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 Reinsurance Outlook 5 Backup 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 TOTAL reinvestment yield Miscellaneous 2 € 247 bn ▪ 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% Shares, equity funds and Loans participating interests 3 ▪ Higher cash position for dividend funding 5.4 (7.1) 26.3 (26.1) €m Portfolio duration 1 DV01 1,4 Assets Liabilities Assets Liabilities Net 7.2 (6.5) 7.7 (6.3) 52 (46) 43 (34) Reinsurance 9 9.6 (9.4) 10.0 (10.1) 130 (126) 136 (139) ERGO – 6 8.8 (8.4) 9.3 (9.0) 182 (172) 179 (173) Munich Re 3 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 7 Quarterly statement as at 31 March 2020 7 May 2020 investments in renewable energies and gold. 3 Net of hedges: 3.5% (6.4%). 4 Market value change due to a parallel downward shift in yield curve by one basis point, considering the portfolio size of assets and liabilities (pre-tax). Negative net DV01 means rising interest rates are beneficial.

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 Life and Health Germany Gross premiums written €m Major result drivers €m  Q1 2020 Q1 2019 2,346 Q1 2019 83 78 5 Technical result Foreign exchange 0 – 95 – 126 31 Non-technical result 0 Divestments/investments – 153 839 992 thereof investment result – 31 Organic change – 46 17 63 Other 2,315 Q1 2020 5 63 – 58 Net result ▪ Life (+€55m): Increase driven by growth Technical result Other from new products and merger of EDL 1 into ▪ Improvements in Life compensate for higher ▪ Lower tax expenses in line with EVL 2 in 2019; ordinary attrition of back book claims in Health decreased net result ▪ Health ( –€10m): Growth in comprehensive ▪ FX result of €20m (€5m) Investment result and supplementary insurance ▪ Effective hedging strategy mitigates impact overcompensated by decrease in Travel from volatile capital markets, esp. in Life; ▪ Digital Ventures ( –€76m): Reduction decline in Health related to merger EDL 1 into EVL 2 ▪ Lower realisations for ZZR funding compared with Q1 2019 ▪ Return on investment of 2.7% 10 Quarterly statement as at 31 March 2020 7 May 2020 1 ERGO Direkt Leben (EDL). 2 ERGO Vorsorge Leben (EVL).

ERGO ERGO Property-casualty Germany Gross premiums written €m Major result drivers €m  Q1 2020 Q1 2019 1,349 Q1 2019 59 23 37 Technical result Foreign exchange 2 – 4 – 14 Non-technical result 10 0 Divestments/investments thereof investment result 51 45 7 88 Organic change – 34 – 40 Other 5 1,439 Q1 2020 21 14 Net result 7 ▪ Strong organic growth in almost all lines of Technical result Investment result business; mainly driven by fire/property ▪ Improvement driven by premium growth, ▪ Effective hedging strategy stabilises (+€26m), other insurance (+€24m, primarily favourable claims and cost development investment result title insurance) and motor (+€20m) ▪ Major losses within expectations and ▪ Return on investment 2.7% significantly lower than prior year ▪ Combined ratio with 93.4% (98.1%) Other significantly improved in almost all business ▪ Higher tax expenses due to different lines treatment of equities and derivatives 11 Quarterly statement as at 31 March 2020 7 May 2020

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 12 Quarterly statement as at 31 March 2020 7 May 2020