Quarterly statement as at 31 March 2020 Christoph Jurecka, Group CFO - PowerPoint PPT Presentation

Quarterly statement as at 31 March 2020 Christoph Jurecka, Group CFO 7 May 2020 Image: Klaus Ohlenschläger / dpa Picture Alliance

Quarterly statement as at 31 March 2020 1 2 Munich Re ERGO 3 4 Outlook Reinsurance 2 Quarterly statement as at 31 March 2020 7 May 2020

Munich Re – Covid-19 Covid-19: Dynamic situation with ongoing high uncertainty, affecting assets and liabilities of the insurance industry Covid-19 Population Economy Capital markets ▪ Strong increase in ▪ Government lock downs ▪ Slump in equity markets infections and fatalities ▪ Event cancellations ▪ Spike in credit spreads Observations ▪ Persons affected are ▪ Economic downturn ▪ Drop in interest rates mostly elderly or patients ▪ Extreme volatility with preconditions ▪ Impact on life book too ▪ Contingency claims ▪ Volatility affects investment Financial early to assess already observable portfolio impact on ▪ Claims in other lines to ▪ SII ratio drops to 212% – Munich Re become more relevant in well within the optimal range the remainder of the year 3 Quarterly statement as at 31 March 2020 7 May 2020

Munich Re – Covid-19 Financial impact on Munich Re manageable Life/Health P-C Investments ▪ No notable impact so far ▪ ~€800m in Covid -19- ▪ Equity impairments and related claims across net disposal losses: ▪ Higher mortality in the P&L impact various lines of business … –€1,669m US not related to Covid-19 in Q1 ▪ … whereas contingency ▪ Derivatives result: +€1,600m losses account for the largest share by far ▪ Impact depends on mortality, ▪ Contingency losses could ▪ Resilient ROI under the Outlook/ increase to high 3- digit €m esp. in North America caveat of no further Projection 2020 amount or maybe higher significant deterioration ▪ Scenario of 200-year event in capital markets ▪ Losses in other lines (based on assumption of 10m incremental global subject to further deaths) ~€1.4bn development 4 Quarterly statement as at 31 March 2020 7 May 2020

Munich Re – Financial highlights Q1 2020 Pleasing result given exceptional circumstances Munich Re Q1 2020 (Q1 2019) Net result Technical result Investment result Net result €221m (€633m) €m €m €m 633 647 1,920 Reinsurance result of €149m 1,757 impacted by Covid-19-related losses in P-C and burden from North American L/H business – 221 ERGO result at €72m 119 Return on investment 1 Q1 2019 Q1 2020 Q1 2019 Q1 2020 Q1 2019 Q1 2020 3.1% (3.0%) Equity impairments and disposal losses largely offset by hedging Reinsurance ERGO derivatives – reinvestment yield Life and Health: Technical result incl. fee income: €56m stable at 1.9% L/H Germany: Relatively low RoI: 2.7% (€112m) – pleasing fee income, negative effects in NA – – net result €5m net result €8m Shareholders’ equity Property-casualty: Property-casualty: Combined ratio (C/R): 106.0% (97.3%) – C/R: 93.4% (98.1%) – net result €21m € 29.1 bn ( – 4.8% vs. 31.12.) Major-loss ratio: 21.1% (9.7%) – net result €141m April renewals: International: Return on equity 1 : 3.9% C/R: 95.2% (95.4%); – net result €46m Price change: ~3%, premium change: +25.7% Solvency II ratio: 212% 5 Quarterly statement as at 31 March 2020 7 May 2020 1 Annualised.

Munich Re – Capitalisation Capital position Equity €m Capitalisation € bn 0.4 Equity 31.12.2019 30,576 0.3 0.3 Consolidated result 221 4.2 0.3 0.3 3.8 3.9 Changes 2.8 3.7 Dividend 0 – 1,121 Unrealised gains/losses – 105 Exchange rates – 359 Share buy-backs 13.2 12.6 12.6 – 96 12.0 Other 10.0 Equity 31.3.2020 29,116 31.8 28.2 26.5 30.6 29.1 2016 2017 2018 2019 31.3.2020 Unrealised gains/losses Exchange rates Devaluation of various currencies, partly Fixed-interest securities Debt leverage 1 (%) –€159m offset by stronger US$ Senior and other debt 2 Subordinated debt Non-fixed-interest securities Equity –€965m 6 Quarterly statement as at 31 March 2020 7 May 2020 1 Strategic debt (senior, subordinated and other debt) divided by total capital (strategic debt + equity). 2 Other debt includes Munich Re bank borrowings and other strategic debt.

Munich Re – Investments Investment portfolio Investment portfolio 1 % Portfolio management in Q1 Land and buildings Fixed-interest securities ▪ Expansion of corporates and emerging market 5.0 (4.7) 54.2 (53.9) bonds as well as investments in government bonds with longer maturities stabilise reinvestment yield Miscellaneous 2 ▪ Reduction of equity exposure due to sharp 9.1 (8.1) market decline and de-risking – equity quota net of hedges down to 3.5% TOTAL € 247 bn ▪ Higher cash position for dividend funding Shares, equity funds and participating interests 3 5.4 (7.1) Loans 26.3 (26.1) 7 Quarterly statement as at 31 March 2020 7 May 2020 1 Fair values as at 31.3.2020 (31.12.2019). 2 Deposits retained on assumed reinsurance, deposits with banks, investment funds (excl. equities), derivatives and investments in renewable energies and gold. 3 Net of hedges: 3.5 (6.4%).

Munich Re – Investments Investment result €m Q1 2020 Return 1 Q1 2019 Return 1 1,544 2.5% 1,611 2.7% Regular income – 1,459 – 2.4% – 83 – 0.1% Write-ups/write-downs 377 0.6% 602 1.0% Disposal gains/losses – 231 – 0.4% Derivatives 2 1,600 2.6% – 142 – 0.2% – 142 – 0.2% Other income/expenses 3.1% 1,757 3.0% 1,920 Investment result – 0.1% 12.5% Total return 3-month Write-ups/ Disposal Write-ups/ Disposal reinvestment yield Q1 2020 write-downs gains/losses Derivatives Q1 2019 write-downs gains/losses Derivatives – 15 – 9 415 561 370 16 Fixed income Fixed income 1.9% Q1 2020 – 1,347 – 322 – 68 – 321 1,073 188 Equities Equities 1.9% Q4 2019 – 51 Commodities/inflation 29 0 Commodities/Inflation 5 48 2.1% Q3 2019 – 126 – 11 284 17 44 25 Other Other 8 Quarterly statement as at 31 March 2020 7 May 2020 1 Annualised return on quarterly weighted investments (market values) in %. 2 Result from derivatives without regular income and other income/expenses.

ERGO 2 Image: dem10 / iStockphoto Getty Images

ERGO ERGO Gross premiums written €m Major result drivers €m  Q1 2020 Q1 2019 4,995 Q1 2019 179 145 35 Technical result Foreign exchange 0 – 80 – 7 – 73 Non-technical result – 49 Divestments/investments – 125 thereof investment result 991 1,116 103 Organic change – 27 – 53 26 Other 5,050 Q1 2020 72 85 – 12 Net result ▪ L&H Germany 1 ( –€31m ): Positive Technical result Investment result development in Health and successful growth ▪ L&H Germany (+€5m), improvement in Life ▪ Hedging strategy proved effective in a from new products in Life overcompensated compensating for higher claims in Health very volatile capital market environment, by ordinary attrition of back book and resulting in lower burden from equity ▪ P-C Germany (+€37m), improvement driven decrease in Travel impairments by premium growth, favourable claims and ▪ P-C Germany 1 (+€90m): Good growth in ▪ Return on investment 2.6% cost development almost all business lines, mainly driven by ▪ International ( –€7m), increase in Health fire/property, other insurance and motor Other (mainly Spain) being offset by decrease in ▪ International ( –€5m): Good premium ▪ Higher FX result in L&H Germany and P-C and legal protection increase adjusting for portfolio streamlining International and run-down in Belgium ▪ Lower tax expenses 10 Quarterly statement as at 31 March 2020 7 May 2020 1 Life and Health Germany (L&H Germany); Property-casualty Germany (P-C Germany).

ERGO ERGO Property-casualty Germany Combined ratio Gross premiums written in Q1 2020 (Q1 2019) €m % Other Motor ◼ Loss ratio ◼ Expense ratio 130 (106) 373 (353) 96.0 2018 62.5 33.4 92.3 2019 60.3 32.0 Q1 Marine 93.4 61.0 32.4 2020 52 (49) TOTAL Fire/property € 1,439 m 307 (281) (€1,349m) 98.1 97.9 93.4 94.7 Legal protection 93.2 92.1 90.3 123 (123) 86.2 Personal accident Liability Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 159 (160) 295 (277) 2018 2018 2018 2019 2019 2019 2019 2020 11 Quarterly statement as at 31 March 2020 7 May 2020

ERGO ERGO International €m Combined ratio % Gross premiums written in Q1 2020 (Q1 2019) Property-casualty Life 702 (730) 170 (170) 95.2 95.6 95.4 95.0 94.8 94.5 93.3 91.8 TOTAL € 1,295 m (€ 1,300m) Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Health 2018 2018 2018 2019 2019 2019 2019 2020 423 (400) 2020 Q1 Q1 P-C Q1 Q1 Life 101.7 95.2 2020 2019 97.0 2020 2019 96.4 thereof: 92.7 thereof: 90.4 85.8 Austria 89 86 Poland 375 370 Belgium 38 37 Legal protection 179 168 Q1 Q1 Health Greece 57 57 2020 2019 thereof: Baltics 48 48 256 241 Spain Poland Spain Austria Baltics Greece Legal Total Austria 29 26 167 160 Belgium protection 12 Quarterly statement as at 31 March 2020 7 May 2020

Reinsurance 3 Image: John Lund Getty Images