Munchener Ruckversicherungs-gesellschaft Ag · XETR:MUV2
Munchener Ruckversicherungs-gesellschaft — Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München — Q3 2021 Earnings Presentation
45 slides from Munchener Ruckversicherungs-gesellschaft's earnings presentation, Nov 9, 2021
Slide 1: Quarterly Statement as at 30 September 2021
Munich Re Group Quarterly Statement as at 30 September 2021 9 November 2021 Christoph Jurecka Quarterly statement as at 30 September 2021 9 November 2021 1
Slide 2: Agenda
Quarterly Statement as at 30 September 2021 Agenda 01 Munich Re 02 ERGO 03 Reinsurance 04 Outlook 05 Additional information Quarterly Statement as at 30 September 2021 9 November 2021 2
Slide 3: Munich Re
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Slide 4: Resilient result as strong operating performance cushions nat cat losses in Q3
Munich Re – Financial highlights Q3 2021 Resilient result as strong operating performance cushions substantial nat cat losses in Q3 Munich Re Q3 2021 (9M 2021) Net result Technical result Investment result Net result €m €m €m 2,061 €366m (€2,061m) 5,308 5,731 1,079 Reinsurance: Solid net result of €
Slide 5: Accumulated COVID-19-related financial impact for 2020 and 9M 2021
Munich Re – COVID-19 Accumulated COVID-19-related financial impact for 2020 and 9M 2021 €m Q3 2021: Provisions increased by €171m Re- ~ +€0.5bn ~ +€0.2bn ~€4.1bn ▪ P-C: Small increase of €4m; 65% of the accumulated insurance ~€3.4bn Contingency 1,846 losses are IBNR, down from 68% as at Q2 2021 (pre
Slide 6: Capital position
Munich Re – Capitalisation Capital position Equity Capitalisation €m €bn Equity 31.12.2020 Change in Q3 15.1 15.6 29,994 15.0 Consolidated result 2,061 366 12.0 12.4 Changes 0.3 0.3 0.3 0.3 0.3 Dividend –1,373 0 3.8 5.0 5.1 4.0 5.0 Unrealised gains/losses –1,611 –349 Exchange rates 811 283 Share buy
Slide 7: Investment portfolio
Munich Re – Investments Investment portfolio Investment portfolio1 Portfolio management % ▪ Investments in corporate bonds and bank bonds Fixed-interest securities 55.0 (55.3) ▪ Ongoing expansion of infrastructure debt Loans 23.5 (25.6) ▪ Increase in equity exposure over the year, with Total slight
Slide 8: Investment result
Munich Re – Investments Investment result €m Q3 2021 Return1 9M 2021 Return1 9M 2020 Return1 Regular income 1,507 2.4% 4,580 2.4% 4,801 2.6% Write-ups/write-downs –168 –0.3% –416 –0.2% –1,832 –1.0% Disposal gains/losses 881 1.4% 2,491 1.3% 2,210 1.2% Derivatives2 61 0.1% –397 –0.2% 629 0.3% Other in
Slide 9: ERGO
ERGO
Slide 10: ERGO Life and Health Germany
ERGO ERGO Life and Health Germany Gross premiums written Major result drivers €m €m 9M 2021 9M 2020 Q3 2021 Q3 2020 9M 2020 6,718 Technical result 285 327 –42 96 281 –185 Foreign exchange 0 Non-technical result 16 –52 68 –14 –141 127 Divestments/investments 0 thereof investment result 2,764 2,45
Slide 11: ERGO Property-casualty Germany
ERGO ERGO Property-casualty Germany Gross premiums written Major result drivers €m €m 9M 2021 9M 2020 Q3 2021 Q3 2020 9M 2020 2,943 Technical result 156 237 –81 35 92 –57 Foreign exchange 0 Non-technical result 57 –34 90 15 –14 29 Divestments/investments 0 thereof investment result 184 122 62 44
Slide 12: ERGO Property-casualty Germany
ERGO ERGO Property-casualty Germany Combined ratio Gross premiums written in 9M 2021 (9M 2020) % €m ◼ Loss ratio ◼ Expense ratio 2019 92.3 60.3 32.0 2020 92.4 61.9 30.5 Total €3,150m 9M 2021 94.1 64.6 29.6 (€2,943m) Q3 2021 95.6 67.1 28.5 95.6 Motor 630 (617) Legal protection 321 (316) 93.4 94.2 93.
Slide 13: ERGO International
ERGO ERGO International Gross premiums written Major result drivers €m €m 9M 2021 9M 2020 Q3 2021 Q3 2020 9M 2020 3,584 Technical result 205 189 16 76 78 –2 Foreign exchange –33 Non-technical result –7 20 –28 –17 1 –18 Divestments/investments –2 thereof investment result 254 260 –6 86 81 6 Organ
Slide 14: ERGO International
ERGO ERGO International Combined ratio Gross written premiums in 9M 2021 (9M 2020) % €m 94.8 95.2 93.0 93.8 Property-casualty 2,203 (1,985) 91.8 92.5 92.2 92.3 Total 90.1 €3,839m Life 455 (470) (€3,584m) Health 1,180 (1,129) Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2019 2019 2020 2020 2020 2020 2021 2021 2021 9M
Slide 15: Reinsurance
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Slide 16: Reinsurance life and health
Reinsurance Reinsurance life and health Gross premiums written Major result drivers €m €m 9M 2021 9M 2020 Q3 2021 Q3 2020 9M 2020 9,538 Technical result –41 31 –72 –46 10 –56 Foreign exchange –167 Non-technical result 276 207 69 97 110 –13 Divestments/investments 0 thereof investment result 621
Slide 17: Property-casualty reinsurance
Reinsurance Property-casualty reinsurance Gross premiums written Major result drivers €m €m 9M 2021 9M 2020 Q3 2021 Q3 2020 9M 2020 18,479 Technical result 474 –182 656 –636 –399 –237 Foreign exchange –822 Non-technical result 1,135 762 373 597 334 263 Divestments/investments 0 thereof investmen
Slide 18: Property-casualty reinsurance
Reinsurance Property-casualty reinsurance Combined ratio % ◼ Basic loss ratio ◼ Major loss ratio ◼ Expense ratio 2019 100.2 51.4 15.2 33.6 2020 105.6 53.9 20.8 30.9 111.6 112.2 112.8 9M 2021 100.9 53.5 17.6 29.8 106.0 104.2 Q3 2021 112.8 52.5 29.6 30.7 98.9 103.9 99.9 90.1 Major Reserve Normalised l
Slide 19: Climate change and accumulation of major losses
Reinsurance Climate change and accumulation of major losses Frequently discussed topics in the capital markets 01 What’s the impact of climate change on the insurance industry? 02 Is frequency/severity of non-peak cat events underestimated? 03 To what extent does climate change increase the magnitud
Slide 20: Global warming – insurance industry must be prepared for extremes
Reinsurance Global warming – Insurance industry must be prepared to cope with increasing likelihood of extremes 01 Small increase in average temperature, large impact on extremes ▪ Climate change results in increasing probability Historical climate of extreme temperatures (tail risks) … Probability
Slide 21: Munich Re continually revises and updates its nat cat models
Reinsurance Munich Re continually revises and updates its nat cat models – Non-peak-risk scenarios are an integral part 02 Non-peak-risk scenarios Peak-risk scenarios Top exposures – AggVaR1 €bn Higher 8 Driving exposure 6 management and Impact (PML) Probabilistic economic capitalisation 4 Less risk
Slide 22: Peak-risk scenarios – Example
Reinsurance Peak-risk scenarios – Example Flooding risks 03 Munich Re loss distribution for “Flood Germany” Munich Re’s response Gross loss (€bn) 2.0 2,0 ▪ Flood Germany is one of Munich Re’s well-modelled peak-risk scenarios that is regularly updated – July 2021 flood event in line with an expected
Slide 23: Non-peak-risk scenarios – Example
Reinsurance Non-peak-risk scenarios – Example Wildfire risks 03 Weather and wildfires in California May–Oct. anomalies relative to 1981–2010 Munich Re’s response ▪ Investment in resources to deepen understanding of wildfire risks, leading to further improvements in the internal wildfire model ▪ Rest
Slide 24: Nat cat claims remain largely random in any single year
Reinsurance Despite ongoing climate change, frequency/severity of nat cat claims remains largely random in any single year 04 Munich Re major nat cat losses % of NEP Major drivers of annual nat cat losses 29.4 22.0 20 ▪ Munich Re’s share in affected region ▪ Randomness of events 16 ▪ Concentration o
Slide 25: Random fluctuation is normal – keeps nat cat expectation under review
Reinsurance Random fluctuation is normal – keeps nat cat expectation under ongoing review, can be changed if necessary 04 Expected major nat cat loss ratio of ~8% unchanged since 2016 Based on probabilistic bottom-up analysis considering ▪ Current portfolio structure Expected major ▪ Peril-specific
Slide 26: Strong capitalisation lets Munich Re manage cat-driven volatility
Reinsurance Due to its strong capitalisation, Munich Re can manage cat-driven short-term accounting volatility 05 Impact on Munich Re’s … ▪ Not concerned about P&L volatility as we receive Increasing climate-related risks compensation for this risk IFRS are driving demand – in the long ▪ Making use
Slide 27: Outlook
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Slide 28: Outlook 2021
Outlook 2021 Group Gross premiums written Net result Return on investment ~ €58bn ~ €2.8bn >2.5% ERGO Combined ratio Gross premiums written Net result P-C Germany International ~ €18bn ~ €0.5bn ~ 92%1 ~ 93% Reinsurance Combined ratio Technical result, incl. fee Gross premiums written Net result P-C
Slide 29: Additional information
Additional information
Slide 30: Segment income statement Q3 2021
Additional information: Group finance and risk Segment income statement Q3 2021 €m Reinsurance Reinsurance ERGO ERGO ERGO Total L/H1 P-C L/H Germany P-C Germany International Q3 2021 Gross premiums written 3,164 7,997 2,268 809 1,242 15,480 Net earned premiums 2,900 6,665 2,269 942 1,191 13,967 Inco
Slide 31: Segment income statement 9M 2021
Additional information: Group finance and risk Segment income statement 9M 2021 €m Reinsurance Reinsurance ERGO ERGO ERGO Total L/H1 P-C L/H Germany P-C Germany International 9M 2021 Gross premiums written 9,365 21,483 6,837 3,150 3,839 44,673 Net earned premiums 8,502 18,746 6,801 2,779 3,538 40,36
Slide 32: Actual vs. analysts' consensus
Additional information: Group finance and risk Actual vs. analysts’ consensus Operating result – Actual vs. analysts’ consensus 1 KPIs – Actual vs. analysts’ consensus 1 €m €m Q3 2021 Consensus Delta Q3 2021 Consensus Impact2 Property-casualty reinsurance –39 –141 102 Combined ratio 112.8% 108.9% –2
Slide 33: Premium development
Additional information: Group finance and risk Premium development Gross premiums written Segmental breakdown €m €m 9M 2020 41,261 Foreign Total –1,023 exchange €44.7bn Divestments/ investments –2 Reinsurance Property-casualty 21,483 (48%)( 16.3%) Organic change 4,437 Reinsurance Life and Health 9,
Slide 34: Development of combined ratio
Additional information: Reinsurance Development of combined ratio Combined ratio vs. basic losses % Combined ratio Basic loss ratio 105.1 103.9 111.6 106.0 112.2 104.2 112.8 97.3 99.9 98.9 86.9 90.1 50.4 54.8 50.1 54.7 54.7 54.1 55.6 51.4 54.4 53.7 52.5 46.4 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q
Slide 35: Return on investment by asset class and segment
Additional information: Group finance and risk – Investments Return on investment by asset class and segment 9M 2021 %1 Regular Write-ups/ Disposal Extraord. Other ᴓ Market income -downs result derivatives result inc./exp. RoI value (€m) Afs fixed-income 1.8 0.0 0.9 – – 2.7 136,632 Afs non-fixed-inc
Slide 36: Investment result – Reinsurance
Additional information: Investments Investment result – Reinsurance Life and health reinsurance €m Q3 2021 Return1 9M 2021 Return1 9M 2020 Return1 Regular income 177 2.4% 517 2.3% 572 2.6% Write-ups/write-downs –1 0.0% –5 0.0% –18 –0.1% Disposal gains/losses 49 0.7% 156 0.7% 130 0.6% Derivatives2 4
Slide 37: Investment result – ERGO
Additional information: Investments Investment result – ERGO Life and Health Germany €m Q3 2021 Return1 9M 2021 Return1 9M 2020 Return1 Regular income 795 2.5% 2,540 2.7% 2,587 2.7% Write-ups/write-downs –116 –0.4% –228 –0.2% –1,426 –1.5% Disposal gains/losses 324 1.0% 1,205 1.3% 1,280 1.3% Derivati
Slide 38: Investment result – ERGO International
Additional information: Investments Investment result – ERGO International €m Q3 2021 Return1 9M 2021 Return1 9M 2020 Return1 Regular income 58 1.2% 205 1.4% 259 1.8% Write-ups/write-downs –1 0.0% 16 0.1% –25 –0.2% Disposal gains/losses 39 0.8% 90 0.6% 28 0.2% Derivatives2 –5 –0.1% –42 –0.3% 17 0.1%
Slide 39: Sensitivities to interest rates, spreads and equities
Additional information: Investments Sensitivities to interest rates, spreads and equities1 Sensitivity to risk-free interest in €bn (change in basis points) –50bps –25bps +50bps +100bps Change in market value, gross +9.0 +4.4 –8.1 –15.4 Change in on-balance-sheet reserves, net +2.5 +1.2 –2.3 –4.4 Ch
Slide 40: On- and off-balance-sheet reserves
Additional information: Investments On- and off-balance-sheet reserves €m 31.12. 31.3. 30.6. 30.9. 2020 2021 2021 2021 in Q3 Market value of investments 252,789 248,707 250,597 252,883 2,286 Total reserves 37,269 30,397 31,135 29,930 –1,205 On-balance-sheet reserves Fixed-interest securities 14,42
Slide 41: On- and off-balance-sheet reserves
Additional information: Investments On- and off-balance-sheet reserves €m On-balance-sheet reserves Off-balance-sheet reserves 1 Total reserves (gross) 13,715 16,215 Provision for deferred premium refunds –5,407 –8,458 Deferred tax –1,869 –2,227 Minority interests –10 – Consolidation and currency ef
Slide 42: 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 30.9. Shares (millions) 2020 9M 2021 9M 2021 2021 (millions) Shares in 140.1 – – 140.1 143.6 140.3 140.1 1
Slide 43: Financial calendar
Financial calendar 2021/2022 Munich Re Annual Report (Group), ESG Webinar Annual Report (Company) Quarterly Statement Quarterly Statement as at 31 March 2022 as at 30 September 2022 8 DECEMBER 17 March 10 MAY 8 NOVEMBER 9 NOVEMBER 23 FEBRUARY 28 APRIL 9 AUGUST Quarterly Statement Annual General Meet
Slide 44: 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 45: 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