37 slides from Munchener Ruckversicherungs-gesellschaft's earnings presentation, Nov 9, 2017
Slide 1: Quarterly statement as at 30 September 2017
Image: Getty Images/fStop Quarterly statement as at 30 September 2017 9 November 2017 Jörg Schneider
Slide 2: Agenda
Agenda 2 1 Munich Re (Group) 5 Backup 19 7 2 ERGO 13 3 Reinsurance 17 4 Outlook Quarterly statement as at 30 September 2017 2
Slide 3: Munich Re (Group) – Financial highlights
Munich Re (Group) – Financial highlights Nat cats dominate Q3 – Capitalisation remains strong Munich Re (Group) Q3 2017 (9M 2017) Net result Technical result €m Investment result €m Net result €m –€1,436m (9M: –€146m) 2,290 5,942 5,629 2,095 Q3 loss driven by heavy nat cat 816 684 claims, recapture
Slide 4: Munich Re (Group) – Capitalisation
Munich Re (Group) – Capitalisation IFRS capital position Equity €m Capitalisation €bn Equity 31.12.2016 31,785 Change Q3 0.4 0.4 0.4 Consolidated result –146 –1,436 4.2 4.2 0.4 4.4 0.3 Changes 2.8 2.8 Dividend –1,333 0 Unrealised gains/losses –92 –94 Exchange rates –1,570 –501 Share buy-backs –743 –
Slide 5: Munich Re (Group) – Investment portfolio
Munich Re (Group) – Investment portfolio Investment portfolio Investment portfolio1 % Portfolio management in Q3 Land and buildings Fixed-interest securities Ongoing geographic diversification 3.3 (2.9) 55.3 (56.3) Increase in corporate bond exposure Miscellaneous2 6.4 (6.2) Slight decrease in
Slide 6: Munich Re (Group) – Investment result
Munich Re (Group) – Investment result Investment result Investment result (€m) Q2 2017 Return1 Q3 2017 Return1 9M 2017 Return1 9M 2016 Return1 Regular income 1,720 3.0% 1,527 2.7% 4,881 2.8% 5,001 2.8% Write-ups/write-downs –49 –0.1% –84 –0.1% –160 –0.1% –284 –0.2% Disposal gains/losses 432 0.7% 259
Slide 7: ERGO
ERGO Quarterly statement as at 30 September 2017 7
Slide 8: ERGO Life and Health Germany
ERGO ERGO Life and Health Germany Gross premiums written €m Major result drivers €m 9M 9M Technical result 9M 2016 6,823 2017 2016 9M: Enhanced profitability in life, health and Foreign exchange –9 Technical result 316 207 109 direct business 9M: Improvements in life driven by one-offs Divestm
Slide 9: ERGO Property-casualty Germany (1)
ERGO ERGO Property-casualty Germany (1) Gross premiums written €m Major result drivers €m 9M 9M Technical result 9M 2016 2,566 2017 2016 Q3: Combined ratio of 98.1% at level of Foreign exchange –6 Technical result 122 124 –1 annual guidance Loss ratio negatively impacted by nat cat Divestments
Slide 10: ERGO Property-casualty Germany (2)
ERGO ERGO Property-casualty Germany (2) Combined ratio % Gross premiums written €m Loss ratio Expense ratio Other Motor 2015 97.9 304 586 64.7 33.2 2016 97.0 61.9 35.1 9M 2017 96.6 63.3 33.2 Q3 2017 98.1 66.5 31.6 Legal protection TOTAL Personal accident 313 €2,619m 473 103.9 100.0 99.1 98.6 98.
Slide 11: ERGO International
ERGO ERGO International Gross premiums written €m Major result drivers €m 9M 9M Technical result 9M 2016 3,768 2017 2016 Q3: Good combined ratio of 91.5%, Foreign exchange –5 Technical result 121 14 107 pleasing technical improvements overall in claims as well as costs (e.g. Poland with Divestme
Slide 12: ERGO International – Property-casualty, including Health
ERGO ERGO International – Property-casualty, including Health Combined ratio1 % Gross premiums written €m Loss ratio Expense ratio Other Poland 788 920 2015 104.7 65.3 39.4 Turkey TOTAL Spain 2016 98.0 64.9 33.1 141 €3,123m 585 9M 2017 95.5 64.5 31.0 Greece Legal protection 185 504 Q3 2017 91.5
Slide 13: Reinsurance
Reinsurance Quarterly statement as at 30 September 2017 13
Slide 14: Reinsurance Life and Health
Reinsurance Reinsurance Life and Health Gross premiums written €m Major result drivers €m 9M 9M Technical result, incl. fee income of €271m 9M 2016 9,892 2017 2016 9M: Good underlying business Foreign exchange 7 Technical result 232 304 –72 development Divestments/investments 0 9M: Technical r
Slide 15: Reinsurance Property-casualty
Reinsurance Reinsurance Property-casualty Gross premiums written €m Major result drivers €m 9M 9M Technical result 9M 2016 13,733 2017 2016 Q3: High nat cat loss ratio of 70.3%, Foreign exchange 27 Technical result –1,381 1,642 –3,022 thereof impact from hurricanes Harvey, Irma and Maria, of €2.
Slide 16: Reinsurance – Combined ratio
Reinsurance Combined ratio Combined ratio % Basic losses Major losses Expense ratio 160.9 2015 89.7 50.8 6.2 32.6 2016 95.7 54.2 9.1 32.4 9M 2017 117.3 54.5 30.3 32.6 Q3 2017 160.9 54.1 75.0 31.8 101.9 Major Reserve Normalised 99.8 97.1 losses Nat cat Man-made releases1 combined ratio2 9M 2017
Slide 17: Outlook
Outlook Quarterly statement as at 30 September 2017 17
Slide 18: Outlook 2017
Outlook 2017 GROUP REINSURANCE ERGO Gross premiums written Gross premiums written Gross premiums written €48–50bn €31–33bn €17–17.5bn Net result L&H: Technical result Net result incl. fee income Small profit (prev. €2.0–2.4bn) ~€400m €200–250m Return on investment P-C combined ratio1 P-C combined ra
Slide 19: Backup
Backup Quarterly statement as at 30 September 2017 19
Slide 20: Premium development
Backup: Munich Re (Group) Premium development Gross premiums written €m Segmental breakdown €m Reinsurance ERGO 9M 2016 36,782 Property-casualty Life and Health Germany 13,524 (37%) ( –1.5%) 6,865 (19%) ( 0.6%) Foreign exchange 15 ERGO Divestments/ investments –84 Property-casualty Germany 2,619 (
Slide 21: Reconciliation of operating result with net result
Backup: Munich Re (Group) Reconciliation of operating result with net result Reconciliation of operating result with net result €m 9M 2017 Q3 2017 Operating result 377 –1,732 Other non-operating result –659 –243 Goodwill impairments –6 –6 Net finance costs –160 –53 Taxes 302 597 Net result –146 –1,4
Slide 22: Development of combined ratio
Backup: Reinsurance Development of combined ratio Combined ratio vs. basic losses % Combined ratio Basic loss ratio 160.9 91.2 92.3 93.3 94.5 88.4 99.8 92.5 101.9 97.1 93.9 78.6 46.4 54.9 57.6 54.1 54.0 56.2 55.3 51.1 55.1 54.4 54.1 36.8 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 201
Slide 23: Breakdown of regular income
Backup: Investments Breakdown of regular income Investment result – Regular income (€m) Q3 2017 9M 2017 9M 2016 Change Afs fixed-interest 725 2,224 2,427 –203 Afs non-fixed-interest 91 499 443 56 Derivatives 23 83 88 –5 Loans 485 1,451 1,515 –65 Real estate 112 311 302 10 Deposits retained on assume
Slide 24: Breakdown of write-ups/write-downs
Backup: Investments Breakdown of write-ups/write-downs Investment result – Write-ups/write-downs (€m) Q3 2017 9M 2017 9M 2016 Change Afs fixed-interest –1 –5 0 –5 Afs non-fixed-interest –37 –72 –296 224 Loans –1 1 –26 27 Real estate –49 –99 –55 –44 Deposits retained on assumed reinsurance and other
Slide 25: Breakdown of net result from disposals
Backup: Investments Breakdown of net result from disposals Investment result – Net result from disposal of investments (€m) Q3 2017 9M 2017 9M 2016 Change Afs fixed-interest 116 307 1,113 –806 Afs non-fixed-interest 142 702 334 368 Loans –1 720 507 214 Real estate 0 6 14 –8 Deposits retained on assu
Slide 26: Return on investment by asset class and segment
Backup: Investments Return on investment by asset class and segment 9M 2017 %1 Regular income Write-ups/-downs Disposal result Extraord. derivative result Other inc./exp. RoI ᴓ Market value (€m) Afs fixed-income 2.3 0.0 0.3 0.0 0.0 2.6 129,047 Afs non-fixed-income 4.1 –0.6 5.7 0.0 0.0 9.2 16,432 Der
Slide 27: Investment result by segment
Backup: Investments Investment result by segment Reinsurance Life and Health (€m) Q3 2017 Return1 9M 2017 Return1 9M 2016 Return1 Regular income 178 2.8% 579 2.9% 531 2.7% Write-ups/write-downs –4 –0.1% –10 –0.1% –17 –0.1% Disposal gains/losses 31 0.5% 125 0.6% 157 0.8% Derivatives2 19 0.3% 12 0.1%
Slide 28: Investment result by segment
Backup: Investments Investment result by segment ERGO Life and Health Germany (€m) Q3 2017 Return1 9M 2017 Return1 9M 2016 Return1 Regular income 838 2.8% 2,643 3.0% 2,724 3.0% Write-ups/write-downs –51 –0.2% –85 –0.1% –170 –0.2% Disposal gains/losses 95 0.3% 1,147 1.3% 844 0.9% Derivatives2,3 –38 –
Slide 29: Investment result by segment
Backup: Investments Investment result by segment ERGO International (€m) Q3 2017 Return1 9M 2017 Return1 9M 2016 Return1 Regular income 96 2.3% 300 2.4% 364 3.1% Write-ups/write-downs 3 0.1% –5 –0.0% 0 –0.0% Disposal gains/losses 6 0.1% 46 0.4% 81 0.7% Derivatives2 –9 –0.2% –56 –0.4% 13 0.1% Other i
Slide 30: 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) +8.1 +4.0 –7.5 –14.6 Change in on-balance-sheet reserves, net (€bn)1 +1.9 +0.9 –1.8 –3.4 Change in off-balance-sh
Slide 31: On- and off-balance-sheet reserves (gross)
Backup: Investments On- and off-balance-sheet reserves (gross) €m 31.12.2015 31.12.2016 31.3.2017 30.6.2017 30.9.2017 Market value of investments 230,529 236,153 235,399 229,737 229,149 Total reserves 25,969 28,496 26,180 24,743 24,565 On-balance-sheet reserves Fixed-interest securities 7,886 8,649
Slide 32: On-balance-sheet reserves
Backup: Investments On-balance-sheet reserves On-balance-sheet reserves €m 30.9.2017 Change Q3 Investments afs 10,506 –69 Valuation at equity 110 –1 Unconsolidated affiliated enterprises 65 5 Cash-flow hedging 22 1 Total on-balance-sheet reserves (gross) 10,702 –63 Provision for deferred premium ref
Slide 33: Off-balance-sheet reserves
Backup: Investments Off-balance-sheet reserves Off-balance-sheet reserves €m 30.9.2017 Change Q3 Real estate1 2,516 67 Loans 10,589 –172 Associates 758 –9 Total off-balance-sheet reserves (gross) 13,863 –114 Provision for deferred premium refunds –9,648 97 Deferred tax –1,275 –2 Minority interests 0
Slide 34: Changes to shares in circulation
Backup: Shareholder information Changes to shares in circulation Acquisition of Retirement of Shares 31.12. own shares in own shares in 30.9. Weighted average number (millions) 2016 9M 2017 9M 2017 2017 of shares in circulation (millions) Shares in 156.9 –4.2 – 152.7 172.2 165.9 circulation 160.0 15
Slide 35: Financial calendar
Backup: Shareholder information Financial calendar 2017 Investor Day 21 November “Munich Re driving digital transformation” 2018 6 February Preliminary key figures 2017 and renewals Balance sheet press conference for 2017 financial statements 15 March Analysts' conference in Munich with videocast 25
Slide 36: For information, please contact
Backup: Shareholder 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 37: 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