Balance sheet press conference for the 2011 financial year. Düsseldorf, 29 March 2012 Torsten Oletzky, Christoph Jurecka

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1 Balance sheet press conference for the 2011 financial year Düsseldorf, 29 March 2012 Torsten Oletzky, Christoph Jurecka Balance sheet press conference for the business year 2011 Düsseldorf, 29 March

2 Agenda Overview Torsten Oletzky page financial year in figures Christoph Jurecka page 5 Selected topics Torsten Oletzky page 13 2

3 Overview ERGO s steadfastness tested in 2011 Considerable turbulence on capital markets Broad public debate on actual and alleged misconduct ERGO achieved a stable result and is working consistently towards the implementation of the brand promise To insure is to understand 3

4 Agenda Overview Torsten Oletzky page financial year in figures Christoph Jurecka page 5 Selected topics Torsten Oletzky page 13 4

5 2011 financial year in figures Slight growth in premium income Total premiums and gross written premiums m +0.7% 20,131 20,270 Premium split by segments 1 m International 4,346 (21%) Travel insurance 488 (2%) Life Germany 5,074 (25%) +1.0% 18,457 18, Direct insurance 1,422 (7%) Property-casualty Germany 3,227 (16%) Health 2 5,975 (29%) Total premiums in Germany grew by 1.0% Premiums in international business stable in original currency but slightly down in euros 1) Sub-consolidated Group values 2) Including international health business 5

6 2011 financial year in figures Varying trends for premium income Life Germany (Total premiums) Health Property-casualty Germany m -3.2% m 3.5% m 2.1% , , , ,074 Single premiums and existing regular premium business down ,975 Rise in premiums due to premium adjustments and new business ,227 Commercial/industrial and motor business are growth drivers Direct insurance (Total premiums) m Travel insurance International (Total premiums) 4.7% m 13.5% m -2.1% , , ,422 Marked increase in supplementary insurance policies Double-digit growth repeated in Germany and abroad ,346 Life: Fewer single premiums; consolidation in property-casualty 6

7 2011 financial year in figures and for new business 1 Life (Germany) 2 Regular Single m Total premiums premiums APE , , Life (International) Regular Single m Total premiums premiums APE , , Δ -6.9% 6.2% -9.5% 1.0% Δ -4.6% 1.3% -6.0% -1.0% Health Germany 2 m Total Comprehensive insurance Δ -7.8% 18.4% -30.6% Supplementary insurance 1) Balance sheet view. 2) Incl. ERGO Direkt 3) Annual premium equivalent (APE = regular premiums + 10 % single premiums) Comments Life (Germany) Good growth in corporate pension business Life (International) Fewer single-premium business in Austria due to change in tax legislation Health (Germany) Comprehensive: Abolition of 3-year-waiting period as of 1 January 2011 with positive effect Supplementary: Last year's figures positively influenced by one single major contract; adjusted for that, growth of ~13% 7

8 2011 financial year in figures Higher combined ratio in Germany improvement in international business IFRS combined ratio Property-casualty Germany in % Loss ratio Expense ratio affected by weather-related claims and higher claims for liability insurance Combined ratio in Germany has been well below the Group s target of 95% for a number of years IFRS combined ratio Property-casualty International in % Loss ratio Expense ratio Upward trend for international business but level still not satisfactory Poland: Technical result back in profit Turkey: Challenges remain but first signs of turnaround 8

9 2011 financial year in figures Active asset management based on a balanced portfolio Investment split in % (book values) Split interest-bearing securities 1) (market values) bn Real estate Equities Structured products 1 (1) % Corporate bonds 5 (5) % Loans to policyholders/ mortgage loans 5 (5) % Government bonds 40 (40) % Participating interests Interestbearing Total 112bn Bank bonds 9 (8) % Covered bonds/ Pfandbriefe 40 (41) % Shift to more secure government bonds PIIGS exposure reduced, including by writing down Greek government bonds 1) Rounding differences possible at percentage values Participating interests sold: International DKV companies, Victoria Seguros in Portugal, real-estate interest in Singapore Hedging against low interest scenario gains in value 9

10 2011 financial year in figures Various one-off effects influence extraordinary investment result Investment result 1 m Ordinary result Extraord. result Result from unit-linked Ordinary result 5, , ,258 4, ,567 4,654 4,567 4,654 Interest-bearing 3) Equities/funds 4) Real estate Extraordinary result (excl. unit-linked) RoI Write-ups/write-downs Gains/losses on disposals 1) Investment result incl. unit-linked business 2) RoI (Return on Investment) based on the average amount of investments at market value 3) Incl. total expenses (asset management expenses) 4) Incl. participating interests 10

11 2011 financial year in figures Consolidated results stable m Life Germany Negative impact from write-downs on deferred acquisition costs due to lowering of interest-rate prospects Health Sale of international DKV companies to Munich Re with positive effect on the result Property-casualty Germany Higher combined ratio and lower investment result (partly due to the sale of D.A.S. Versicherungs-AG to ERGO AG in the previous year) Direct insurance Very strong result in previous year Travel insurance -4 4 Result improvement measures have been introduced International Operating result clearly positive again, property-casualty business with improved combined ratio; lower impairment losses on goodwill Consolidation/ others Consolidation of result from sale of D.A.S. Versicherungs-AG to ERGO AG (in previous year) and sale of real-estate interest in Singapore (in reporting year) ERGO Group

12 Agenda Overview Torsten Oletzky page financial year in figures Christoph Jurecka page 5 Selected topics Torsten Oletzky page 13 12

13 Selected topics Backdrop of low interest rates raises considerable challenges for life insurance Bund 10 years Maximum technical interest rate 6% 5% 4% Portfolio safeguarded against sustained period of low interest rates by means of extensive hedging since % 2% 1% Dez 00 Dez 02 Dez 04 Dez 06 Dez 08 Dez 10 Development of new products with novel guarantee concepts market introduction planned for

Selected topics Consolidating private health insurance, addressing aspects subject to criticism Our conviction: The co-existence of statutory and private health insurance is better than any of the

initiative on mydkv launched increased level of service and transparency Supplementary Ergänzungsversicherung insurance Extension Einführungof von supplementary Ergänzungsversicherungen insurance

14 Selected topics Consolidating private health insurance, addressing aspects subject to criticism Our conviction: The co-existence of statutory and private health insurance is better than any of the alternatives currently being discussed Comprehensive insurance Stronger focussing on high-grade comprehensive insurance business entry tariffs with reduced benefits discontinued Web-based service initiative on mydkv launched increased level of service and transparency Supplementary Ergänzungsversicherung insurance Extension Einführungof von supplementary Ergänzungsversicherungen insurance policies nach Art by der type Schaden-/Unfallversicherung of property-casualty insurance New Innovatives product Produkt instant Zahnersatz dentures Sofort Introduced Markteinführung 4/2011 4/ , policies Policen soldverkauft Claims Schadenentwicklung trend much as i.w. expected gemäß Annahmen amounts somewhat Schäden zu higher Beginn at beginning, etwas höher, numbers Frequenz lower niedriger 14

Selected topics Property-casualty insurance steady development Gewerbe-/Industrieversicherung Commercial/industrial insurance Weiterhin Continues Wachstumstreiber to growth driver bei for ERGO Growth

15 Selected topics Property-casualty insurance steady development Gewerbe-/Industrieversicherung Commercial/industrial insurance Weiterhin Continues Wachstumstreiber to growth driver bei for ERGO Growth Wachstumsinitiative for internationales commercial/industrial G/I-Geschäft gestartetbusiness launched Business Niederlassungen in Austria in and Österreich the Netherlands und den transferred Niederlanden to branch in 1Q12 offices eröffnet in 1Q12 weitere more in branch Planungoffices planned Motor insurance Trend towards higher premiums Higher frequency of claims 2011 especially due to regional severe weather events Technical result situation still unsatisfactory 15

16 Selected topics Programme of compliance / sales initiatives in full swing Topic Status Strengthening of compliance function New rules on incentives, incl. centralisation of procurement Code of conduct for independent sales agents ERGO Pro (previously HMI) quality offensive Improvement of product information sheets New regulations for advice documentation Mystery Shopping Online sales partner evaluation Single consultation process New Compliance Officer active since 1/2012 build-up of unit in progress Implemented (7/2011 and 8/2011) Implemented (8/2011) In progress, measures to be implemented by end of 2012 Under way (primarily new products) Project Advice started First test series implemented from 8/2011 to 1/2012 Concept decided, realisation 6/2012 Kick-off has taken place 16

17 Selected topics Status quo of major specific issues from 2011 Incorrect Riester form in 2005 Initial customer information in July 2011 Specific amounts per individual contract notified in December ,137 contracts adjusted Total amount 981,000 (including interest) Company pension schemes Follow-up to issues raised at press conference of 8 December 2011 current situation: Total checked Collective agreements Individual instead of collective agreements Individual alongside collective agreements 40,152 77, Personal accident ROP policies 2009/2010 Potentially critical E-ee 1 : 409 E-er 2 : 135 All 4,952 customers affected by switch from life cover have been contacted 449 replies Outcome in terms of customer wishes: 23 customers wanted to cancel ROP accident policy 25 customers wanted to cancel ROP accident policy and reinstate life insurance Σ E-er 2 : 750 Prior clarification Letter in only ~3% of cases did customers require further dialogue Customer visit initial contact generally made; 30% completed, retroactive amendment in 6 cases so far 1) E-ee = employee 2) E-er = employer (customer) 17

by introducing branch structure CEE: Expansion through cooperation with UniCredit India: Maintain growth of HDFC

18 Selected topics Increase net income of international business Turkey: Make turnaround also visible in terms of results Poland: Achieve technical profits with continuing strong growth Baltic States: Further promote integration by introducing branch structure CEE: Expansion through cooperation with UniCredit India: Maintain growth of HDFC ERGO China: Life-insurance joint venture with SSAIH Make progress in licencing process South Korea: Improve net income 18

Selected topics To insure is to understand 2011: ERGO Customer Advocate, Customer Advisory

(8/2011), legal advice (10/2011), home contents (1/2012) already implemented.

comprehensive insurance with launch of unisex products (12/2012) Life: Extensive legal

19 Selected topics To insure is to understand 2011: ERGO Customer Advocate, Customer Advisory Board, Customer Workshop Implement market strategy internationally Rebranding in Greece (6/2011) Strengthening of ERGO brand in Poland (2011) Introduction of ERGO brand in Austria (4/2012) Implement clear language criteria Property-casualty: private liability (7/2011), road assistance (8/2011), legal advice (10/2011), home contents (1/2012) already implemented. Further lines of business to follow Health: Start with supplementary insurance (Q2/2012), in comprehensive insurance with launch of unisex products (12/2012) Life: Extensive legal requirements do not leave much leeway; solution: additional clear language section (2013) 2012: ERGO Customer Report, Clear Language Study 19

20 Summary Conclusion 2011 result satisfactory given difficult market conditions Increase in result to about 400 million sought in 2012 Continue to implement To insure is to understand increase quality of advice and clarity of language 20

Quarterly statement as at 31 March 2017

Quarterly statement as at 31 March 2017 http://www.presentationworks.de Image: Getty Images/fStop 9 May 2017 Jörg Schneider Agenda 1 Munich Re (Group) 2 3 Reinsurance 12 2 ERGO 8 4 Outlook 17 2 Munich Re (Group) Financial highlights Q1 2017