Munich Re Conference Call July 10, Münchener Rück Munich Re Group

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Ilene Atkinson
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1 Munich Re Conference Call July 10, 2002 Münchener Rück Munich Re Group

2 Agenda Klicken Sie, um das Titelformat zu bearbeiten 2 WTC ISSUE AMERICAN RE RESERVE ISSUE Results of Reserve Review Key Drivers of Reserve Adjustments Rehabilitation Measures Taken Outlook

3 Revised Klicken Sie, WTC um Claims das Titelformat Estimationzu bearbeiten 3 Increase by 500 million US Dollars to 2.6 billion US Dollars

4 Reasons Klicken Sie, for Increased um das Titelformat Claims Estimation zu bearbeiten 4 Onsite audits of major cedants. Increased provisions for the next phase of WTC loss. Major claims in general liability and business interruption.

5 Agenda Klicken Sie, um das Titelformat zu bearbeiten 5 WTC ISSUE AMERICAN RE RESERVE ISSUE Results of Reserve Review Key Drivers of Reserve Adjustments Rehabilitation Measures Taken Outlook

6 American Klicken Sie, Re s um Reserve das Titelformat Strengthening zu bearbeiten in American Re added US Dollars 2 billion in 2Q02 Accident years mainly U.S. casualty lines A&E, latent liabilities

7 Reserves Klicken Sie, um das Titelformat zu bearbeiten 7 American Re has been adjusting reserve levels in the years 1999, 2000 and Reporting lag inherent in casualty business in the US. Reserve development driven by increased frequency and severity trends. Deterioration of recent accident year losses in professional, auto and general liability as well as in workers compensation and property. In addition, reserve increases prudently made for A&E bringing survival ratio up to 11.

8 Am-Re s Klicken Sie, Survival um das Ratio Titelformat Before and zu bearbeiten After Reserve Strengthening 8 Asbestos before after Environmental before after Asbestos and Environmental before after

9 Agenda Klicken Sie, um das Titelformat zu bearbeiten 9 WTC ISSUE AMERICAN RE RESERVE ISSUE Results of Reserve Review Key Drivers of Reserve Adjustments Rehabilitation Measures Taken Outlook

10 Key Klicken Drivers Sie, of um Reserve das Titelformat Adjustments zu bearbeiten 10 Soft market. Market over- capitalisation. Negative impact on pricing caused by bull markets of the 90s Accelerating adverse claims trends. Reserve shortfalls influenced by reporting lag for casualty business. American Re, like most others, affected by these trends.

11 Agenda Klicken Sie, um das Titelformat zu bearbeiten 11 WTC ISSUE AMERICAN RE RESERVE ISSUE Results of Reserve Review Key Drivers of Reserve Adjustments Rehabilitation Measures Taken Outlook

12 Rehabilitation Klicken Sie, um Measures das Titelformat Taken zu bearbeiten 12 Transfer of American Re s International book to Munich Re. Implementation of new management and structure. Decisive measures to reduce operating expenses by US Dollars 50 million p.a. Tighter underwriting controls, unified marketing, enhanced cycle management strategy and business segmentation processes. Corporate risk management and upgraded results monitoring processes.

13 New Klicken Management Sie, um das Control Titelformat American zu bearbeiten Re 13 John Phelan appointed Chairman and CEO of American Re in March John Phelan appointed member of Munich Re s Board of Management on April 1, Improved integration of American Re into Munich Re, including shared focus on Value-based management and other group-wide projects, Combined Ratio and ROE targets.

14 Agenda Klicken Sie, um das Titelformat zu bearbeiten 14 WTC ISSUE AMERICAN RE RESERVE ISSUE Results of Reserve Review Key Drivers of Reserve Adjustments Rehabilitation Measures Taken Outlook

15 Outlook Klicken Sie, um das Titelformat zu bearbeiten 15 Improved corporate underwriting, unified marketing, corporate risk management, results monitoring processes, cycle management and business segmentation will enable new management to recognise trends early and take immediate action. Return to profitability in 2002 (excluding reserve strengthening). American Re is today a vastly different company from just four months ago. American Re is well positioned to benefit from its franchise and market presence.

The Munich Re Group American Re Reserve Review Outcome. Telephone conference for analysts and investors. Nikolaus von Bomhard Jörg Schneider

The Munich Re Group American Re Reserve Review Outcome. Telephone conference for analysts and investors. Nikolaus von Bomhard Jörg Schneider Reserve Review Outcome Telephone conference for analysts and investors Nikolaus von Bomhard Jörg Schneider 19 July 25 Put an end to the uncertainty in 's reserves reserve strengthening by US$ 1.6bn ( 1.3bn),