Munich Re Group. Merrill Lynch CEO Banking & Insurance Conference. Delivering Growth in a Riskier World

Transcription

1 Munich Re Group Merrill Lynch CEO Banking & Insurance Conference Delivering Growth in a Riskier World Nikolaus von Bomhard Chairman of the Board of Management 4 October 2007 Agenda Overview Outlook 2

2 Overview Changing Gear programme Basis for profitable growth Changing Gear programme Ambitious growth targets Returning > 8bn to shareholders Best in class Capital efficiency Average EPS growth >10% p.a. 3 Overview Changing Gear programme EPS growth >10% p.a. until 2010 EPS in Changing Gear programme e 2 Average EPS growth >10% p.a. Ambitious growth targets Best in class Capital efficiency > e 1 Adjusted due to first-time application of IAS 19 (rev. 2004). 2 Based on assumed IFRS earnings (excl. minority interests) of ~ 3bn and million shares (weighted average). 2 Munich Re target 2010 Most profitable among Top 5 global reinsurers Market leadership in international health with integrated approach Expansion into primary insurance growth markets/segments Strategic risk management maximising reward for volatility 4

3 Agenda Overview Outlook 5 Property-casualty Changing Gear: Realisation of untapped profit pools Reinsurance profits Illustrative Changing Gear > 250m Impact of 15 growth initiatives Current reinsurance portfolio Market conditions make profit growth out of traditional reinsurance operations difficult Profit growth ambition to be fuelled out of innovative initiatives 15 defined growth initiatives Address whole of reinsurance, e.g. Opening markets Product adjacencies 1 Product development 2 Forward integration 6

4 Flexible occupation of value chain Traditional value chain Illustrative Traditional Marketing / Sales involvement of reinsurer Underwriting Reinsurance as back-end underwriter Policy handling and capacity provider only Optimized value chain Claims handling Capacity provider Main capacity provider Marketing / Sales Munich Re Policy handling Munich Re Capacity provider Munich Re All other value chain elements occupied by other market participants Illustrative Flexible occupation of value chain elements depending on business model Expanding reinsurance business model by leveraging traditional capabilities 7 Occupying strategic growth areas along market boundaries Illustrative Business Specialty Standard e.g. Three Lions Underwriting Ltd. MGA Co-insurance Small / Personal Middle-ground =traditional reinsurance range e.g. Munich-American RiskPartners, Bell & Clements Large / Commercial Direct UW & MGA Risk 8

5 Different business models depending on value chain involvement Business model Type Value chain MGA Co-Insurance Traditional Risk / Client Customer Customer Customer Marketing Sales Broker Insurer Reinsurer Broker Product development Underwriting Claims Mgt. Policy handling MGA Policy issuance Insurer Capacity provider Compliance Co-Insurer Fronter Reinsurance part of value chain ALM Reinsurer Reinsurer 9 MGA business model: Expanding reinsurance business model MGA business model Policyholder Policyholder Policyholder Policyholder Policyholder Policyholder Coverholder Binding agreement Reinsurance treaty Premium Claim Coverholder Premium Claim MGA Premium Claim Insurer (Fronter) Premium Claim Reinsurer Coverholder Commission and profit commission Commission and profit commission Fronting Fee 10

6 Growing importance for Munich Re s portfolio Business model Competitive edge Co-insurance with primary insurers Direct large corporate risk underwriting (MARP) MGA (Managing General Agents) business in Commercial lines Personal lines Niche specialty segments Direct access to retail clients Efficient use of capital Leverage of reinsurance know-how Distribution advantage Enhanced flexibility & efficiency Access to niche clients Gross premiums written of value chain optimised approaches in m 3,000 CAGR ~22% 2,000 1, e 11 Stringent control mechanisms are key for success Management control Agency business Underwriting control Claims control 12

7 Acquisition of Bell & Clements (B&C) platform for organic growth Previous co-operation with B&C Premiums in m CAGR: 14 % e 2008e 2009e 2007: Continuation of the co-operation with complete acquisition of Bell & Clements Rationale for the acquisition of B&C Component of our strategy to shift reinsurance closer to original risks Development of a specific, profitable and clearly defined portfolio Securing a profitable book of business that Munich Re has developed together with B&C Platform for consolidation and expansion 1 Munich Re's premium share from co-operation with B&C including Three Lions joint venture. 13 Agenda Overview Outlook 14

8 Outlook Changing Gear Moving straightaway in the right direction Capital management 2007 Summary and outlook 2007 Q m share buy-back executed Strong half-year result Since Q bn buy-back more than halfway through Q bn hybrid bond issued For business year 2007 > 1bn dividend Full-year guidance increased to bn Well on the way to reaching Changing Gear targets 15 Appendix Financial calendar Contacts Disclaimer 16

9 Appendix Financial calendar 5 November 2007 Interim report as at 30 September December 2007 Investors' Day on ERGO, London 19 February 2008 Investors' Day on property-casualty reinsurance, London 25 February 2008 Balance sheet press conference for 2007 financial statements 17 April 2008 Annual General Meeting 18 April 2008 Dividend payment 8 May 2008 Interim report as at 31 March 2008 Analysts' conference, Munich 6 August 2008 Interim report as at 30 June October 2008 Investors' Day on life reinsurance, London 7 November 2008 Interim report as at 30 September Appendix For information please contact Sascha Bibert Head of Investor & Rating Agency Relations Tel.: +49 (89) sbibert@munichre.com Dr. Thomas Dittmar Tel.: +49 (89) tdittmar@munichre.com Robert Kinsella Tel.: +49 (89) rkinsella@munichre.com Andreas Silberhorn Tel.: +49 (89) asilberhorn@munichre.com Ralf Kleinschroth Tel.: +49 (89) rkleinschroth@munichre.com Ingrid Grunwald Tel.: +49 (89) igrunwald@munichre.com Frank Kopfinger Tel.: +49 (89) fkopfinger@munichre.com Münchener Rückversicherungs-Gesellschaft Königinstrasse 107, München, Germany Fax: +49 (89) IR@munichre.com Internet: 18

10 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 forward-looking 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. 19