Munchener Ruckversicherungs-gesellschaft Ag · XETR:MUV2
Munchener Ruckversicherungs-gesellschaft — Munich Re — ESG Presentation (December 2021)
57 slides from Munchener Ruckversicherungs-gesellschaft's sustainability presentation, Dec 8, 2021
Slide 1: ESG webinar for analysts and investors
Munich Re ESG webinar for analysts and investors 8 December 2021 ESG webinar for analysts and investors 8 December 2021 1
Slide 2: Agenda
ESG webinar for analysts and investors Agenda 01 Strategic 04 Innovative risk transfer – framework operating examples Michael Menhart Michael Schrempp 02 ESG at 05 ESG Munich Re Group at ERGO Silke Jolowicz Stephan Thoenissen 03 Climate change 06 ESG mitigation and adaptation in investments Ernst Ra
Slide 3: Strategic framework
= m Strategic framework ii ’ a | y i pore . i
Slide 4: Munich Re taking a leading position in ESG
Strategic framework Munich Re taking a leading position in ESG Environmental Climate leadership with concrete roadmap to reduce carbon emissions and enable new solutions for energy transition Holistically Social Responsible employer – attracting, integrating developing and retaining outstanding staf
Slide 5: New structures at Board and Management level
Strategic framework New structures at Board and Management level Governance ESG Committee and ESG Management Team Audit Committee Standing Committee Supervisory Board Monitoring ESG risks Regularly addresses sustainability-related issues ESG Committee ESG Management Team ▪ Group CEO1 ▪ Chief Investm
Slide 6: A strong commitment towards corporate responsibility
Strategic framework A strong commitment towards corporate responsibility Munich Re’s international cooperations UNEP FI Principles for (since 1999) Responsible Investment (PRI) (since 2006) Munich Re has signed the UNEP FI’s climate declaration and was a founding member of the PRI and PSI. Munich Re
Slide 7: Munich Re Group Ambition 2025
Strategic framework Munich Re Group Ambition 2025 Sustainability is a core element of the strategy of Munich Re and ERGO Expansion of core Scale Preference for organic growth Succeed Leverage superior underwriting Shareholders Growing earnings and RoE Uplift asset performance Clients Long-term partn
Slide 8: ESG at Munich Re Group
ESG at Munich Re Group
Slide 9: Sustainability approach based on shared value
ESG at Munich Re Group Sustainability approach based on shared value Group Ambition 2025 connecting corporate responsibility (CR) and business Munich Re aims to create value for all its stakeholders – We take up society’s our CR strategy integrates this ambition across all our activities challenges
Slide 10: Creating value through global responsibility
ESG at Munich Re Group Creating value through global responsibility Holistically integrating ESG across our organisation Environmental Social Governance Ambitious decarbonisation targets Diverse workforce ESG criteria in BoM remuneration ▪ Climate targets for our (re)insurance ▪ 40% managers to be f
Slide 11: Spotlight on insurance and investment
ESG at Munich Re Group Spotlight on insurance and investment Translating ESG into action ESG aspects, sensitive issues, Munich Re position and measures Environmental Sensitive issues ▪ Pollution Munich Re position and measures ESG tool for underwriting ▪ Natural resources and biodiversity Banned wea
Slide 12: Spotlight on Board of Management
ESG at Munich Re Group Spotlight on Board of Management Governance ESG criteria incorporated into variable remuneration Overall performance assessment for annual and multi-year bonus – Adjustment of target achievement based on ESG criteria (+/- 10 pp) Ecological aspects Reduction of the CO2 footprin
Slide 13: Spotlight on employees
ESG at Munich Re Group Spotlight on employees Social Attractive employer with social impact Main Diversity Employee engagement Development and focus areas and inclusion and well-being talent management Share of women in … Health and training Award-winning employer in 2020 ▪ Management, worldwide: 35
Slide 14: Spotlight on climate
ESG at Munich Re Group Spotlight on climate Environment Lead through climate action Article 2 – 1.(a) of the Paris Climate Agreement “Holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C a
Slide 15: Munich Re Group Climate Ambition 2025 and beyond
ESG at Munich Re Group Munich Re Group Climate Ambition 2025 and beyond Leveraging our role as investor, underwriter and audible public voice ASSETS LIABILITIES OWN OPERATIONS Comprehensive Climate risk management on both, assets and liabilities ▪ Improving operational emissions climate risk ▪ Physi
Slide 16: Climate proof points
ESG at Munich Re Group Climate proof points For insurance and investment activities Enabling solutions Our climate ambition for ▪ Risk transfer solutions for renewables (>40Mt of CO2 liabilities and investments emissions avoided for construction project1 and >80Mt CO2 annual emissions avoided during
Slide 17: Climate change mitigation and adaptation
Climate change mitigation and adaptation
Slide 18: Natural catastrophe risk management: Core business at Munich Re
Climate change mitigation and adaptation Natural catastrophe risk management: Core business at Munich Re Research on human-induced climate change since the early 1970s 1973 First publication on climate change Climate change … ▪ … is real and predominantly the result of human activity ▪ … has a major
Slide 19: Climate-related action 2021: Main market drivers
Climate change mitigation and adaptation Climate-related action 2021: Main market drivers Awareness and expectations push the climate agenda: Policy and regulation most relevant Climate risks Policy and regulation Increasing awareness of risk and Net-zero targets, disclosure requirements, stress tes
Slide 20: Effect of global warming: changing probability distributions
Climate change mitigation and adaptation Effect of global warming: changing probability distributions Small increase in average temperatures → large increase in probability of extremes Increase of global average temperatures Probability Historical climate Warmer climate increase of probabilities of
Slide 21: UN (political) targets: COP21 (Paris 2015) well below 2°C
Climate change mitigation and adaptation UN (political) targets: COP21 (Paris 2015) “well below 2°C” Ambition (Glasgow 2021): COP26 “accelerating emissions reductions” ▪ Recognition of 195 UN nations to limit global warming to well below 2°C ▪ Targeting 1.5°C ▪ Finalising the rules of the Paris Agre
Slide 22: Munich Re at COP26 in Glasgow
Climate change mitigation and adaptation Munich Re at COP26 in Glasgow Private sector is, like policymakers, urged to take action to limit global warming to 1.5°C Outcome of COP26 Munich Re’s media and implications for conference at COP26 the insurance industry sends clear messages © Munich Re ▪ Res
Slide 23: Paris 1.5/2° limit needs massive GHG emission reductions
Climate change mitigation and adaptation Paris 1.5/2° limit needs massive GHG emission reductions Depending on emission pathways, negative emissions could become relevant Potential scenarios of global anthropogenic CO2 emissions until 2100 Annual global CO2 (Gt CO2/yr) LED Scenario 1 Scenario 2 Scen
Slide 24: Climate change: Munich Re's strategic elements
Climate change mitigation and adaptation Climate change: Munich Re’s strategic elements Disabling and focus on enabling/business development Know-how and data sharing (SaaS) Partnerships and ENABLING cooperations (PPPs) Products and services (Green tech/ Liabilities: parametic solutions) Underwritin
Slide 25: Disabling: CO2 emissions reduction
Climate change mitigation and adaptation “Disabling”: CO2 emissions reduction In business operations and on both sides of the balance sheet ASSETS LIABILITIES OWN CO2 EMISSIONS Financed CO2 emissions Insures CO2 emissions (primary, direct, fac.) From operational processes No investment in No insuran
Slide 26: Enabling: Munich Re risk transfer solutions
Climate change mitigation and adaptation “Enabling”: Munich Re risk transfer solutions Accelerating commercialisation and improving bankability of new/innovative technologies Risk transfer of technology and performance risks up to 25 years Uniqueness ▪ High technical expertise with all renewable tec
Slide 27: Enabling: Munich Re cooperations and memberships
Climate change mitigation and adaptation “Enabling”: Munich Re cooperations and memberships Sharing our know-how with partners and society ▪ Access to external experts/knowledge of cooperation partners ▪ Higher impact due to stronger presence and access to new markets ESG webinar for analysts and in
Slide 28: Enabling: Example Software-as-a-Service
Climate change mitigation and adaptation “Enabling”: Example Software-as-a-Service Sharing know-how and data with innovative software solutions (risk intelligence platform) Munich Re’s tool analyses how assets may be impacted by physical climate risks, based on scientific scenarios under different C
Slide 29: Munich Re risk assessment via climate change edition: sea level
Climate change mitigation and adaptation Munich Re risk assessment via climate change edition Example: Sea level – current situation i Hazard zones derived from IPCC sea-level rise data and high-resolution elevation data for respective projection year and RCP scenario. Model is based on storm surge
Slide 30: Munich Re risk assessment: sea level rise, high emission scenario
Climate change mitigation and adaptation Munich Re risk assessment via climate change edition Example: Sea level rise – high emission scenario (RCP 8.5), year 2100 i RCP 8.5 is the most severe scenario leading to a warming at the end of the 21st century of probably more than 4°C relative to the pre-
Slide 31: Uninsured share of nat cat losses around 60% in 2020
Climate change mitigation and adaptation Uninsured share of nat cat losses around 60% in 2020 Low-income countries suffer most from nat cat events, but insurance density still very low Global insurance gap for natural catastrophes remains large – Examples Worldwide Insured losses in US$ bn Uninsured
Slide 32: Enabling: Growing Munich Re's nat cat portfolio profitable
Climate change mitigation and adaptation „Enabling“: Growing Munich Re’s nat cat portfolio profitable Managing risks proactively/engaging in resilience-building projects Climate change shifts frequency and/or intensity of severe weather events Population density/value concentration/etc. increase exp
Slide 33: Enabling: Parametric solutions and public-private partnership
Climate change mitigation and adaptation “Enabling”: Parametric solutions and public-private partnership Improving insurability in high-risk areas and reducing the insurance gap Public-private partnership (PPP) solutions Parametric trigger solutions PPPs combine the skills and resources of both the
Slide 34: Innovative risk transfer – operating examples
Innovative risk transfer – operating examples
Slide 35: Expansion of clean energy is key to reducing CO2 emissions
Innovative risk transfer – operating examples Expansion of clean energy is key to reducing CO2 emissions Key economies are expected to be running … in particular driven by expansion of solar, on at least 50% clean energy by 2050 … wind and hydropower Energy generation of renewables (share of total)
Slide 36: Munich Re provides solutions to enable the energy transition
Innovative risk transfer – operating examples Munich Re provides solutions to enable the energy transition by structuring risk transfer products for its partners Risk embedded in Munich Re new technologies solution Diminishing performance Long-term performance over time, e.g. of solar panels protect
Slide 37: Innovative risk solutions support our clients in expanding their business
Innovative risk transfer – operating examples Based on financial strength and know-how, innovative risk solutions support our clients in expanding their business Munich Re’s holistic expertise and risk assessment assures product quality and improves investment security Higher attractiveness to inves
Slide 38: Green Tech Solutions (GTS)
Innovative risk transfer – operating examples Green Tech Solutions (GTS) Established player in the field of renewable energies and energy efficiency 1. CSP 1. Wind offshore 1. Energy storage LD cover EPC cover performance cover 2011 2016 2019 1. Photovoltaic 1. PV project 1. Circular economy Hydroge
Slide 39: Focusing on technology and performance risk
Innovative risk transfer – operating examples Focusing on technology and performance risk, based on internal and external expertise Enabled over US$ bn 40 World-class partnerships with capital in green technologies industry associations, research and with performance risk transfer certification inst
Slide 40: Providing various coverages for the photovoltaic industry
Innovative risk transfer – operating examples Providing various coverages for different stakeholders in the photovoltaic industry Solar park performance cover Top-up cover Investment protection Sponsor Bank Additional warranty protection ▪ Backstop of PV module warranty in ▪ Additional insolvency pr
Slide 41: ESG at ERGO
ESG at ERGO
Slide 42: ESG at ERGO
ESG at ERGO ESG at ERGO Support of Munich Re Group Climate Ambition 2025 and beyond vv ERGO’s contribution to achieving climate targets of Ambition 2025 ▪ Full exit from thermal coal by 2040 and net-zero carbon emissions from ERGO investment portfolio by 2050 ▪ Active exposure management ensuring de
Slide 43: Liabilities at ERGO
ESG at ERGO Liabilities at ERGO Engaging across segments Sustainable insurance solutions following general principles Promote sustainable investments Environmental objectives of EU Taxonomy enriched by … Life … Sustainable Development Goals also considering societal challenges 1 Climate change mitig
Slide 44: Liabilities at ERGO
ESG at ERGO Liabilities at ERGO Aiming to go beyond exclusions Driving stronger integration of sustainability aspects into core business Product development Inclusion of ESG criteria in product development (e.g. sustainable investment concept, nat cat coverage, sustainable mobility, health preventio
Slide 45: Environmental dimension
ESG at ERGO – operating examples Environmental dimension Environment Transition to low-carbon technology and natural hazard risk protection Risk embedded ERGO solution (exemplary) Motor insurance including dedicated coverages for Alternative driving concepts e-vehicles and hybrids – e.g. Germany ERG
Slide 46: Social dimension
ESG at ERGO – operating examples Social dimension Social First indications on products with social added-values Risk embedded ERGO solution (exemplary) Preventive healthcare and Supplementary dental insurance including preventive financial reimbursement care measures – e.g. Spain and Germany ERGO ai
Slide 47: ESG in investments
Munich RE == ESG in investments He
Slide 48: Climate strategy for investments
ESG in investments Climate strategy for investments Transition of investment portfolio to net-zero greenhouse gas emissions by 2050 Assets Financed CO2 emissions Asset class targets No investment in companies with We aim to reduce the financed emissions >30% revenue from thermal coal of our listed e
Slide 49: ESG investment strategy
ESG in investments ESG investment strategy Close alignment with our commitments Principle Set targets for asset classes, sectors, Approach engagement and financing transition Integration of ESG indices, best-in-class, criteria for All investments which impact environment and Focus climate, starting
Slide 50: Reducing our CO2 asset footprint until 2025
ESG in investments Reducing our CO2 asset footprint until 2025 Reduction targets until 2025 First AOA reporting of CO2 emissions Other Oil and gas For equities, corporates and real Coal estate: –25% to –29% Sector target: –25% for oil and gas (equities/corporates) Sector target: –35% for coal (equit
Slide 51: Integration of ESG strategy into investment processes
ESG in investments Integration of ESG strategy into investment processes First achievements Group-wide implementation project First reduction step in working on instruments coal sector ▪ Alternative benchmarks ▪ In line with climate strategy and full thermal coal exit by 2040 – first reduction ▪ Gui
Slide 52: Engagement
ESG in investments Engagement Achieving real-world impact Collaborative engagement Reporting of engagement driven by MEAG activities set up ▪ Munich Re and MEAG joined ▪ One-page overview developed in order to Climate Action 100+ track engagement activities ▪ Participation at roundtables with top ▪
Slide 53: Expansion of renewable portfolio
ESG in investments Expansion of renewable portfolio Doubling to €3bn by 2025 Development of investments in renewables – market value Newly invested projects Newly committed €3bn ▪ Equity: Solar (USA) Debt Equity ▪ Debt: Solar (Spain) ▪ Debt: Wind (Germany) €1.6bn Newly committed projects ▪ Debt: Sol
Slide 54: Green bond 2020 proceeds have been fully allocated
ESG in investments Green bond 2020 proceeds have been fully allocated Munich Re committed €1.3bn to eight sustainable projects Eligible projects contribute to UN Sustainable Development Goals Eco-efficient and/or Environmentally sustainable management circular economy of living natural resources and
Slide 55: Key takeaways and Q&A
Munich Re Key takeaways and Q&A ESG webinar for analysts and investors
Slide 56: For information, please contact
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 Email: tdzuba@munichre.com Email: cfranziszi@munichre.com Email: c
Slide 57: 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