Quarterly statement as at 31 March 2016 10 May 2016 Jrg Schneider - PowerPoint PPT Presentation

Source: Shutterstock [M] Quarterly statement as at 31 March 2016 10 May 2016 Jörg Schneider

Agenda 1 Munich Re (Group) 2 2 ERGO 7 3 Munich Health 11 4 Reinsurance 13 5 Outlook 18 2 Quarterly statement as at 31 March 2016

Munich Re (Group) – Financial highlights Q1 2016 Q1 result below expectations Munich Re (Group) Q1 2016 € m € m € m Net result Technical result Investment result Net result € 436m 945 912 1,820 1,572 790 Benign major losses not compensating for lower investment return and negative one-off effects at ERGO 436 Return on investment 1 2.7% Q1 2015 Q1 2016 Q1 2015 Q1 2016 Q1 2015 Q1 2016 Significant reduction in segments without policyholder participation – mainly due to losses on equities Reinsurance ERGO Munich Health Life: Technical result € 70m – Reinsurance: L/H Germany: Shareholders' equity Good underlying performance Countervailing one-off effects Combined ratio 101.1% mitigated by two single major losses € 31.8bn (+2.7% vs. 31.12.) P-C: Primary insurance: P-C: Combined ratio 88.4% – Combined ratio 98.6% Combined ratio 96.5% Sound capitalisation according to Major-loss ratio only 2.4% International: all metrics Combined ratio 93.2% 3 1 Annualised. Quarterly statement as at 31 March 2016

Munich Re (Group) – Capitalisation IFRS capital position € m € bn Equity Capitalisation 30,966 Equity 31.12.2015 0.4 436 0.4 Consolidated result 0.3 0.3 Changes 4.3 4.4 0.3 4.4 0 Dividend 5.5 4.4 1,395 Unrealised gains/losses – 660 Exchange rates – 235 Share buy-backs – 111 17.5% Other 15.3% 31,794 Equity 31.3.2016 13.6% 13.4% 12.8% Unrealised gains/losses Exchange rates 27.4 26.2 30.3 31.0 31.8 Fixed-interest securities FX effect mainly driven by US$ 2012 2013 2014 2015 Q1 2016 + € 1,473m Debt leverage 1 (%) Non-fixed-interest securities Senior and other debt 2 –€ 73m Subordinated debt Equity 4 1 Strategic debt (senior, subordinated and other debt) divided by total capital (strategic debt + equity). Quarterly statement as at 31 March 2016 2 Other debt includes bank borrowings of Munich Re and other strategic debt.

Munich Re (Group) – Investment portfolio Investment portfolio Investment portfolio 1 % Portfolio management in Q1  Government bond exposure: Shift from Land and buildings Fixed-interest securities 2.8 (2.9) 56.3 (55.7) France and Spain to emerging markets, USA and supranationals  Covered bonds: Shift from Ireland and Spain to Germany Shares, equity funds and participating interests 2  Expansion of corporate bonds 5.3 (5.2) TOTAL  Reduction of net equity exposure to 3.9% € 233bn  Duration increase due to decline of interest rates Miscellaneous 3 6.1 (7.5) Loans 29.4 (28.7) 5 1 Fair values as at 31.3.2016 (31.12.2015). 2 Net of hedges: 3.9% (4.8%). 3 Deposits retained on assumed reinsurance, deposits with banks, investment funds (excl. equities), Quarterly statement as at 31 March 2016 derivatives and investments in renewable energies and gold.

Munich Re (Group) – Investment result Investment result € m Investment result Return 1 Q1 2015 Q1 2016 Return 1 1,628 2.8% 1,801 3.0% Regular income – 219 – 0.4% – 152 – 0.2% Write-ups/write-downs 218 0.4% 998 1.6% Disposal gains/losses – 706 – 1.2% Derivatives 2 74 0.1% – 128 – 0.2% – 121 – 0.2% Other income/expenses 1,572 2.7% 1,820 3.0% Investment result 13.2% 16.2% Total return 3-month Write-ups/ Disposal Write-ups/ Disposal reinvestment yield Q1 2016 write-downs gains/losses Derivatives Q1 2015 write-downs gains/losses Derivatives – 87 – 97 220 228 620 134 Fixed income 3 Fixed income 3 1.9% Q1 2016 – 150 – 3 – 136 – 31 – 760 369 Equities Equities – 30 – 68 – 6 1.8% Q4 2015 Commodities 52 Commodities – 38 20 Inflation Inflation 2.0% Q1 2015 – 34 – 9 – 18 1 9 26 Other Other 6 1 Annualised return on quarterly weighted investments (market values) in %. 2 Result from derivatives without regular income and other income/expenses. Quarterly statement as at 31 March 2016 3 Thereof interest-rate hedging ERGO: € 267m/ € 34m (gross/net).

ERGO

ERGO – Key financials ERGO Q1 2016 vs. Q1 2015 € m € m Gross premiums written Net result 4,585 102 Q1 2015 Q1 2015 – 29 – 34 Foreign exchange Technical result – Divestments/investments Non-technical result 1 8 – 61 – 101 Organic change Other – 25 4,495 Q1 2016 Q1 2016  Decline in L/H Germany ( –€ 79m) and Slight decrease of technical result in all Increase in investment result International ( –€ 37m). Increase in P-C segments: International ( –€ 15m), P-C  Equity impairments overcompensated by Germany (+ € 26m) Germany ( –€ 14m) and L/H Germany ( –€ 5m) significantly improved result from  Life Germany: Regular premiums down due  Decline in International stemming from derivatives to natural abrasion of portfolio Life business  International: Decrease caused by Life  P-C Germany mainly affected by losses Other (Poland, Belgium), Increase in P-C in liability  Higher tax expenses  P-C Germany: Increase driven by expansion  L-H Germany: Decrease in Life and  Negative one-off effect from accounting of Title insurance business Health partly compensated by difference between IFRS and local GAAP improvements in Direct regarding pension liabilities 8 1 Non-technical result including investment result, insurance-related investment result, other operating result and deduction of income from technical interests. Quarterly statement as at 31 March 2016

ERGO Property-casualty Germany ERGO Property-casualty Germany € m Combined ratio % Gross premiums written Other 123 340 Motor Loss ratio Expense ratio 95.3 63.1 32.3 Legal protection 117 2014 TOTAL € 1,219m Personal accident 167 97.9 64.7 33.2 2015 Fire/property 225 248 Liability 62.8 35.8 98.6 Q1 2016 Combined ratio Q1 2016 % 103.9 113.2 104.5 104.1 102.2 101.3 98.6 98.1 97.1 76.2 95.3 98.6 96.1 93.5 93.4 Motor Liability Fire/ Personal Legal Other Total Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 prop. acc. prot. 2014 2014 2014 2015 2015 2015 2015 2016 9 Quarterly statement as at 31 March 2016

ERGO International ERGO International € m Combined ratio % Gross premiums written Other 92 225 Poland Loss ratio Expense ratio 97.3 58.5 38.8 2014 TOTAL Greece 46 € 615m 104.7 65.3 39.4 2015 Turkey 62 190 Legal protection 55.6 37.6 93.2 Q1 2016 Combined ratio Q1 2016 % 115.3 102.3 98.1 93.2 91.4 90.0 104.1 100.4 100.0 67.7 98.7 97.5 96.8 93.2 Poland Legal Turkey Greece Other Total Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 prot. 2014 2014 2014 2015 2015 2015 2015 2016 10 Quarterly statement as at 31 March 2016

Munich Health

Munich Health – Key financials Munich Health Q1 2016 vs. Q1 2015 € m € m Gross premiums written Net result 1,443 21 Q1 2015 Q1 2015 – 52 3 Foreign exchange Technical result – – 4 Divestments/investments Non-technical result 1 – 108 – 4 Organic change Other 1,283 16 Q1 2016 Q1 2016 Investment result ( –€ 10m)  Negative FX effects mainly driven by Can$ Technical result  Organic decrease mainly driven by reduced  Stable regular income Overall combined ratio almost unchanged share and restructuring of one large treaty at 100.2%  Lower disposal gains from fixed-income  Termination of poorly performing employer  Reinsurance: 101.1% (+0.3%) investments and one-off effect in prior year stop-loss accounts in the US Deterioration from reduced share and restructuring of large treaties  Positive effects from growth in China Other  Primary insurance: 96.5% ( – 1.6%)  Tax rate: 10.4% Bottom-line increase driven by Spain 12 1 Non-technical result including investment result, insurance-related investment result, other operating result and deduction of income from technical interests. Quarterly statement as at 31 March 2016

Reinsurance 13 Quarterly statement as at 31 March 2016

Reinsurance Life – Key financials Reinsurance Life Q1 2016 vs. Q1 2015 € m € m Gross premiums written Net result 2,412 70 Q1 2015 Q1 2015 – 109 – 33 Foreign exchange Technical result – – 52 Divestments/investments Non-technical result 1 – 98 35 Organic change Other 2,205 20 Q1 2016 Q1 2016 Investment result ( –€ 138m)  Negative FX effects driven by Can$ Technical result  Negative organic change due to cancellation/  Reduction of technical result mainly  Lower interest income from deposits retained modification of large capital relief deals due to two large single claims on assumed reinsurance due to cancellation/ modification of large capital relief deals  Growth in USA and Asia  Good claims experience specifically  Lower gains from sale of equities and fixed- in Canada and Europe income investments Other  Improved GMxB result  FX impact –€ 1m vs. + € 11m  Tax income of € 30m 14 1 Non-technical result including investment result, insurance-related investment result, other operating result and deduction of income from technical interests. Quarterly statement as at 31 March 2016