The Munich Re Group. Analysts' conference Nikolaus von Bomhard. Jörg Schneider

Transcription

1 25 Nikolaus von Bomhard Jörg Schneider

2 Panel Nikolaus von Bomhard Chairman of the Board of Management Executive Offices Strategic Planning Internal Auditing Press Jörg Schneider Lothar Meyer Accounting/Taxes Controlling Investor Relations Integrated Risk Management ERGO Group Chairman of the Board of Management Heiner Hasford Finance General Services Organisational Design and Development Torsten Jeworrek Special and Financial Risks Information Technology 2 Agenda Nikolaus von Bomhard Introduction 4 Jörg Schneider Financial reporting 24 Munich Re Group in total 7 Reinsurance segment 21 Primary insurance segment 27 Summary 32 Nikolaus von Bomhard Strategy 34 Outlook 49 BACKUP 54 3

3 Agenda Nikolaus von Bomhard Introduction 4 Jörg Schneider Financial reporting 24 Munich Re Group in total 7 Reinsurance segment 21 Primary insurance segment 27 Summary 32 Nikolaus von Bomhard Strategy 34 Outlook 49 BACKUP 54 4 Introduction Promised and delivered What we said at the analysts' conference 24: 1 Reinsurance Net profit of 1,661m in 24 2 Primary insurance Net profit of 261m in 24 ERGO net profit of 22m in 24 3 Derisking Reduced concentration risks Net profit in 24 of 1,833m 5

4 Introduction Balance of progress Moving ahead Achievements Strict focus on risk-adequate pricing ERGO restructuring and strict profitability-oriented product policy Work in progress German life insurance American Re Concentration in HVB/Allianz Uniform control Reduction of major financial stakes US casualty project and closer alignment of American Re Victoria Leben capital situation clarified 6 Agenda Nikolaus von Bomhard Introduction 4 Jörg Schneider Financial reporting 24 Munich Re Group in total 7 Reinsurance segment 21 Primary insurance segment 27 Summary 32 Nikolaus von Bomhard Strategy 34 Outlook 49 BACKUP 54 7

5 Executive summary 24 Strict profit orientation pays off Profit of 1,833m, result before amortisation of goodwill approximately 3bn Gross premium income down by 5.8% Combined ratios: Very good in reinsurance at 98.9%, despite burden of 4.5 percentage points for NatCat losses; excellent in primary insurance at 93.% Exceptional impacts successfully absorbed: Natural catastrophes losses, writedowns on real estate, US reserves strengthening and special writedowns at HVB Investment result increased to 8.bn Reduction of concentration risks consistently pursued Shareholders' equity strengthened by 1.3bn to 2.2bn 8 Munich Re Group in total Income statement Good result in % Consolidation of premium income Gross premiums written Net earned premiums 38,71 36,534 4,431 37, Strong investment result Investment result Total income Total expenses* 8,41 45,691 42,743 7,131 45,959 43, Result before amortisation of goodwill increased by 5% Result before amortisation of goodwill* Amortisation of goodwill Operating result before taxes on income* 2, ,64 1, , Group result within our adjusted target corridor Taxes on income* 712 1, Minority interests in earnings Group result 1, Earnings per share in * Adjusted after reallocation of "other tax" from "tax" to "other expenses". 9

6 Munich Re Group in total Gross premiums written Within our expectations Gross premiums written Change Adjusted change* 24 38,71 5.8% 3.8% 23 4,431 1.% 7.% Decrease in premiums due to strength of Euro strict underwriting policy Reinsurers' share Primary insurers' share 54% 46% 56% 44% [CAGR (Compound Annual Growth Rate) 224: 4.1%] Gross premiums written in bn in % Change Adjusted change* Reinsurers' share Primary insurers' share * Excluding currency fluctuations and acquisitions/divestments. 1 Munich Re Group in total Development of exchange rates US$ weakened premiums and shareholders' equity increase Dec 2 1, Mar 3 Jun 3 Sep 3 Dec 3 Mar 4 Jun 4 Sep 4 Dec 4 Change in exchange rate compared with last year,95,9 US$ 1 =.84 1 = US$ 1.19 For income statement: Q4 24 from Q %,85,8,75 US$ 1 =.79 1 = US$ 1.26 US$ 1 =.77 1 = US$ 1.3 US$ 1 =.74 1 = US$ 1.36, Q14 24 from Q % For balance sheet: from % Income statement (average exchange rates) Balance sheet (period-end exchange rates) 11

7 Munich Re Group in total Analysis of premium development Consolidation due to currency and underwriting policy Gross premiums written 23 4,431 Foreign-exchange effects 656 (1.6%) Divestment/Investment 168 (.4%) Organic change Gross premiums written 24 1,536 (3.8%) 38,71 (5.8%) Breakdown by segment Reinsurance Property-casualty 13,988 (36.7%) ( 17.3%) Primary insurance Property-casualty 5,178 (13.6%) ( +2.%) Reinsurance Life and health 6,583 (17.3%) ( %) Primary insurance Life and health 12,322 (32.4%) ( 1.7%) 12 Munich Re Group in total Investment result Back to a strong level Regular income Result from the disposal of investments Writedowns on investments thereof securities available for sale in reinsurance segment* thereof securities available for sale in primary insurance segment* 24 7,498 2,339 1, ,328 2,484 1, in % Investment result improved Significant reduction in writedowns and in losses from the disposal of investments due to improved capital markets thereof other investments in all segments Income from write-ups Other income/expenses 1,21 1, Total 8,41 7, * Net effect: 141m (PY: 23m) from non-fixed-interest securities available for sale including both segments. 13

8 Munich Re Group in total Return on investment 24: Target reached IFRS Economic view Return 7,498 1,21 1,564 8,41 2,874 1, %.6 %.9 % 4.2% 4.5% 6.1% 24* Regular income Other income/ expenses Noncurrent income** Investment result Change in total reserves*** Total income * Return on average investment market values in % (investments as at 31 December 23 including all own properties). ** Non-current income includes gains/losses on the disposal of investments, writedowns and write-ups on investments. *** Off-balance-sheet reserves as at 31 December 23 including all reserves on own properties. 14 Munich Re Group in total Investments Derisking reflected in reduced equity exposure Investment structure by asset classes (market values) Equity exposure in bn 1% 8% in % Before hedges After hedges % 4% Real estate Participating interests Loans 2% securities Shares and equity funds % * Miscellaneous * After reallocation of own properties of Munich Reinsurance Company to other assets. 15

9 Munich Re Group in total Development of equities and interest rates Favourable market development in % Dec 3 11 Mar 4 Jun 4 Sep 4 Dec 4 Euro STOXX 5 in 24: +6.9% Datastream Bond Index in 24: +2.9% Euro STOXX 5 Datastream Bond Index ( all lives) Source: Datastream 16 Munich Re Group in total Unrealised gains and losses on securities available for sale 6,629 3,249 6,889 8,44 8,44 3, ,441 8,87 7,812 8,866 5,924 1,458 2, Net unrealised gains Policyholders' participation Deferred taxes Minorities Consolidation Shareholders' stake Unrealised gains (gross) Unrealised losses (gross) 17

10 Munich Re Group in total Investments Off-balance-sheet reserves Real estate* 1,691 At equity 466 Other investments 979 3,136 1, Off-balance-sheet reserves ,136 Offbalancesheet reserves Deferred taxes Policyholders' participation Minorities Shareholders' stake * Without reserves on own properties of Munich Reinsurance Company. 18 Munich Re Group in total Shareholders' equity Benefited from good 24 result 18, , ,196 Shareholders' equity Paid dividends Change in Change Consolidated unrealised resulting from result gains/losses* valuation at equity Changes in exchange rates Other changes Shareholders' equity * On other securities. 19

11 Munich Re Group in total Segment results Positive in primary insurance and reinsurance Reinsurance Primary insurance Asset management 24 1, ,632 1,91 2 Despite losses from hurricanes: Strong earnings in reinsurance Primary insurance back to positive Consolidation Group result 1, Agenda Nikolaus von Bomhard Introduction 4 Jörg Schneider Financial reporting 24 Munich Re Group in total 7 Reinsurance segment 21 Primary insurance segment 27 Summary 32 Nikolaus von Bomhard Strategy 34 Outlook 49 BACKUP 54 21

12 Reinsurance segment Income statement Strict bottom-line orientation Gross premiums written Net earned premiums Investment result Total income Total expenses* Result before amortisation of goodwill* Amortisation of goodwill Operating result before taxes on income* 24 22,397 21,475 3,597 25,547 23,166 2, , ,795 22,651 3,584 26,747 24,36 2, ,66 in % Consolidation of premium income due to profit orientation and currency effects Reduced taxes due to high storm losses and taxfree gains on disposal of investments Excellent results Taxes on income* Minority interests in earnings 5 1 Group result 1,661 1, * After reallocation of "other tax" from "tax" to "other expenses". 22 Reinsurance segment Analysis of premium development Consolidation due to currency and underwriting policy Gross premiums written 23 24,795 Foreign-exchange effects 69 (2.8%) Organic change 1,78 (6.9%) Breakdown by segment Gross premiums written 24 22,397 (9.7%) Property-casualty 14,857 (66.4%) ( 17.1%) Life 6,119 (27.3%) ( +12.1%) Health 1,421 (6.3%) ( +.4%) 23

13 Reinsurance segment American Re US GAAP key figures 24 in US$m Gross premiums written Net earned premiums Investment result Total income Total expenses 24 4,26 1, ,68 2, ,611 1, ,411 1,98 in % Results significantly impacted by reserve strengthening of US$ 482m (23: US$ 368m) including US$ 18m (23: US$ m) for prior-year asbestos liabilities Operating result before taxes on income Taxes on income Group result High catastrophe losses of US$ 22.1m (23: US$ 5.7m) Statutory surplus as at ,386 3, in % in %-pts Combined ratio Risk based capital ratio Reinsurance segment NatCat year 24 Just seven events tripled NatCat combined ratio NatCat impact on combined ratio in %-pts of combined ratio : Most expensive NatCat year for insurers in history 1-year average 3.%-pts NatCat loss events 24 Hurricane Charley 66 Hurricane Frances 97 Hurricane Ivan 221 Hurricane Jeanne 64 Typhoons Songda/Tokage 165 Tsunami Asia 1 25

14 Reinsurance segment Combined ratio non-life Good considering storm series and reserve strengthening in % Combined ratio influenced by: Loss ratio Expense ratio Combined ratio thereof NatCat Exceptional NatCat series in Q3 and Q4 Strengthening of US loss reserves Combined ratio ex. NatCat Improved pricing Combined ratio Performance from 1995 to 24 in % Sustainably enhanced conditions 13 in % Q Q Q Q Agenda Nikolaus von Bomhard Introduction 4 Jörg Schneider Financial reporting 24 Munich Re Group in total 7 Reinsurance segment 21 Primary insurance segment 27 Summary 32 Nikolaus von Bomhard Strategy 34 Outlook 49 BACKUP 54 27

15 Primary insurance segment Income statement Clear return to profitability Gross premiums written Net earned premiums 24 17,526 15, ,64 14,966 in %.6.6 Stable premium income Improved investment result Investment result Total income Total expenses* 4,587 21,91 2,476 4,29 2,688 2, Result before amortisation of goodwill nearly tripled Result before amortisation of goodwill* Amortisation of goodwill Operating result before taxes on income* Taxes on income* Minority interests in earnings Group result 261 1,91 * Adjusted after reallocation of "other tax" from "tax" to "other expenses". 28 Primary insurance segment Analysis of premium development Consolidation following some strong years Gross premiums written 23 17,64 Foreign-exchange effects 4 (.%) Divestment/Investment 168 (.9%) Organic change Gross premiums written 24 5 (+.3%) 17,526 (.6%) Breakdown by segment Life 7,787 (44.4%) ( 2.8%) Property-casualty* 5,22 (29.7%) ( +2.4%) Health 4,537 (25.9%) (.2%) * Inclusive legal protection. 29

16 Primary insurance segment Primary life New business development in Germany Single and regular premiums 2,22 1,348 1% 23% 2,8 1, % 965 Single Regular Split of regular premiums Other Riester Unit L. Annuity Endow. New business declined due to lower single premiums Development of regular premiums shows encouraging improvements (e.g. unit-linked) Annualised premium equivalent +6% 1,69 1,7 Sum of premiums* in bn % 17.7 Sum of premiums is more adequate for assessing new business * Expected sum of premiums over the life of contract. 3 Primary insurance segment Combined ratio property-casualty Exceptionally low level in % Loss ratio* Expense ratio* Combined ratio in property-casualty* *Inclusive legal protection Combined ratio Development from 1998 to Lower combined ratio due to: Improved pricing Significantly enhanced conditions Excellent portfolio mix in % 15 in % Q Q Q Q

17 Agenda Nikolaus von Bomhard Introduction 4 Jörg Schneider Financial reporting 24 Munich Re Group in total 7 Reinsurance segment 21 Primary insurance segment 27 Summary 32 Nikolaus von Bomhard Strategy 34 Outlook 49 BACKUP Summary Convincing performance in 24 Shareholders' equity up by 1.3bn to 2.2bn Profit takes precedence over growth Strict focus on business quality, thus decrease in premiums accepted as side effect Combined ratios: Reinsurance 98.9%, primary insurance 93.% Investment result again strong at 8,41m Outstanding result in reinsurance of 1,661m Primary insurance back in the profit zone with 261m 1.8bn profit: Target reached within our adjusted target corridor 33

18 Agenda Nikolaus von Bomhard Introduction 4 Jörg Schneider Financial reporting 24 Munich Re Group in total 7 Reinsurance segment 21 Primary insurance segment 27 Summary 32 Nikolaus von Bomhard Strategy 34 Outlook 49 BACKUP Strategy Turning risk into value Active risk diversification Sustainable success Excellent steering and control Focus on risk as our business 35

19 Strategy: Active risk diversification Success by risk diversification Active risk diversification Measuring diversification Transforming diversification into tangible benefits Munich Re Group capital model Robust determination of diversification and concentration effects using multidisciplinary state-of-the-art tools Capital fungibility Optimising intragroup risk mitigation instruments (e.g. retrocession) with effective Group oversight to limit contagion risks Further derisking, significantly improving our quality and mobility of capital Dynamic portfolio management Active capital management balancing regulatory, rating agency and economic needs Active shift of capital in reinsurance depending on the cycle(s) Comprehensive accumulation control Optimising portfolio riskadjusted returns through "best of breed" ALM 36 Strategy: Active risk diversification Optimising portfolio risk-adjusted returns through "best of breed" ALM Deep understanding of our liabilities Their links to economic indicators Munich Re Group Asset/liability management The key linkages Interest rates Inflation (retail, healthcare, wages, etc) Deep understanding of investment universe Ability to replicate insurance liability profiles Liability-driven investment respecting the characteristics of insurance liabilities (timing and level uncertainty) Economic growth Skill mix P&C actuaries L&H actuaries Underwriting/ claims Credit cycles Skill mix Financial analysts Financial engineers Portfolio management 37

20 Strategy: Focus on risk as our business Institutional form of how the risk is attracted increasingly of less importance risks Not insured risks Insurable Non-insurable risks Reinsurance Primary insurance Worldwide Risks Life Health Insurable Casualty emerging risks Credit and surety Individuals, groups, companies Property Marine Aviation Munich Re Group strategy with clear focus on risk 38 Strategy: Focus on risk as our business Insurance growth keeps outperforming growth in the overall economy Nominal GDP growth p.a. until 214* in selected regions Americas US: Most advanced P&C market, high share of casualty business, private care Latin America: Catching-up 5.56% 4.55% 89% Europe Demographic shift and social security reforms, integrating economy 4% 68% 12% Emerging Asia Rapid economic and insurance market growth 1112% 11% 71% Non-life insurance continued to grow faster than the economy in the last three decades Trend even stronger for life insurance USA Canada Latin America Western Europe Eastern Europe Russia China India Other Non-life insurance penetration until 23 in % Global non-life premiums/nominal GDP Trend line * Consensus; sum of real GDP and inflation. 39

21 Strategy: Focus on risk as our business Example: ERGO Health Well positioned Growing importance of supplementary insurance Co-operation with state health insurers for supplementary insurance (>1, policies sold) Co-operation covers more than 2% of total state health insurance market Extended sales channels Long-term sales co-operation with Gerling Group, Zurich Group Germany and Deutsche Bank Profit for the year Initiatives International activities China: Participation of 19% in the first commercial health insurance company (9, sales agents nationwide) Spain: Innovative combination of health insurance and health care services in the region of Denia Investment result Management of benefits and health services with preventive services and medical care Strategy: Focus on risk as our business Examples: ERGO property-casualty and legal protection Leveraging the strong position Property-casualty Skilled and selective underwriting and rigid portfolio controlling lead to outstanding technical results Excellent combined ratios for many years Favourable portfolio mix: large portion of personal accident and below average portion of motor business Legal protection Benefit from leading market position: Example legal protection Market leader in Germany and Europe Strong rise in premiums (GWP 844m / +7.3%) and profit in 24 49% of premiums from international business (GWP 413m / +15.2%) Increase of premium rates in Germany due to new "Court Fees Act" D.A.S. market leader in nine European countries Combined ratios in % * Propertycasualty Legal protection Profit for the year * Adjusted for Victoria Re 93.3%

22 Strategy: Focus on risk as our business Example: Engineering risks Success story in reinsurance Basis of business Excellent engineering knowledge (in Munich; proximity to clients in offices abroad) focused on: Risk assessment Design of primary insurance concepts Effective loss control Business approach High-quality service proposition to clients: Leverage for obtaining substantial treaty participations High facultative capacity as leading reinsurer for exceptional and major risks Profitable results in engineering insurance. Reputation as world leader in engineering often "door-opener" for participations in other attractive lines of business Munich Re Group leading engineering reinsurer with global opinion leadership Combining engineering knowhow with highquality underwriting expertise Gross premiums written 1,443 1,393 1,281 1,5 1, Combined ratio in % Strategy: Focus on risk as our business Example: Marine risks Enhancing the business model beyond traditional reinsurance via Watkins Syndicate (Lloyd's market) Marine Munich Re Group Munich Re Group leading marine reinsurer Attract reinsurance market (via Munich Re Munich) Steering of business activity via Munich Re's Corporate Underwriting Knowledge transfer into the organisation Internal retrocession Attract primary market (via Lloyd's Watkins) Lloyd's Watkins part of Munich Re Group since 1997 Successful investment: Expansion of Watkins primary business in the London market from 63m gross premiums written in 1997 to 28m in 24. Gross premiums written in m Combined ratio in % Net profit in m

23 Strategy: Excellent steering and control Key initiatives to further enhance steering and control Initiatives Integrity of data 24: ERGO's new structure Strict performance monitoring and execution Excellent steering and control Clear targets 25: Uniform control Roll-out of RSM* in the reinsurance group Clear incentives Clear structure and responsibilities Best-in-class underwriting *RSM: Renewal Steering & Monitoring 44 Strategy: Excellent steering and control Example: German primary life Finding the right balance between maximising franchise value and protecting equity capital Protecting equity capital Close the duration gap (invest longer) as interest rates fall Dynamic hedging strategies Dynamic bonus policies Aim Marketconsistent pricing Optimising product mix Invest short to meet policyholder expectations as interest rates rise Maximising franchise value 45

24 Strategy: Excellent steering and control Example: ERGO Life Measures taken to return to profitability Reduction of explicit and implicit guarantees Introduction of a new range of unitlinked and hybrid annuity products Strengthening of terminal bonus Strengthening of cost margins (on average % of the premium) Reduced equity exposure to 1.1% Profit for the year Initiatives Proactive implementation of new mortality tables Adjustment of reserves in 23 and of prices since 24 Increase of premium level on average +5% Steering of strong distribution network Enhance sales of new products (e.g. Rürup) to compensate decline in endowments Investment result ,392 3,167 Initiatives lower growth but improve sustainable profitability Strategy: Excellent steering and control Renewal Steering & Monitoring (RSM) in reinsurance Implementing VBM metrics down to underwriting level Status of renewals Beginning Middle Last days Complements whole VBM process Premium Premium Premium Real time tool to steer and monitor renewal process Value added Value added Value added Total Total Total VBM return target Not yet offered treaties Treaties in progress Renewed treaties New treaties in 24 47

25 Strategy: Excellent steering and control American Re Corporation Actions taken More coordination and alignment with Munich Re Reduction in limits across all strategic business units Tighter underwriting guidelines Uniform underwriting risk appetite across the company in the strategic business units Exited certain classes of business: Casualty and professional liability business written as part of the Global Risk Management portfolio (GWP US$ 136m in 24) Public non-profit business written in London Non-standard personal auto business Individual risk exposure from pharmaceutical manufacturing Finite risk reinsurance (US$ 126m premiums in 24) Success of actions taken since 22 increasingly visible in recent underwriting results 48 Agenda Nikolaus von Bomhard Introduction 4 Jörg Schneider Financial reporting 24 Munich Re Group in total 7 Reinsurance segment 21 Primary insurance segment 27 Summary 32 Nikolaus von Bomhard Strategy 34 Outlook 49 BACKUP 54 49

26 Outlook Cycle outlook: 1 April 25 renewals with generally stable rates Price increases in loss-affected lines expected Korea Property: Stable renewal on prices and terms and conditions; demand for capacity remains high Casualty: Only minor changes compared to 24 expected; prices in some specialty lines (e.g. D&O) remain at too low levels Marine: Biggest claims burden in the past year, e.g. major car carrier losses; need for further improvement of terms and conditions; strain on capacity expected Japan Property: Major claims (five storms in 24) show need for continued increases to include climate change in pricing. Man-made industrial losses further support market discipline Casualty: Stable market expected, need for further improvements in case of US exposure Marine: Favourable results in 24; prices, terms and conditions expected to remain stable Overall largely stable reinsurance market, but increasing challenges: Global reinsurance capacity increasing Most players disciplined, but some erratic behaviour Munich Re Group committed to risk-adequate pricing: Best guarantee that we can continue to be our clients' preferred and reliable partner 5 Outlook Munich Re Group heads for new business opportunities Where we come from Germany-based financial conglomerate 24/25: Transition phase with focus on Developing the strategy for growth, starting with "Spearhead projects" Setting the basis for future success: Addressing weaknesses and areas of underperformance Where are we heading to Focus on managing risk as a core competence 51

27 Outlook "Spearhead projects" initiated to develop a growth strategy for Munich Re Group, e.g. Global healthcare strategy integrating primary insurance and reinsurance Longevity: Develop coordinated strategy for primary insurance and reinsurance ERGO: Review foreign and domestic business strategy with respect to Improvement of portfolio and profitability Identification of key geographical markets Risk diversification aspects Exploit business opportunities out of the synergies of different special lines businesses (including bonding, enterprise risk, project finance) Strategy for alternative risk transfer to capital markets 52 Outlook Group financial targets 25 Next step on the path to sustainable profitability Reinsurance Non-life Combined ratio 97% Life European embedded value operating earnings 81% Primary insurance Property-casualty 1 Combined ratio 95% Life and health European embedded value operating earnings 81% Asset management Group assets Return on investment 2 4.5% Munich Re Group: RoE 3 25: 12% 1 Inclusive legal protection. 2 IFRS investment result based on average IAS book values. 3 Profit for the year/average total shareholders equity, both incl. minorities 53

28 Agenda Nikolaus von Bomhard Introduction 4 Jörg Schneider Financial reporting 24 Munich Re Group in total 7 Reinsurance segment 21 Primary insurance segment 27 Summary 32 Nikolaus von Bomhard Strategy 34 Outlook 49 BACKUP BACKUP: Munich Re Group in total Income statement Overall pleasing Q4 result Q4 24 Q4 23 in % Gross premiums written 9,139 9, Net earned premiums 9,318 9, Investment result 2,311 3, Total income 11,899 13, Total expenses* 11,389 12, Result before amortisation of goodwill* Amortisation of goodwill Operating result before taxes on income* Taxes on income* Minority interests in earnings 8 12 Group result Earnings per share in * Adjusted after reallocation of "other tax" from "tax" to "other expenses". 55

29 BACKUP: Munich Re Group in total Investments in % Real estate 9,46 1, Investments in affiliated enterprises Investments in associated enterprises 3,725 4, Mortgage loans and other loans 2,31 16, Other securities held to maturity Other securities available for sale 12,27 98, ,686 23, Other securities held for trading Other investments 18,718 17, Total 178, , BACKUP: Munich Re Group in total Investment result in % Real estate Investments in affiliated enterprises Investments in associated enterprises Mortgage loans and other loans 1, Other securities held to maturity Other securities available for sale 4,886 5, ,143 1, Other securities held for trading Other investments Expenses for the management of investments Total 8,41 7,

30 BACKUP: Munich Re Group in total First-time application of new/revised IFRS standards in 25 (1) Standard IFRS 2 IFRS 3 IFRS 4 Share-based Payment Stock appreciation rights measured at fair value instead of intrinsic value. Business Combinations No amortisation of goodwill; annual impairment test required. Insurance Contracts Current US GAAP accounting for insurance contracts can be continued. P&L Impact Measurement change generally leads to increased personnel expenses. Positive p&l impact due to discontinued amortisation. Effects from annual impairment test will be calculated based on plan data in mid 25. No material impact. Disclosure impact Total amount of fair value for long term incentive plan liability separately disclosed. Comparable to 24 disclosure. Extensive disclosure requirements according to IAS 36. Disclosure requirements of IFRS 4 for the most parts already met; Munich Re will nevertheless review and enhance disclosures where appropriate. 58 BACKUP: Munich Re Group in total First-time application of new/revised IFRS standards in 25 (2) Standard IFRS 5 IFRS 16 (rev. 23) Non-current Assets Held for Sale and Discontinued Operations Reclassification and remeasurement of noncurrent assets held for sale. Property, Plant and Equipment Each significant part of an item of property, plant and equipment is depreciated separately (component approach). P&L Impact Remeasurement can only result in valuation at or below previous carrying amount; this tends to result in negative p&l impact. At this point calculation is still in progress. Disclosure impact Held for sale assets and results of discontinued operations have to be presented separately. Changes in disclosures not material. 59

31 BACKUP: Reinsurance segment Income statement Q4 24 Q4 23 in % Gross premiums written 4,919 5, Net earned premiums 5,89 5, Investment result 1,137 1, Total income 6,286 7, Total expenses* 5,84 6, Result before amortisation of goodwill* 482 1, Amortisation of goodwill Operating result before taxes on income* 453 1, Taxes on income* Minority interests in earnings Group result 274 1, * Adjusted after reallocation of "other tax" from "tax" to "other expenses". 6 BACKUP: Reinsurance segment Investments* Life and health in % Real estate 731 1, Investments in affiliated enterprises Investments in associated enterprises Mortgage loans and other loans Other securities held to maturity Other securities available for sale 15,23 13, ,373 4, Other securities held for trading Other investments 6,818 6, Total 27,885 26, * After elimination of intra-group transactions across segments. 61

32 BACKUP: Reinsurance segment Investment result* Life and health in % Real estate Investments in affiliated enterprises 1 2 Investments in associated enterprises Mortgage loans and other loans Other securities held to maturity Other securities available for sale Other securities held for trading Other investments Expenses for the management of investments Total 1,314 1, * After elimination of intra-group transactions across segments. 62 BACKUP: Reinsurance segment Investments* Property-casualty in % Real estate 928 1, Investments in affiliated enterprises Investments in associated enterprises Mortgage loans and other loans Other securities held to maturity Other securities available for sale 24,77 24, ,473 6, Other securities held for trading Other investments 8,354 8, Total 4,326 42, * After elimination of intra-group transactions across segments. 63

33 BACKUP: Reinsurance segment Investment result* Property-casualty in % Real estate Investments in affiliated enterprises 4 9 Investments in associated enterprises Mortgage loans and other loans Other securities held to maturity 1 Other securities available for sale 1,99 1, Other securities held for trading Other investments Expenses for the management of investments Total 2,2 1, * After elimination of intra-group transactions across segments. 64 BACKUP: Reinsurance segment Stable exposure to natural catastrophes in non-life reinsurance segment Top 5 natural catastrophe exposures gross estimated hundred-year event losses in bn European Windstorm US SE / Carib. Hurricane Japan Earthquake US Los Angeles Earthquake US San Francisco Earthquake 65

34 BACKUP: Primary insurance segment Income statement Q4 24 Q4 23 in % Gross premiums written 4,561 4,61.9 Net earned premiums 4,229 4, Investment result 1,285 1, Total income 5,899 6, Total expenses* 5,797 6, Result before amortisation of goodwill* Amortisation of goodwill Operating result before taxes on income* Taxes on income* Minority interests in earnings Group result * Adjusted after reallocation of "other tax" from "tax" to "other expenses". 66 BACKUP: Primary insurance segment Investments* Life and health in % Real estate 6,634 6, Investments in affiliated enterprises Investments in associated enterprises 1,726 2, Mortgage loans and other loans 19,279 15, Other securities held to maturity Other securities available for sale 57,791 56, ,822 1, Other securities held for trading Other investments 2,913 2, Total 99,975 94, * After elimination of intra-group transactions across segments. 67

35 BACKUP: Primary insurance segment Investment result* Life and health in % Real estate Investments in affiliated enterprises 34 3 <1,. Investments in associated enterprises Mortgage loans and other loans Other securities held to maturity Other securities available for sale 2,855 3, Other securities held for trading Other investments Expenses for the management of investments Total 4,366 3, * After elimination of intra-group transactions across segments. 68 BACKUP: Primary insurance segment Investments* Property-casualty in % Real estate Investments in affiliated enterprises Investments in associated enterprises Mortgage loans and other loans Other securities held to maturity Other securities available for sale 4,533 4, ,999 1, Other securities held for trading Other investments Total 9,382 8, * After elimination of intra-group transactions across segments. 69

36 BACKUP: Primary insurance segment Investment result* Property-casualty in % Real estate Investments in affiliated enterprises 3 3 Investments in associated enterprises Mortgage loans and other loans Other securities held to maturity Other securities available for sale Other securities held for trading Other investments Expenses for the management of investments Total * After elimination of intra-group transactions across segments. 7 BACKUP: Primary insurance segment ERGO Income statement Group total in % Gross premiums written 15,569 15,566. Net earned premiums 13,736 13,7.3 Investment result 4,283 4, Total income 18,686 18,741.3 Total expenses 18,158 18, Result before amortisation of goodwill >1,. Amortisation of goodwill Operating result before taxes on income Taxes on income Minority interests in earnings Group result 22 1,431 71

37 BACKUP: Primary insurance segment ERGO Income statement Life in % Gross premiums written 6,767 6, Net earned premiums 5,954 6, Investment result 3,167 3, Total income 9,755 9, Total expenses 9,654 9, Result before amortisation of goodwill Amortisation of goodwill Operating result before taxes on income Taxes on income Minority interests in earnings Group result BACKUP: Primary insurance segment ERGO Income statement Health in % Gross premiums written 4,537 4,547.2 Net earned premiums 4,291 4,298.2 Investment result Total income 5,219 5, Total expenses 5,89 5,65.5 Result before amortisation of goodwill Amortisation of goodwill Operating result before taxes on income Taxes on income Minority interests in earnings Group result

38 BACKUP: Primary insurance segment ERGO Income statement Property-casualty in % Gross premiums written 3,445 3, Net earned premiums 2,676 2, Investment result Total income 3,38 2, Total expenses 2,598 2,585.5 Result before amortisation of goodwill Amortisation of goodwill Operating result before taxes on income Taxes on income Minority interests in earnings Group result Combined ratio in % BACKUP: Primary insurance segment ERGO Life New business development in Germany Single and regular premiums Split of regular premiums 1,95 1,179 12% 25% 1, % 834 Single Regular Other Riester Unit L. Annuity Endow. Annualised premium equivalent Sum of premiums* in bn % % * Expected sum of premiums over the life of contract. 75

39 BACKUP: Asset management Investments* Asset management in % Real estate Investments in affiliated enterprises Investments in associated enterprises Mortgage loans and other loans Other securities held to maturity Other securities available for sale Other securities held for trading 1 1. Other investments Total * After elimination of intra-group transactions across segments. 76 BACKUP: Asset management Investment result* Asset management in % Real estate 24 1 Investments in affiliated enterprises Investments in associated enterprises Mortgage loans and other loans 1 1 Other securities held to maturity Other securities available for sale Other securities held for trading Other investments 32 2 Expenses for the management of investments Total * After elimination of intra-group transactions across segments. 77

40 Appendix Financial calendar Contacts Disclaimer 78 Appendix Financial calendar 28 April 25 Annual General Meeting, Munich 29 April 25 Dividend payment 9 May 25 Interim report at 31 March 25 incl. Embedded Value Figures June 25 Investors' Day 4 August 25 Interim report at 3 June 25 7 November 25 Interim report at 3 September 25 79

41 Appendix For information please contact Pedro Janeiro Martins Head of Investor Relations Tel.: +49 () 89/ pmartins@munichre.com Ralf Kleinschroth Tel.: +49 () 89/ rkleinschroth@munichre.com Robert Kinsella Tel.: +49 () 89/ rkinsella@munichre.com Ingrid Grunwald Tel.: +49 () 89/ igrunwald@munichre.com Frank Kopfinger Tel.: +49 () 89/ fkopfinger@munichre.com Fax: +49 () 89/ InvestorRelations@munichre.com Internet: 8 Appendix Disclaimer This report 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 forwardlooking 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. 81

42 Glossary Accumulation The situation where a significant number of risks insured or reinsured with the same company may be affected simultaneously by a loss event. Actuarial interest rate Interest that the life insurance undertaking uses to calculate the provision for future policy benefits and usually also premiums and is guaranteed for the whole policy period. If high returns are achieved, customers receive the bulk of this in the form of policyholder bonus payments. Asset-liability management Management of a business in a way that coordinates decisions on assets and liabilities. Specifically, the ongoing process of formulating, implementing, monitoring, and revising strategies related to assets and liabilities in an attempt to achieve financial objectives for a given set of risk tolerances and constraints. Average regular return on investments Regular income from investments less regular expenditure for investment in relation to the meanaverage investment portfolio. Investments from unit-linked life insurance and related income and expenditure are not included here. Balanced scorecard Strategy-implementation tool in which strategic objectives and initiatives (financial and nonfinancial) are set out in a table and linked with one another. Short-term milestones help in monitoring the achievement of objectives. Combined ratio Ratio, in per cent, of the sum of net claims expenses plus net operating expenses to net earned premiums. The sum of the loss ratio and the expense ratio. Consolidation Combining the items from the individual financial statements of the companies belonging to the Group into one consolidated financial statement, in which items involving intra-group transactions are eliminated. Corporation tax Tax on earnings levied exclusively on legal persons (corporations). Current tax expenses Tax payments (with impact on liquidity) actually incurred for the past business year (possibly also for previous years). Deferred tax assets/liabilities Future relief or tax burdens due to temporary differences between accounting on the basis of national tax law and IAS/IFRS (with no impact on liquidity). Direct crediting Part of profit participation that is credited directly to customers and debited from the result of the respective current business year. Expense ratio Ratio, in per cent, of operating expenses to earned premiums.

43 Facultative reinsurance The reinsurer assumes a share of selected individual risks. The primary insurer can offer an individual risk in reinsurance, which the reinsurer for its part can either accept or decline (see Obligatory reinsurance). Fast close The sum of organisational and technical improvements in business processes that serve to accelerate publication of a company's quarterly and annual financial statements. Financial Accounting Standards (FAS) US accounting regulations that give detailed rulings on individual accounting questions and which must be complied with by listed companies that prepare accounts in accordance with US GAAP. Financial reinsurance Forms of reinsurance in which the transfer of underwriting risk from the insurer to the reinsurer is significantly restricted, being replaced by financing mechanisms. In view of the accounting regulations in many markets, it is no longer a customary form of reinsurance (see Finite risk reinsurance). Finite risk reinsurance Form of reinsurance in which the risk transfer from insurer to reinsurer is combined with a risk financing function. The focus here is on business-management and accounting aspects. The desired objectives are achieved by, among other things, the assumption of a limited amount of risk by the reinsurer, result-sharing with the insurer, multi-year contracts and the consideration of the time value of money. Goodwill Any excess of the purchase price of a subsidiary over the acquirer s interest in the fair value of the net assets as at the acquisition date. Goodwill is amortised over its useful life. Goodwill resulting from business combinations agreed to on or after 31 March 24 is not amortised, but is tested and written down for impairment if necessary. Impairment charges In examining the need for write downs, we have eliminated insignificant or only short-term losses in value. If a stock s price has been 2% below or for at least six months permanently under the (amortised) acquisition costs at balance sheet date, this is a strong indication that the impairment in value is not only temporary. We look at each individual case. Integrated Risk Management The integrated, and group wide management of financial and non-financial risks. It plays a dual role in both protecting the shareholder's capital from large diminution (e.g. through strict limit systems and comprehensive accumulation control) and also in optimising the return on that capital through active capital management, portfolio optimisation and asset liability management. International Accounting Standards (IAS)/ International Financial Reporting Standards (IFRS) Standards formulated by the IASB with the intention of achieving internationally comparable preparation and presentation of financial statements. Since 22 the standards adopted by the IASB have been referred to as "International Financial Reporting Standards (IFRS)". Until existing standards are renamed, they continue to be referred to as "International Accounting Standards (IAS)".

44 Layer Term used in excess-of-loss reinsurance to denote a stratum of cover. Its point of attachment and extent is defined in terms of the sum insured. Example: 5, in excess of 1, refers to the layer 1, to 6,. Loss ratio Ratio, in per cent, of claims expenses to earned premiums. Market risk Loss of value resulting from fluctuations in the future development of share prices, interest, exchange rates and the price of raw materials. Market value The publicly listed market price obtainable for an asset in an active market (especially stock market price). Maturity bonus (primary life) The declared maturity bonus is due on expiry of the respective insurance policy or deferment period. The maturity bonus of the policy is made up of the declared bonus rates due on maturity of the policy (with a normal maturity bonus it is related to the sum of annual maturity bonus shares of insurance) that accrue with the accumulated rate of interest declared up to the calculation date. Net asset value Measurement of the fair value of companies. The starting point is the proportional equity capital of the company to be valued, plus the valuation reserves. Net return on investments Regular income and the extraordinary result from investments less all expenditure for investment in relation to the mean-average investment portfolio. Investments from unit-linked life insurance and related income and expenditure are not included here. Non-proportional reinsurance Here the reinsurer assumes payment of the primary insurer's losses above a defined amount. The calculation of the reinsurance premium is based on claims experience with the type of business concerned. Obligatory reinsurance Although obligatory reinsurance agreements contain agreed periods of notice, they are generally concluded for an unlimited duration. These treaties between insurers and reinsurers may therefore run for long periods. (see Facultative reinsurance). Overall profit (primary life) The profit generated by the insurance undertaking during the business year less directly credited profit shares. Essentially, the profit is made up of the result from interest, risk and costs as well as from the extraordinary result from investments. The bulk of the overall profit is allocated to the provision for premium refunds and reserved for future bonus payments to customers. Own funds ratio Insurance undertakings are legally bound to keep free and unburdened funds available to ensure that they can always meet their contractual obligations. These are in particular equity capital and the not yet stipulated part of the provision for premium refunds. The own funds ratio is determined by its relation to the volume of business as a whole.

45 Policy reserve fund Investments that serve to safeguard in particular the provision for future policy benefits. The policy reserve fund guarantees that obligations under insurance contracts can be fulfilled and therefore is subject to special regulations with regard to security, profitability, liquidity, mix and spread. Premium The amount that has to be paid for the insurance cover provided by an insurer. It may be paid as a regular or single premium. In the case of products that are largely of an investment nature (e.g. financing treaties and unit-linked life insurance) it only includes - under IAS - the amount serving to cover the risk and the costs. In IAS financial statements there are no "premiums from the provision for premium refunds" either. Premiums written means all premium income that has become payable in the business year. The portion of this premium income that constitutes payment for insurance cover in the business year is referred to as earned premiums. Property-casualty Umbrella term for all insurance business that is not life or health insurance, e.g. liability, motor and fire insurance. Proportional reinsurance In proportional reinsurance, the sum insured written by the primary insurer is divided proportionally between the primary insurer and the reinsurer, and the reinsurer is allocated a corresponding share of the premiums and claims. Provision for future policy benefits To ensure that obligations from insurance contracts can be met at any given time, a provision for future policy benefits is established for each and every contract. The provision for future policy benefits is determined on the basis of actuarial methods. Provision for premium refunds Provision in which amounts for future policyholder bonuses are reserved (see Overall profit). Rating Standardised assessment of the credit standing of debt instruments and companies by specialised independent rating agencies. Renewals Although obligatory reinsurance agreements contain agreed periods of notice, they are generally concluded for an unlimited duration. These treaties between insurers and reinsurers may therefore run for long periods. In such cases, the treaty conditions are usually adjusted in renewal negotiations each year, and the treaties renewed. Return on equity (RoE) Indicator for measuring an enterprises financial performance. It is calculated by dividing the result for the period by the average shareholders equity employed. RfB Rückstellung für Beitragsrückerstattung (RfB) = Provision for premium refunds. Risk The possibility of negative budget variance inherent in any economic activity. In insurance, it is also understood to mean the possibility of a loss being caused by an insured peril. In addition, insured objects or persons are frequently referred to as risks.