reflects it in cat modelling Losses from non-peak perils (severe thunderstorms, floods, wildfires) … … in the USA (in US$ bn) … in Europe (in €bn) 64.5 80 30 70 25 60 20 50 40 15 30 10 20 5 10 0 0 2004 2006 2008 2
Slide 7: Available traditional RI capacity is expected to recover
Available traditional RI capacity is expected to recover Some players are allocating capital more selectively Dedicated reinsurance capital Traditional RI capital (US$ bn) Trends 475 461 Traditional RI market 429 434 Reduction of reinsurance capital in 2022 driven by mix 394 23 of effects (real re
Slide 8: Alternative risk transfer remains complementary capacity
Alternative risk transfer remains complementary capacity But no major ART-driven market movements expected Alternative capital deployment Alternative risk transfer (“ART”) Limit in US$ bn capital has stagnated at around US$ 100bn since 2018 120 Cat Bond market currently characterised by high gro
Slide 9: Agenda: Focus on underwriting
Agenda Focus on underwriting Natural catastrophes Political risks Casualty Cyber Stefan Golling RVS Monte Carlo 2023 10 September 2023 9
Slide 10: 2022 continued a string of years with high nat cat losses
2022 continued a string of years with high nat cat losses Surpassing the US$ 100bn insured threshold seems to be the “new normal” Natural disasters caused high losses In 2022 of US$ 270bn – close to the average for the last five years 12% 2% 5% 7% 5% Overall losses Insured losses At approximately US
Slide 11: Munich Re's nat cat business shows profitable growth
Munich Re’s nat cat business shows profitable growth Ready to offer high capacity – but we need to know what we’re covering Munich Re nat cat loss ratio vs budget1 Munich Re RI nat cat GWP 2010–20222 in % points in €bn 5% 5 2021 4 2019 5-year average 3 0% 2018 2022 2 1 2020 -5% 0 50 100 150 2010 201
Slide 12: Political risks – Changing risk landscape
Political risks – Changing risk landscape Increase in frequency of civil unrest (SRCC) events Number of riots per decade worldwide 1950s to 2010s 350 Observations on increasing frequency 300 Growing inequalities between rich and poor – and between nations 250 Tendency towards populism, nationali
Slide 13: Social inflation/Legal system abuse – A growing phenomenon
Social inflation/Legal system abuse – A growing phenomenon Recent premium increases not sufficient to make up for higher loss costs “Nuclear Verdicts” (>US$ 10m) in the USA Sum of corporate nuclear verdicts: 2015–2022 (US$ bn) 20 18 16 14 12 10 Judges and Social Juries Sentiment 8 6 Plaintiff’s Legi
Slide 14: Digitalisation – Cyber insurance becoming increasingly relevant
Digitalisation – Cyber insurance becoming increasingly relevant Munich Re is committed to supporting and shaping the market Economic costs of cyber crime GWP of Munich Re’s cyber book Cyber reinsurer of the year expected to grow further in US$ bn 2017–2023 2.5 2.1 2.0 US$ 24tn 1.5 1.5 2027 1.0 0.9 U
Slide 15: Transparency, standardisation, accumulation control
Transparency, standardisation, accumulation control Indispensable aspects of a sustainable cyber insurance market Objectives Virus/Malware Global outbreak of widespread, Identifying worst-case untargeted and self-reproducing scenarios malware. PML quantification and accumulation control Data bre
Slide 16: Agenda: Summary: Munich Re's proposition
Agenda Summary: Munich Re’s proposition Thomas Blunck RVS Monte Carlo 2023 10 September 2023 16
Slide 17: A reliable partner in a fragile market environment
A reliable partner in a fragile market environment Leveraging Munich Re’s core capabilities and client focus Reliable capacity and partnership Investing for a sustainable future, e.g. We invest in individual and long-term High definition modelling to expand the partnerships with our clients nat
Slide 18: Q&A
Image: hanohiki / stock.adobe.com Q&A 10 September 2023 Thomas Blunck, Stefan Golling
Slide 19: Backup – Insurance industry outlook
Backup – Insurance industry outlook Following years of strong reinsurance growth and hardening markets, growth dynamics are likely to normalise P-C RI and PI real1 growth rates (CAGR) RI PI 20–22 23–25e 20–22 23–25e P-C RI ceded premiums 2022: Europe 1% 1-2% 0% 1% North America 7% 2-3% 3% 4% €352bn
Slide 20: Higher interest rate level will influence alternative capital markets
Higher interest rate level will influence alternative capital markets Creates good investment opportunities in traditional capital markets (bonds) Yield developments in liquid asset classes Relative attractiveness 9% of bond yields has 8% increased materially 7% Higher yields also support price