plainpicture/fstop/ralf Hiemisch Good start to 205 7 May 205 Jörg Schneider Torsten Oletzky Torsten Jeworrek
Agenda Munich Re (Group) 2 Munich Health 9 Business field ERGO 3 Reinsurance 9 Outlook 28 2
Munich Re (Group) Financial highlights Q 205 Good start to 205 Munich Re (Group) Q 205 NET RESULT 790m Good operating performance in core business supported by benign major losses in reinsurance SHAREHOLDERS' EQUITY 34.8bn (+4.7% vs. 3.2.) Sound capital position continuation of bn share buybacks until AGM 206 INVESTMENT RESULT RoI of 3.0% Solid return given low interest rates Economic ALM resulting in losses on derivatives, with usual portfolio turnover leading to disposal gains Reinsurance ERGO Munich Health NET RESULT 668m NET RESULT 99m NET RESULT 23m 597 7 37 5 23 P-C LIFE P-C GERMANY REINSURANCE Combined ratio 92.3% Major-loss ratio 6.2% Technical result of 03m in line with pro-rata annual guidance Combined ratio 98.% above-average major losses L/H GERMANY Pleasing result INTERNATIONAL Combined ratio 98.7% Combined ratio 00.8% PRIMARY INSURANCE Combined ratio 98.0% 3
Munich Re (Group) Financial highlights Q 205 Net result Net result 535 630,94 94 762 736 73 790 Q 205 Q 204 Total 790 94 Reinsurance 668 768 Q2 Q3 Q4 Q Q2 Q3 Q4 Q 203 204 205 ERGO 99 53 Munich Health 23 20 Technical result Investment result Other,27 92,992,820 386 205 Q 204 Q 205 Benign major losses in reinsurance Q 204:.0%, Q 205: 6.2% Q 204 Q 205 Solid performance given ongoing decline of interest rates Q 204 Q 205 Low tax rate (6.0%) and positive FX result ( 66m) Other non-operating result, goodwill impairments, net finance costs, taxes. 4
Munich Re (Group) Capitalisation IFRS capital position Equity Equity 3.2.204 30,289 Consolidated result 790 Changes Dividend Unrealised gains/losses 2,035 Exchange rates,857 Share buy-backs 279 Other 6 Equity 3.3.205 34,753 Capitalisation UNREALISED GAINS/LOSSES Fixed-interest securities,077m Non-fixed-interest securities 945m EXCHANGE RATES Positive FX contribution mainly driven by US$ bn 0.5 4.7 8.3% 7.5% 0.3 0.3 5.5 4.4 5.3% 0.3 4.4 23.3 27.4 26.2 30.3 34.8 Other debt includes bank borrowings of Munich Re and other strategic debt. 2 Strategic debt (senior, subordinated and other debt) divided by total capital (strategic debt + equity). 0.4 4.5 3.6% 2.3% 20 202 203 204 Q 205 Senior and other debt Subordinated debt Equity Debt leverage 2 (%) 5
Munich Re (Group) Investment portfolio Investment portfolio Investment portfolio Land and buildings 2.3 (2.4) Shares, equity funds and participating interests 2 5.7 (5.2) % Fixed-interest securities 55.8 (55.5) Portfolio management Overall increase in market values driven by FX and lower interest rates Ongoing reduction of German government bonds to further improve diversification Miscellaneous 3 7.7 (7.7) Loans 28.5 (29.2) TOTAL 25bn by cautiously increasing exposure in USA, Spain, Ireland and emerging markets Purchase of corporate bonds (esp. in USA) while reducing ABS/MBS Enlarged hedges keep equity quota stable at 4.2% Fair values as at 3.3.205 (3.2.204). 2 Net of hedges: 4.2% (4.3%). 3 Deposits retained on assumed reinsurance, deposits with banks, investment funds (excl. equities), derivatives and investments in renewable energies and gold. 6
Munich Re (Group) Investment result Investment result Investment result Q 205 Return % Q 204 Return % Regular income,80 3.0%,697 3.2% Write-ups/write-downs 5 0.2% 5 0.0% Disposal gains/losses 997.6% 57 0.9% Derivatives 2 706.2% 96 0.2% Other income/expenses 2 0.2% 0.2% Investment result,820 3.0%,992 3.7% Total return % 6.2% 0.8% 3-month reinvestment yield Q 205 2.0% Q4 204 2.% Q 204 2.5% Write-ups/ write-downs Fixed income Q 205 Q 204 97 0 Equities 3 9 Real estate 9 6 Other 4 20 Disposal gains/losses Q 205 Q 204 Fixed income 620 364 Equities 369 45 Other 8 8 Derivatives Q 205 Q 204 Fixed income 3 34 25 Equities 760 86 Commodities 68 7 Other 2 42 Annualised return on quarterly weighted investments (market values) in %. 2 Result from derivatives without regular income and other income/expenses. 3 Thereof interest-rate hedging ERGO: 209m/ 35m (gross/net). 7
Agenda Munich Re (Group) Munich Health Business field ERGO Reinsurance Outlook 8
Munich Health Premium development Munich Health Premium development Gross premiums written Segmental breakdown Q 204,50 Foreign-exchange effects 85 Reinsurance,073 (74%) ( 5.2%) Primary insurance 370 (26%) ( 0.3%) Divestments/investments Organic change 32 Q 205,443 Gross premiums written Regional breakdown % Q 204,50 Reinsurance 59 Asia and Australasia 2 (2) North America 53 (55) Primary insurance Q 205,443 Middle East/ Africa 0 (7) Europe 35 (36) DKV Luxembourg. 9
Munich Health Key figures Munich Health Key figures Net result 56 53 30 26 20 22 4 23 20 23 Q2 Q3 Q4 Q Q2 Q3 Q4 Q 203 204 205 Q Q 204 205 Technical result Investment result Other 39 4 6 Q 204 Q 205 20 Q 204 Q 205 5 Q 204 Q 205 Other non-operating result, goodwill impairments, net finance costs, taxes. 0
Munich Health Munich Health Highlights Q 205 vs. Q 204 Gross premiums 3.9% Technical result Organic change 32m: Reduced share of large-volume deals, partly compensated for by organic growth in Middle East Positive FX effects ( 85m), mainly CAD Overall combined ratio up slightly to 00.4% due to change in cost allocation for administrative expenses in reinsurance Reinsurance combined ratio: 00.8% (+.%) Primary insurance combined ratio: 98.0% (.4%) Investment result +95.0% Other Higher regular income (e.g. Daman) and disposal gains mainly driven by associated companies Low tax rate of 4.2% Other non-operating result, goodwill impairments, net finance costs, taxes.
Agenda Munich Re (Group) Munich Health Business field ERGO Reinsurance Outlook 2
Business field ERGO Premium development Slight growth mainly in international business Gross premiums written Segmental breakdown Q 204 4,565 Foreign-exchange effects 2 L/H Germany 2,42 (53%) ( 2.4%) P-C Germany,93 (26%) (.%) Divestments/investments 0 Organic change 8 Q 205 4,585 International 980 (2%) ( 7.2%) Gross premiums written Regional breakdown % Q 204 4,565 Life/Health Germany 59 Rest of world 22 (2) Germany 78 (79) Property-casualty Germany 3 International 66 Q 205 4,585 3
Business field ERGO Key figures Nat cat losses and lower investment result net result lower in Q 205 Net result 47 94 54 53 52 99 53 99 247 Q2 Q3 Q4 Q Q2 Q3 Q4 Q 203 204 205 Q Q 204 205 Technical result Investment result Other,397,22 33 6 257 57 Q 204 Q 205 Q 204 Q 205 Q 204 Q 205 Other non-operating result, goodwill impairments, net finance costs, taxes. 4
Business field ERGO Property-casualty Germany Combined ratio affected by storm Niklas and large losses in commercial/industrial business Combined ratio 94.0 95.7 0.3 95.4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Expense ratio Loss ratio 95.4 95.3 93.5 97. 98. 96.7 95.3 98. 32.7 32.2 34.2 % Gross premiums written Other 03 Legal protection 5 Personal accident 68 Fire/property 222 02.7 89.2 23.5 TOTAL,93m 74.6 Motor 336 Liability 249 Combined ratio % 02. 0.8 98. 64.0 63. 63.9 203 204 Q 205 Motor Liability Fire/ prop. Personal acc. Legal prot. Other Total 5
Business field ERGO International property-casualty Combined ratio in seasonal range previous year s figure was extraordinary good Combined ratio 99.2 98.0 97.2 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Q Q2 Q3 Q4 Expense ratio Loss ratio 00.4 94.9 97.5 00.0 96.8 98.7 % Gross premiums written Other 84 Legal protection 87 Greece 45 TOTAL 588m Poland 23 Turkey 59 Combined ratio % 98.7 97.3 98.7 37.9 38.8 38.6 95.7.7 86. 98.7 02.7 98.7 60.8 58.5 60. 203 204 Q 205 Poland Turkey Greece Legal protection Other Total 6
Business field ERGO Business field ERGO Highlights Q 205 vs. Q 204 Total premiums +0.7% Life Germany: Lower business in force; higher savings premiums resulting from unit-linked business Health Germany: Decrease in comprehensive health cover; stable premium income in supplementary insurance P-C Germany: Increase mainly driven by fire/property and liability International: Good growth esp. in Poland, Turkey and UK; new company in Singapore Investment result 3.2% Impairment on HETA 04m/ 32m (gross/net) Losses on equity derivatives High contribution of interest-rate hedging Technical result 38.9% Net result 35.3% Slight improvement in life, decrease in health and direct business Seasonal effects and several large losses (e.g. storm Niklas) Technical and investment results with decreasing effect Lower tax expenditures in Life/Health Germany and International, higher taxes in Propertycasualty Germany 7
Agenda Munich Re (Group) Munich Health Business field ERGO Reinsurance Outlook 8
Reinsurance Premium development Reinsurance Premium development Gross premiums written Segmental breakdown Q 204 6,858 Foreign-exchange effects 73 Life 2,42 (34%) ( 2.6%) Property-casualty 4,598 (66%) ( 5.0%) Divestments/Investments 8 Organic change 597 Q 205 7,00 Gross premiums written Regional breakdown % Q 204 6,858 Life 65 Property-casualty 27 Q 205 7,00 Middle East/ Africa 3 (3) Latin America 4 (5) Asia and Australasia 5 (8) North America 48 (43) Europe 30 (3) 9
Reinsurance Life Key figures Reinsurance Life Key figures Net result 89 53 22 24 34 29 7 22 7 4 Q2 Q3 Q4 Q Q2 Q3 Q4 Q 203 204 205 Q Q 204 205 Technical result Investment result Other 8 203 22 2 24 03 Q 204 Q 205 Q 204 Q 205 Q 204 Q 205 Other non-operating result, goodwill impairments, net finance costs, taxes. 20
Reinsurance Life Reinsurance Life Highlights Q 205 vs. Q 204 Gross premiums 2.6% Technical result 6.9% Positive FX effects of 97m driven by the US and Canadian dollars Organic change 262m chiefly due to reduced share of large volume deals Investment result +2.2% Regular income increased due to exchange rate development Higher disposal gains but higher losses on equity derivatives Technical result in line with full-year ambition of 400m All main markets performed largely as expected Ongoing solid contributions from Canada, Continental Europe and the UK, development in Asia once again very pleasing No further negative news emerged from US mortality and Australian disability business Insurance-related investment result Other Negative impact 42m mainly from GmxB Positive currency impact m Tax rate: 4.5% Other non-operating result, goodwill impairments, net finance costs, taxes. 2
Reinsurance Property-casualty Key figures Reinsurance Property-casualty Key figures Net result 524 895 646 505 497 835 597 646 597 305 Q2 Q3 Q4 Q Q2 Q3 Q4 Q 203 204 205 Q Q 204 205 Technical result Investment result Other 822 658 226 78 394 366 Q 204 Q 205 Q 204 Q 205 Q 204 Q 205 Other non-operating result, goodwill impairments, net finance costs, taxes. 22
Reinsurance Property-casualty Reinsurance Property-casualty Highlights Q 205 vs. Q 204 Gross premiums +5.0% Technical result 20.0% Significant positive FX effects 534m mainly driven by USD Negative organic change 335m resulting from motor (prior-year effect), fire and credit business Acquisition of Australian entity Calliden ( 8m) Again low level of major nat cat losses, but higher than prior year Reduced basic loss ratio driven by positive currency effects overcompensating renewal impact Investment result 7.% Other Regular income increased due to higher contribution of foreign exchange investments Derivative result decreased mainly due to equity and commodity derivatives, compensated by disposal gains Improved non-operating result driven by FX 77m Tax rate: 5.7% Other non-operating result, goodwill impairments, net finance costs, taxes. 23
Reinsurance Property-casualty Combined ratio Combined ratio Actual Q 205 Combined ratio % Basic losses Nat cat losses Man-made losses Expense ratio 202 9.0 50.2 7.7 3. 30.0 203 92. 5.3 4.7 5.7 30.4 204 92.7 53.0 3.33.9 32.5 Q 205 92.3 54.9.6 4.6 3.2 Combined ratio % Major losses % 99.3 94.3 89.3 86.9 0.4 9.3 9.2 92.3 Reserve releases basic losses Total Nat cat Man-made Q 205 6.2.6 4.6 Avg. annual expectation ~2.0 ~8.5 ~3.5 %-points Q 205 ~65 ~4.0 Q2 Q3 Q4 Q Q2 Q3 Q4 Q 203 204 205 Normalised combined ratio: ~98.% Mainly fire and motor; no corresponding sliding scale effects. 24
Reinsurance Property-casualty April renewals 205 Moderate price decline reflects cycle management and realisation of profitable new business opportunities April renewals 205 % 00 4.8 85.2 4.8 33.5 03.9,045 55 890 55 350,085 Change in premium +3.9% Thereof price movement ~ 2.6% Thereof change in exposure for our share +6.5% Total renewable from April Cancelled Renewed Decrease in renewable New business Estimated outcome Portfolio profitability continues to comfortably meet cost of capital Price movement is calculated on a wing-to-wing basis (including cancelled and new business) and risk-adjusted (including claims inflation/loss trend and portfolio mix effects). 25
Reinsurance Property-casualty Outlook July renewals Outlook July renewals Regional focus on North and Latin America, main renewal date in Australia Regional allocation of July renewals North America 33 % Worldwide 26 Outlook for July renewal Capacity and competition expected to remain high unless major losses occur Latin America TOTAL 2.bn Rest 6 Due to the relatively high nat cat share of ~2%, overall pricing trend will largely depend on nat cat prices Australia 7 Europe 7 Clear focus on profitability to maintain portfolio quality Asia, Pacific and Africa. 26
Agenda Munich Re (Group) Munich Health Business field ERGO Reinsurance Outlook 27
Outlook 205 Munich Re (Group) GROSS PREMIUMS WRITTEN 49 5bn (prev. 47 49bn) RETURN ON INVESTMENT At least 3% NET RESULT 2.5 3bn Higher expectation due to FX Solid return given ongoing low-interest-rate environment RoRaC target of 5% after tax over the cycle to stand Reinsurance ERGO Munich Health COMBINED RATIO ~97% (prev. 98%) COMBINED RATIO Germany: ~93% International: ~97% COMBINED RATIO ~99% NET RESULT NET RESULT NET RESULT at least 2bn ~ 500m 50 00m By segment: Reinsurance ~ 28bn, ERGO 6 6.5bn, Munich Health ~ 5.5bn. 28
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 actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forward-looking statements or to conform them to future events or developments. Figures up to 200 are shown on a partly consolidated basis. "Partly consolidated" means before elimination of intra-group transactions across segments. ERGO new segmentation: 2009 200 before elimination of business with Munich Re, 20 204 consolidated, after elimination of all intra-group business, 203 204 new segmentation, earnings include share of holding costs. 29