Deutsche Bank German, Swiss & Austrian Conference. Dr. Immo Querner 18 June 2015

Transcription

1 Deutsche Bank German, Swiss & Austrian Conference Dr. Immo Querner 8 June 205

2 Founded as a lead insurer by German corporates Group structure History Large German corporates, e.g. Free float V.a.G. German Mittelstand Private policy holders 4.5% 79.0% 6.5% Industrial Lines Including employee shares Retail Germany Retail International Reinsurance (P/C and Life/Health) Foundation as Haftpflichtverband der deutschen Eisen- und Stahlindustrie in Frankfurt Relocation to Hannover Companies of all industry sectors are able to contract insurance with HDI V.a.G. Foundation of Hannover Rückversicherungs AG Diversification into life insurance IPO of Hannover Rückversicherung AG Renaming of HDI Beteiligungs AG to Talanx AG Start transfer of business from HDI V.a.G. to individual Talanx subsidiaries Acquisition of Gerling insurance group by Talanx AG IPO of Talanx AG Listing at Warsaw Stock Exchange Strong roots: originally founded by German corporate clients; HDI V.a.G still key shareholder 2 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

3 Four divisions with a strong portfolio of brands Industrial Lines Retail Germany Retail International Reinsurance (P/C and Life/Health) Corporate Operations Integrated international insurance group following a multi-brand approach 3 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

4 International footprint and focussed growth strategy International presence International strategy by divisions Industrial Lines Local presence by own risk carriers, branches and partners create efficient network in >30 countries Key target growth regions: Latin America, Southeast Asia/India, Arabian Peninsula Retail International Target regions: CEE (incl. Turkey) and Latin America # 2 insurer in Poland 2 # 5 motor insurer in Brazil 3 # 2 motor insurer in Chile 4 Presence in countries Total GWP: 29.0bn (204) 204 GWP: 53% in Primary Insurance (200: 5%), 47% in Reinsurance (200: 49%) Group wide presence in >50 countries ~2,300 employees in 204 Reinsurance Global presence focussing on Western Europe, North- and South America as well as Asia ~5.000 customers in >50 countries By branches, agencies, risk carriers, representative offices 2 In terms of GWP; KNF report In terms of GWP based on local GAAP; Siscorp 4 In terms of GWP; SVS report 203 Global network in Industrial Lines and Reinsurance leading position in retail target markets 4 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

5 Among the leading European insurance groups Top 0 German insurers Top 0 European insurers German insurers by global GWP (204, bn) European insurers by global GWP (204, bn) Allianz 5.7 Allianz 5.7 Munich Re 48.8 AXA Generali R+V Munich Re 48.8 Debeka 9.3 Prudential 2, Vk Bayern Zurich 39.3 HUK 5.6 CNP Signal Iduna 5.5 Crédit Agricole Gothaer W&W 3.9 Aviva figures 2 Preliminary 204 figures 3 Gross premiums earned Listed insurers Source: Company publications, as of 8th March 205 Third-largest German insurance group with leading position in Europe 5 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

6 Regional and segmental split of GWP and EBIT GWP by regions 204 (consolidated Group level) GWP by segments 204 5% 7% 3% 25% 8% 32% Germany Central and Eastern Europe including Turkey (CEE) Rest of Europe North America Latin America RoW 7% 4% 20% 8% 3% Industrial Lines Retail Germany Retail International Non-Life Reinsurance Life/ Health Reinsurance GWP by regions 204 (Primary Insurance) EBIT by segments 204,2 7% 4% 3% 9% 2% 55% Germany Central and Eastern Europe including Turkey (CEE) Rest of Europe North America Latin America RoW 0% 6% 3% 5% Industrial Lines Retail International Non-Life Reinsurance Life/ Health Reinsurance Corporate Operations 45% Well diversified sources of premium and EBIT generation Adjusted for the 50.2% stake in Hannover Re 2 Calculation excludes Retail Germany, which contributes a negative EBIT of Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

7 B2B competence as a key differentiator Strategic focus on B2B and B2B2C Excellence in distribution channels Industrial Lines Core focus on corporate clients with relationships often for decades Blue-chip client base in Europe Capability and capacity to lead international programs Bancassurance Brazil Retail Germany Market leader in Bancassurance Market leader in employee affinity business Automotive Retail International ~35% of segment GWP generated by Bancassurance Distribution focus on banks, brokers and independent agents Brokers Retail Industrial/Reinsurance Reinsurance Typically non-german business generated via brokers Unique strategy with clear focus on B2B business models Employee affinity business Samples of clients/partners Superior service of corporate relationships lies at heart of our value proposition 7 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

8 Opportunities for Group-wide synergies Industrial Lines Retail Germany Retail International Reinsurance Selected examples Securing reinsurance support Opportunity for higher retention on Group level Fronting arrangements to expand global footprint Market entry support Support acquisition and product distribution Leveraging expertise across the Group Synergy benefits from shared back-office, IT and reinsurance procurement Group-wide asset management unit (Talanx Asset Management) Right of first choice for Hannover Re to underwrite business from Talanx s primary insurance companies Retail International acting as entry point and (licensed) platform to write industrial risk in new markets Business relationships by Industrial Lines help to sell retail policies (employee affinity business, auto dealerships) Leveraging expertise across Talanx Group ( best practice ), e.g. product development, underwriting capabilities, Bancassurance know-how Group-wide cooperation and best practice approach creates value for Talanx Group 8 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

9 Key Pillars of our risk management 2 3 Asset risk is limited to less than 50% of our SCR (solvency capital requirement) Generating positive annual earnings with a probability of 90% Sufficient capital to withstand at least an aggregated 3,000-year shock 9 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

10 Focus on insurance risk Risk components of Talanx Group Comments 4% 6% 35% 45% Operational risk Underwriting risk life Non-life risk Market risk 2 Total market risk stands at 45% of solvency capital requirements, which is comfortably below the 50% limit Self-set limit of 50% reflects the dedication to primarily focus on insurance risk Non-life is the dominating insurance risk category, comprising premium and reserve risk, NatCat and counterparty default risk Equities ~% of investments under own management GIIPS sovereign exposure 2.6% of total assets (FY204) Talanx Group Figures show approximate risk categorisation, in terms of solvency capital requirements, of the Talanx Group after minorities, after tax, post diversification effects as of 2/204 2 Refers to the combined effects from market developments on assets and liabilities Market risk sensitivity (limited to less than 50% of solvency capital requirement) is deliberately low 0 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

11 2 Diversification of business model leads to earnings resilience Talanx Group net income Talanx Group net income ( m) Talanx Group and predecessors net income # of loss making competitors Net profit Net loss Net income of Talanx after minorities, after tax based on restated figures as shown in annual reports ( according to IFRS) 2 Adjusted on the basis of IAS 8 3 Top 20 European listed peers, each year measured by GWP;on group level; IFRS standards Source: Bloomberg, annual reports Robust cycle resilience due to diversification of segments Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

12 3 TERM (Talanx Enterprise Risk Model) 204 Capitalisation perspectives Economic View (shareholder perspective) 94% economic equity (no hybrids and surplus funds) after minorities inclusion of hybrids and surplus funds Policyholder & Debt investor View 27% economic capital (including hybrids and surplus funds) after minorities Regulatory View Comfortable capital position from all angles before minorities, with haircut operational risk modeled with standard formula economic capital (including hybrids and surplus funds) before minorities and (in consequence) 74% with haircut on Talanx s minority holdings operational risk modeled with standard formula Note: all calculations are based on a 99.5% confidence level. They all do not take any transitionals into account. We model with a dynamic volatility adjuster. The regulatory view focuses on the HDI-Group as the regulated entity with HDI V. a. G. as ultimate parent undertaking. 2 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

13 3 TERM 204 Own Funds, SCR and CAR by Division Own Funds, SCR and CAR by Division Own Funds by Division Equity by Division 2 SCR by Division 3 CAR by Division Industrial Lines % Retail Germany % 4 Retail International % Diversification between Primary Divisions (0.6) (0.5) Primary Insurance % Reinsurance % Corporate Functions (2.9) (2.5) 0.5 Diversification between Primary Divisions, Reinsurance and Corporate Functions (0.6) Talanx Group % Economic View (based on economic equity concept, excl. hybrids and surplus funds, after minorities) 2 IFRS equity after minorities 3 Solvency capital requirement; determined according to 99.5% security level, economic view, after minorities 4 The CAR in German Life stands below 00% if the economic equity concept is considered. It jumps well above 200% if the concept of economic capital (incl. hybrids and surplus funds) is applied All Divisions well capitalised 3 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

14 3 Solvency capital position The Solvency I perspective Solvency I capital position ( bn) 225% 20% 228% 243% Comments Talanx has extensive experience in innovative capital management As of 3 March 205, available funds include.2bn of subordinated debt 2 Goodwill of.2bn as of 3 March 205 (relative to shareholders equity excl. minorities of 8.7bn) As of 3 March 205, Solvency I ratio up to 243% Q 205 Available funds Solvency capital requirements Solvency I margin Talanx Group based on the solvency of HDI V.a.G. (HDI V.a.G. is the relevant legal entity for the calculation of group solvency from a regulatory perspective) 2.2bn of the Group s total subordinated debt ( 2.7bn) are eligible for Solvency I capital (after accounting for minority interest and capped by regulatory thresholds) Solid solvency and high-quality capital with relatively low goodwill supporting optimal balance sheet strength 4 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

15 Talanx Group FY204 target achievement Return on Investment 4.5% 4.0% 3.5% 3.0% 2.5% 2.0%.5%.0% 0.5% 0.0% 2.0% 0.0% 8.0% 6.0% 4.0% 2.0% 0.0% 4.2% 4.0% 4.3% 4.0% 4.% Outlook Rol 3.4% GWP growth in bn Net income and Payout in mn target ROE % 0.0% 0.2% 0.2% % Return on Equity Outlook GWP growth +2-3% +5.6% +3.0% Outlook RoE 9-0% 204 Outlook Net income 700m; pay-out ratio 35-45% Note: figures restated on the base of IAS8; 204 Outlook reflects targets as presented in November % +3.6% +2.6%.05 p.s %.20 p.s % dividend pay-out ratio.25 p.s % 5 5 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

16 Talanx Group Key financials Summary of FY204 Comments m, IFRS FY204 FY203 Change Gross written premium 28,994 28,5 +3% Net premium earned 23,844 23,3 +3% Net underwriting result (2,058) (,69) n/m Net investment income 4,44 3,792 +9% Operating result (EBIT),892,766 +7% Net income after minorities % Key ratios FY204 FY203 Change Combined ratio non-life insurance and reinsurance 97.9% 97.% 0.8%pts Return on investment 4.% 4.0% 0.%pts Balance sheet FY204 FY203 Change Investments under own management 96,40 86,30 +2% Goodwill,090,05 (%) Total assets 47,298 32,793 +% Technical provisions 0,09 9,77 +0% Total shareholders' equity 2,900,24 +6% Shareholders' equity 7,998 7,27 +2% Note: FY203 numbers adjusted on the basis of IAS8 GWP growth of 3.0% at the upper end of 204 outlook still dampened by currency effects (curr.- adj. growth rate:+3.6%). All segments apart from Retail Germany deliver positive GWP growth Deterioration in underwriting result is mainly due to balance sheet strengthening (FY204: 32m), largely in Retail Germany as indicated with the announcement of the disposal of the 5.03% stake in SwissLife. SwissLife disposal gain was 24m (203 effect of stake reduction was ~ 00m) Return on investment at 4.%, well above the 204 outlook hurdle ( 3.4%) 204 net income exceeds 203 level - especially when adjusting for the 203 base effect from the partial disposal of SwissLife stake Shareholders equity up to 7,998m, or 3.64 per share. Solvency I ratio up to 228.2% (FY203: 20.2%) Net income up balance sheet strengthening financed by disposal gains from SwissLife 6 Deutsche Results Presentation Bank German, FY204, Swiss 23 & March Austrian 205 Conference, 8 June 205 6

17 Q 205 results Key financials Summary of Q 205 m, IFRS Q 205 Q 204 Change Gross written premium 9,440 8,44 +2% Net premium earned 6,367 5,599 +4% Net underwriting result (389) (370) n/m Net investment income 996,00 (%) Operating result (EBIT) % Net income after minorities % Key ratios Q 205 Q 204 Change Combined ratio non-life insurance and reinsurance 96.5% 94.3% 2.2%pts Return on investment 3.6% 4.3% (0.7%)pts Balance sheet Q 205 FY 204 Change Investments under own management 02,22 96,40 +6% Goodwill,242,090 +4% Total assets 60,500 47,298 +9% Technical provisions 09,34 0,09 +8% Total shareholders' equity 4,37 2,900 +0% Shareholders' equity 8,747 7,998 +9% Comments Gross written premium up by 2.2% y/y, supported by currency effects (currency-adj. GWP: +6.8%); all segments contribute to growth Combined ratio rises by 2.2%pts to 96.5% mainly due to higher man-made losses in Industrial Lines and from storm Niklas. The latter affects all Primary Insurance segments and the Reinsurance business. Cost ratio is down by 0.7%pts Decline in investment income is due to lower extraordinary investment income (Q 205: 06m; Q 204: 26m), while ordinary investment result is up by ~ 78m Q 205 net income up by 35m vs. a rather losslight Q 204. Support from a positive currency impact in other income Shareholders equity has significantly increased to 8,747m, or per share (FY204: 3.64). Solvency I ratio up to 243% (FY204: 228%) Net income improves despite higher losses and lower extraordinary investment income shareholders equity up to 8.7bn 7 Deutsche Results Presentation Bank German, FY204, Swiss 23 & March Austrian 205 Conference, 8 June 205

18 Summary - Investment highlights Global insurance group with leading market positions and strong German roots Leading and successful B2B insurer Value creation through group-wide synergies Strong earnings resilience due to proven business model Dedication to focus on insurance rather than market risks Commitment to continuously fulfill a AA capital requirement by Standard & Poor s Dedication to pay out 35-45% of IFRS earnings to shareholders 8 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

19 Outlook for Talanx Group 205 Gross written premium % Return on investment > 3.0% Group net income 700m Return on equity ~ 9% Dividend payout ratio 35-45% target range The targets are based on an increased large loss budget of 290m (from 85m) in Primary Insurance 2 On divisional level, Talanx expects gross written premium growth of +2-5% in Industrial Lines, -5% premium decline in Retail Germany, +4-8% premium growth in Retail International and a moderate growth in Reinsurance Targets are subject to no large losses exceeding budget (cat), no turbulences on capital markets (capital), and no material currency fluctuations (currency) 9 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

20 20 Deutsche Bank German, Swiss & Austrian Conference, 8 June Segments -

21 Industrial Lines: Overview Key figures Share in 204 group GWP 8% 204 GWP: geographic split 20% 204 GWP: split by line 4% % 0% 3% 43% 4.0 bn 4.0 bn 42% Comments GWP grew by +5.% y/y in FY204 (currency-adjusted:+5.9%) Sustainable growth resulting from international activities, incl. North America and Asia Pacific 37% Germany Europe (excl. Germany) RoW 30% Property + Engineering Liability Motor Marine Accident Aviation Increased retention rate of 50.9% in FY204 (FY203: 44.5%) despite reinstatement premiums of 27m Key financials ( m) FY20 FY202 FY203 FY204 Change Gross written premium 3,38 3,572 3,835 4,03 +5% Net premium earned,375,608,744 2,022 +6% Net underwriting result (42) (6) n/m Net investment income % Operating result (EBIT) % Combined ratio 2 in % %pts Return on Equity in % %pts Profitability impacted by reinstatement premium ( 27m in FY204) and large losses, e.g. storm Ela in Q2 and various man-made losses Based on total GWP adjusted for 50.2% share in Hannover Re 2 Net, including income from interest on deposits Talanx is a leading European industrial lines insurer with global ambitions 2 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

22 Industrial Lines: Client relationships Relationships with large listed German companies (DAX-30) Selected client acquisitions since 203 Lead insurer in liability or property line; Lead insurer at least in one line Preferred lead insurer for large corporates 22 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

23 Industrial Lines HDI-Gerling network Foreign business by regions Global network (GWP 204 in m) International GWP 204: ~ 2.3bn* Netherlands 390 Switzerland 95 Spain 25 0% 2% USA 372 France 302 UK 79 Belgium 7 Italy 2 Austria % Argentina Hongkong Poland Turkey 65% Australia Bahrain India Ireland Portugal Russia Ukraine Hungary Europe (excl. Germany) Asia/Pacific America Africa Brazil 3 Bulgaria Japan Canada Sweden Singapour Uruguay Vietnam Chile Luxembourg Slovakia Denmark Mexico South Africa Greece New Zealand Czech Rep. * In total ~ 4bn GWP in Industrial Lines (incl. Germany) GWP shown for all entities with more than 00m GWP in Inkl. branches in Czech Republik, Slovakia and Hungary 3 Founded in August Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

24 Retail Germany: Overview Key figures Share in 204 group GWP 32% Life GWP 204: P&C GWP 203: split by line split by business 2% 6% 3% 8% 48% 53% 32% Traditional Unit-linked 5.4 bn Risk Products Other 8% 20% Motor Casualty.5bn Property Accident Key financials ( m) FY20 FY202 FY203 FY204 Change Gross written premium 6,70 6,829 6,954 6,890 (%) Net premium earned 5,46 5,50 5,605 5,630 +0% Net underwriting result (,258) (,425) (,55) (,953) n/m Net investment income,530,62,786,899 +6% Operating result (EBIT) (5) n/m Combined ratio 2 in % %pts Return on Equity in % (2.9) n/m Based on total GWP adjusted for 50.2% share in Hannover Re 2 Including interest income on funds withheld and contract deposits; net, property/casualty only Other Comments In line with targets, slight reduction in GWP, primarily reflecting a decline in traditional Life business (FY204: -.4%) FY204 included balance sheet strengthening of ~ 290m. Adjusting for this effect, FY204 combined ratio stood at 00.8% (Q4 204: 03.6%) Adjusted FY204 EBIT stood at 75m Decline in underwriting result due to balance sheet strengthening and higher capital gains (~ 0m) to finance ZZR. Higher ordinary investment income contributed to bottom line 204 ZZR allocation according to HGB - of 358m (Q4 204: 92m). In FY204 total ZZR stock rose to ~.bn Profitability numbers in Retail Germany affected by balance sheet strengthening measures 24 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

25 Retail Germany: Division breakdown Retail Germany Bancassurance Life P&C Share in 204 segment GWP Share in 204 segment GWP Share in 204 segment GWP 2% 3.bn 45% 2.3bn.5bn 33% Strategic focus on credit risk protection and annuities business Talanx cooperates through bancassurance agreements with two of the three pillars of the German banking market (private and public sectors) Strategic focus on corporate pension business, disability insurance and hybrid products ( Two Trust ) Non-bancassurance life business distributed via various external channels, own branches and tied agents Offers full product spectrum of P&C insurance products Distribution via various external channels, own branches (with focus on B2B business) and tied agents Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

26 Retail International: Overview Key figures Share in 204 group GWP 20% 35% 204 GWP: business split 204 GWP: geographic split 4.5 bn 4.5 bn 65% 27% Non-Life CEE/CIS 2 LatAm 2 Western Europe 2 Key financials ( m) FY20 FY202 FY203 FY204 Change Gross written premium 2,482 3,26 4,220 4,454 +6% Net premium earned,862 2,62 3,53 3,735 +6% Net underwriting result (42) 3 32 () n/m Net investment income % Operating result (EBIT) % Combined ratio in % %pts Return on Equity in % %pts Life 25% 48% Comments 204 GWP growth of 5.5% (curr.- adj.:+9.5%) supported by motor lines in Brazil & Mexico as well as by business in Poland 204 EBIT target of 200m met Higher investment income results from higher asset base and increasing interest rates in Brazil Turkey continues its positive trend and delivered four profitable quarters to FY204 segment EBIT (in sum: 2.5m) Based on total GWP adjusted for 50.2% stake in Hannover Re 2 CEE/CIS including Turkey and Russia; LatAm including Mexico; Western Europe including Italy, Austria, Liechtenstein and Luxembourg Business in Retail Intern. compensates for German business with limited growth perspectives 26 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

27 Retail International - CEE spotlight Poland Insurance market GWP: - P&C -2.5% (motor: -3.4%) due to soft markets - Life: -8.7% largely to due to decline in single-premium business given changes in regulatory environment Upside Low insurance penetration of 3.4% Expectation that soft motor markets will turn end 205 Life likely to remain volatile due to regulatory environment Warta GWP:.3%; EBIT: +.0%; Combined ratio: 96.% TU Europa GWP: -4.6%, mainly from Life EBIT: +6.3% Combined ratio: 8.2% Turkey Insurance market GWP: - P&C +9.0% (motor +2.0%) Supportive demographic development Upside Low insurance penetration of.5% Expectation that soft motor markets will turn end 205 HDI Turkey GWP: +7.8% EBIT: 2.5bn Combined ratio: 03.2% Bulgaria and Ukraine Portfolio alignment: Sale in Bulgaria and Ukraine No expectation of short-term growth (shrinking markets over the last 5 years: Ukraine -3%; Bulgaria -2%) Small entities outside any profitable niche Sub-scale in terms of size (GWP and EBIT contribution of the segment well below %) Entities sold in 205, still subject to regulatory approval Market data in Poland per 30 September 204; Turkey per 3 December 204; in local currency 27 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

28 Retail International Latin America spotlight Brazil Insurance market P&C: GWP growth of.% (motor: 0.%) Upside Low insurance penetration: - ~60% of vehicles not insured - ~90% of private households not insured HDI Brazil GWP: +4.%; currency-adj. +3.% EBIT up by 2.6%; currrency-adj.+22.3% Combined ratio of 98.8% Fifth-largest motor insurer in Brazil Hermes award for the best motor insurer in the country Mexico Insurance market P&C: decline in GWP by -.2% (motor 2.2%) Upside Low insurance penetration: - More than 70% of vehicles not insured - ~90% of private households not insured HDI Mexico GWP +7.8%; currency-adj. +.4% EBIT up by 2.2%; currency-adj. +5.9% Combined ratio of 92.4% Ninth-largest motor insurer in Mexico Chile Take-over of Inversiones Magallanes Signing of contract with majority owner in December 204 Fully consolidated from 3 February 205 Talanx achieves a market-leading position in Chile: - No. 5 in P&C insurance - No. 2 in motor insurance Market data per 30 September 204 in local currency 28 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

29 Reinsurance: Overview Key figures Share in 204 group GWP 3% GWP development (total, bn) Comments Non Life: Growth effects mainly from structured Reinsurance in Asia and facultative business Major losses of 426m (6.% of NPE) below budget of 670m; conservative loss reserving policy maintained FY204 EBIT margin 3 of 7.4% (FY203:6%) is well above target Life/Health: Growth effects mainly from Australia and Longevity BATs Improved technical result due to normalised result from Australian disability business Key financials ( m) Non-Life Life / Health FY20 FY202 FY203 FY204 Change FY20 FY202 FY203 FY204 Change Gross written premium 6,826 7,77 7,88 7,903 +% 5,270 6,058 6,45 6,459 +5% Net premium earned 5,96 6,854 6,866 7,0 +2% 4,789 5,426 5,359 5,4 +% Net investment income % % Operating result (EBIT) 637,33,097,29 +% % Comb.Ratio 2 in % (0.2%pts) Reinsurance FY20 FY202 FY203 FY204 Change Return on Equity in % (0.%pts) Based on total GWP adjusted for 50.2% share in Hannover Re 2 Incl. expenses on funds withheld and contract deposits; net 3 EBIT margins reflect a Talanx Group view Hannover Re is one of the largest and most profitable reinsurers globally 29 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

30 Hannover Re keeps its leading position in RoE ranking Source: Hannover Re company presentation as of 0 March 205; reflects Hannover Re s reported numbers on a stand-alone basis 30 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

31 3 Deutsche Bank German, Swiss & Austrian Conference, 8 June Appendix -

32 Large losses in FY204 ( m, net) Primary insurance Reinsurance Talanx Group Snowstorm, Japan February Storm, USA May Storm, USA June Storm Ela, Germany, Belgium, France June Typhoon, Philippines/China July Hail, Canada August Flood, India/Pakistan September Hurricane, Mexico September Flood, Italy October Cyclone, India October Hail/Storm, Australia November Total NatCat Aviation Fire/Property Liability Other Total other large losses Total large losses Impact on Combined ratio %pts 6.%pts 6.%pts Total large losses (203) Net burden from large losses of overall 782m in FY204 (FY203: 838m) Q4 net burden of 98m in Primary and 84m in Reinsurance Primary Insurance affected by an unusually high frequency of manmade losses in industrial fire business Reinsurance well within its FY204 large loss budget Impact on Combined ratio %pts 8.4%pts 6.8%pts Definition large loss : in excess of 0m gross in either Primary Insurance or Reinsurance 32 Deutsche Bank German, Swiss & Austrian Conference, 8 June

33 Large losses in Q 205 m, net Primary insurance Reinsurance Definition large loss : in excess of 0m gross in either Primary Insurance or Reinsurance Talanx Group Storm, USA February Storm "Niklas", Germany, Switzerland, Austria March Total Nat Cat Aviation Fire/Property Total other large losses Total large losses Impact on Combined Ratio (incurred) 6.2%pts 3.3%pts 4.6%pts Total large losses Q Impact on Combined Ratio (incurred) 0.8%pts.9%pts.4%pts Group Q 205 large loss net burden of 56m higher than in Q 204 ( 4m), but significantly below the quarter s large loss budget for the Group ( 230m) Primary Insurance mainly affected by man-made losses in Aviation and Property and storm Niklas Reinsurance suffered large losses in NatCat and manmade, but remains well below its large loss budget Note: Q 205 Primary Insurance large losses (net) are split as follows: Industrial Lines: 84m; Retail Germany: 8m; Retail International: m, Group Functions: m 33 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

34 Rating overview Current financial strength ratings rating of Talanx Primary Group Standard & Poor s A. M. Best Grade Outlook Grade Outlook last update 30/06/4 0/06/5 Anchor rating a+ Business Risk Profile Strong Financial Risk Profile Very Strong Modifiers Modifiers Neutral Talanx Group - - A Stable IICRA 4 ) Intermediate Risk Capital & Earnings Very Strong ERM Strong Talanx Primary Group 2 A+ Stable - - Competitive Position Risk Position Management & Governance last update 28/05/4 9/09/4 Strong Intermediate Satisfactory Hannover Re subgroup 3 AA Stable A+ Stable Financial Flexibility Strong Liquidity Exceptional The designation used by A. M. Best for the Group is Talanx AG and its leading non-life direct insurance operation and its leading life insurance operation 2 This rating applies to the core members of Talanx Primary Group (the subgroup of primary insurers in Talanx Group) 3 This rating applies to Hannover Re and its major core companies. The Hannover Re subgroup corresponds to the Talanx Reinsurance segment 4 Insurance Industry and Country Risk Assessment Financial strength underpinned by S&P and A.M. Best ratings 34 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

35 Talanx Investor Relations Financial Calendar 2 August 205 Interim Report 6M September 205 Capital Markets Day 2 November 205 Interim Report 9M March 206 Annual Report 205 May 206 Annual General Meeting 3 May 206 Interim Report 3M 206 Contact Talanx AG Riethorst Hannover Germany ir@talanx.com Carsten Werle, CFA Phone: carsten.werle@talanx.com Marcus Sander, CFA Phone: marcus.sander@talanx.com Wiebke Großheim (née Erler) Phone: wiebke.erler@talanx.com Christian Marx Phone: christian.marx@talanx.com 35 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205

36 Disclaimer This presentation contains forward-looking statements which are based on certain assumptions, expectations and opinions of the management of Talanx AG (the "Company") or cited from third-party sources. These statements are, therefore, subject to certain known or unknown risks and uncertainties. A variety of factors, many of which are beyond the Company s control, affect the Company s business activities, business strategy, results, performance and achievements. Should one or more of these factors or risks or uncertainties materialize, actual results, performance or achievements of the Company may vary materially from those expressed or implied as being expected, anticipated, intended, planned, believed, sought, estimated or projected.in the relevant forward-looking statement. The Company does not guarantee that the assumptions underlying such forward-looking statements are free from errors nor does the Company accept any responsibility for the actual occurrence of the forecasted developments. The Company neither intends, nor assumes any obligation, to update or revise these forwardlooking statements in light of developments which differ from those anticipated. Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by the Company as being accurate. Presentations of the company usually contain supplemental financial measures (e.g., return on investment, return on equity, gross/net combined ratios, solvency ratios) which the Company believes to be useful performance measures but which are not recognised as measures under International Financial Reporting Standards, as adopted by the European Union ("IFRS"). Therefore, such measures should be viewed as supplemental to, but not as substitute for, balance sheet, statement of income or cash flow statement data determined in accordance with IFRS. Since not all companies define such measures in the same way, the respective measures may not be comparable to similarly-titled measures used by other companies. This presentation is dated as of 6 June 205. Neither the delivery of this presentation nor any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. This material is being delivered in conjunction with an oral presentation by the Company and should not be taken out of context. 36 Deutsche Bank German, Swiss & Austrian Conference, 8 June 205