Quarterly statement as at 30 September 2018 7 November 2018 Jrg - PowerPoint PPT Presentation

Image: Getty Images/Oaltindag Quarterly statement as at 30 September 2018 7 November 2018 Jörg Schneider

Agenda 1 Munich Re (Group) 3 Reinsurance 2 11 2 ERGO 4 Outlook 7 15 2 Quarterly statement as at 30 September 2018

Munich Re (Group) – Financial highlights 9M result slightly above € 2bn – Well on track to meet annual guidance Munich Re (Group) Q3 2018 (9M 2018) € m € m € m Net result Technical result Investment result Net result € 483m (9M: € 2,038m) 2,436 2,038 5,629 4,865 Strong ERGO result, also benefitting 847 from one-offs – Robust reinsurance 483 result despite accumulation of nat cat claims, higher taxes and FX losses – 146 1,589 1,311 – 656 Return on investment 1 – 1,436 – 2,057 2.3% (9M: 2.8%) Q3 Q3 9M 9M Q3 Q3 9M 9M Q3 Q3 9M 9M 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 Reinsurance: 2.9%, ERGO: 1.9% – Low disposal gains: Less ZZR need Reinsurance ERGO and preservation of high valuation reserves Life and Health: Technical result incl. fee income: € 88m Life and Health Germany: Positive contribution from (incl. negative one-offs); (9M: € 419m) – On course to changed profit-share assumptions achieve annual target of ≥€ 475m Shareholders' equity Property-casualty Germany: Combined ratio: 94.7% (9M: 95.3%) Property-casualty: Combined ratio: 100.7% (9M: 97.3%) – € 27.1 bn ( – 3.8% vs. 31.12.) Major-loss ratio: 12.5% (9M: 9.3%); Reserve release: ~4% International: Burden from portfolio optimisation; Solvency II ratio increased to >260% Combined ratio: 93.3% (9M: 94.7%) 3 1 Annualised. Quarterly statement as at 30 September 2018

Munich Re (Group) – Capitalisation IFRS capital position € m € bn Equity Capitalisation 28,198 Equity 31.12.2017 Change Q3 0.4 2,038 483 Consolidated result 4.2 0.3 0.3 0.3 0.3 Changes 2.8 2.8 2.5 2.5 – 1,286 0 Dividend – 1,535 – 168 Unrealised gains/losses 225 29 Exchange rates – 617 – 200 Share buy-backs 12.6 93 75 Other 10.3 10.0 9.4 9.4 27,117 218 Equity 30.9.2018 31.8 28.2 27.2 26.9 27.1 2016 2017 31.3. 30.6. 30.9. 2018 2018 2018 Unrealised gains/losses Exchange rates Fixed-interest securities FX effect mainly driven by US$ Debt leverage 1 (%) 9M: –€ 1,350 m Q3: –€ 387 m 1%-point higher debt leverage corresponds Senior and other debt 2 to ~ € 0.3bn additional Non-fixed-interest securities Subordinated debt 9M: –€ 165 m Q3: € 232 m subordinated debt Equity 4 1 Strategic debt (senior, subordinated and other debt) divided by total capital (strategic debt + equity). Quarterly statement as at 30 September 2018 2 Other debt includes Munich Re bank borrowings and other strategic debt.

Munich Re (Group) – Investment portfolio Investment portfolio Investment portfolio 1 % Portfolio management in Q3 Land and buildings Fixed-interest securities  Land and buildings: Increase due to 4.3 (3.4) 53.9 (54.9) updated market values  Reallocations within government bond portfolio Miscellaneous 2  Further expansion of infrastructure 6.6 (6.2) investments TOTAL  Increase in equity quota at ERGO Life € 231 bn and Health Germany Shares, equity funds and participating interests 3 7.6 (7.3) Loans 27.6 (28.2) 5 1 Fair values as at 30.9.2018 (31.12.2017). 2 Deposits retained on assumed reinsurance, deposits with banks, investment funds (excl. equities), derivatives and investments in Quarterly statement as at 30 September 2018 renewable energies and gold. 3 Net of hedges: 6.7 (6.7%).

Munich Re (Group) – Investment result Investment result Investment result ( € m) Q2 2018 Return 1 Q3 2018 Return 1 9M 2018 Return 1 9M 2017 Return 1 1,836 3.2% 1,598 2.8% 4,927 2.8% 4,881 2.8% Regular income – 140 – 0.2% – 219 – 0.4% – 475 – 0.3% – 160 – 0.1% Write-ups/write-downs 282 0.5% 46 0.1% 912 0.5% 1,739 1.0% Disposal gains/losses – 53 – 0.1% – 15 – 412 – 0.2% Derivatives 2 56 0.1% 0.0% – 165 – 0.3% – 171 – 0.3% – 485 – 0.3% – 421 – 0.2% Other income/expenses 1,311 2.3% 4,865 2.8% 1,759 3.1% 5,629 3.2% Investment result 2.3% 1.1% 2.2% 1.0% Total return 3-month Write-ups/ Disposal Write-ups/ Disposal reinvestment yield Q3 2018 write-downs gains/losses Derivatives 9M 2018 write-downs gains/losses Derivatives – 5 – 95 0 15 37 453 Fixed income 3 Fixed income 3 2.5% Q3 2018 – 151 – 35 – 314 – 6 88 434 Equities Equities Q2 2018 2.3% – 18 – 30 41 100 Commodities/inflation Commodities/inflation Q1 2018 1.9% – 50 – 57 – 126 – 13 13 25 Other Other 6 1 Annualised return on quarterly weighted investments (market values) in %. Impact from dividends on regular income: Q3 2018 0.2%-pts; 9M 2018 0.3%-pts. Quarterly statement as at 30 September 2018 2 Result from derivatives without regular income and other income/expenses. 3 Thereof interest-rate hedging ERGO: Q3 –€ 20m/ –€ 5m (gross/net); 9M –€ 20m/ –€ 7m (gross/net).

ERGO 7 Quarterly statement as at 30 September 2018

ERGO ERGO € m € m Gross premiums written Major result drivers Technical result 9M 9M 13,234 9M 2017  2018 2017 Q3: Improvements in all segments – 56 Foreign exchange Technical result 880 493 387  L&H Germany: Driven by a positive one- off effect due to changed profit share 0 Divestments/investments – 241 92 333 Non-technical result assumptions thereof 245 Organic change – 699 2,832 3,531  International: Primarily motor business investment result in Poland as well as good performance in 13,423 – 614 – 602 – 12 9M 2018 Other Health (Belgium and Spain) 359 224 134 Net result  P-C Germany: Core business with  Property-casualty Germany 1 (+ € 80m) favorable loss development Positive development in almost all lines of Q3 Q3 business, mainly in fire/property and marine Investment result  2018 2017  International (+ € 62m)  9M: Lower disposal gains due to less ZZR 519 225 294 Technical result Growth due to P-C, primarily Poland need; valuation reserves preserved – 68 – 140 Non-technical result 72 and the Baltic states  9M: Higher result from derivatives, primarily thereof  Life and Health Germany 1 (+ € 47m) equities and fixed income – 213 688 901 investment result  Q3: Return on investment: 1.9% Growth in Travel and Direct could – 278 – 268 – 11 Other overcompensate decrease in Life Other 173 29 144 Net result  Q3: Higher deferred tax expenses 8 1 Life and Health Germany (L&H Germany); Property-casualty Germany (P-C Germany). Quarterly statement as at 30 September 2018

ERGO ERGO Property-casualty Germany € m Combined ratio % Gross premiums written 9M 2018  Loss ratio  Expense ratio Other Motor 357 589 97.0 2016 61.9 35.1 97.5 2017 64.1 33.5 95.3 62.7 32.6 9M 2018 94.7 Q3 2018 63.4 31.4 TOTAL Legal protection Fire/property € 2,699 m 318 499 101.7 100.3 100.0 99.1 98.1 94.7 92.7 90.3 Personal accident Liability Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 466 471 2016 2017 2017 2017 2017 2018 2018 2018 9 Quarterly statement as at 30 September 2018

ERGO ERGO International – Property-casualty, including Health 1 € m Combined ratio % Gross premiums written 9M 2018 Other Poland  Loss ratio  Expense ratio 315 1,046 98.0 2016 64.9 33.1 TOTAL Turkey Spain 95.3 105 € 2,741 m 600 2017 63.7 31.6 Legal protection 94.7 Greece 62.2 32.5 9M 2018 494 182 93.3 Q3 2018 57.7 35.6 Combined ratio 9M 2018 % 100.2 119.3 98.7 118.4 95.6 94.7 95.3 96.0 94.7 90.6 90.9 93.3 96.3 91.5 Poland Spain Legal Greece Turkey Total 2 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 protection 2016 2017 2017 2017 2017 2018 2018 2018 10 1 Only short-term health business. 2 Including non-recurring expenses. Quarterly statement as at 30 September 2018

Reinsurance 11 Quarterly statement as at 30 September 2018

Reinsurance Reinsurance Life and Health € m € m Gross premiums written Major result drivers Technical result incl. fee income of € 419m 9M 9M 10,246 9M 2017  2018 2017  9M: In aggregate, favourable claims – 412 Foreign exchange experience, especially in the US Technical result 363 232 131  Q3: Negative impact related to sale 0 Divestments/investments 386 238 149 Non-technical result of Ellipse and a large single claim in thereof – 1,855 Organic change Canada 727 661 66 investment result  Well on track to achieve annual target 7,980 – 146 – 173 9M 2018 27 Other of ≥€ 475m 603 297 307 Net result  Negative FX effects mainly from US$ Investment result  9M: High regular income supported  Termination/restructuring of two large capital Q3 Q3 by deposits retained on assumed re-  2018 2017 relief transactions insurance; disposal gains on equities 67 23 44 Technical result and fixed income Non-technical result 137 78 59  Q3: Return on investment: 3.4% thereof 217 208 9 Other investment result  9M: FX result of –€ 4m vs. –€ 37m, – 46 – 42 – 3 Other thereof –€ 9m in Q3 159 59 100 Net result  Q3: Low tax rate of 15.1% 12 Quarterly statement as at 30 September 2018