Munich Re Equity Story Good progress towards 2020 ambition ...€¦ · ecosystem startups, e.g. ridecell Transformation of customer interaction – 30%1 user increase of customer

Munich Re Equity Story

Exploiting opportunities in an improving

market environment

November 2020

Image: Klaus Ohlenschläger / dpa Picture Alliance

2Munich Re – Equity Story

Why invest in Munich Re

Equity story

Digital transformation opportunities

Attractive dividends

Strong capital position

Diversified business model

Leading global reinsurer

21

3

Good sustainability ratings

✓

November 2020

3November 2020Munich Re – Equity Story

Well above target capitalisation, high quality of eligible own funds

Solvency IIratio

244% 245% 237%

2017 2018 2019

Tier 2:10%

Tier 12: 90%

Tier 3: 0.2%

EOF1

€41.5bn

Strong reserves, debt leverage one of the lowest in the industry

28.226.5

€30.6bn

2017 2018 2019

12.0%DEBT

1 As at 31.12.2019. 2 99.97% unrestricted, 0.03% hybrid capital. 3 As at 31.12.2019. Strategic debt (senior, subordinated and other debt) divided by total capital (strategic debt + equity).

Strong capital position and financial stability

Equity story

Top positions assessed by leading rating agencies

FitchAA

S&P AA–

A.M. Best A+

Moody’sAa3

Financial strength ratings

Shareholders’ equity


Operating performance in 2019 supported

by strong balance sheet

Reserving Investments Taxes

Valuation reserves increased to €33bn

Ongoing prudent setting of reserves

Resilience to adverse development, e.g. US casualty –unchanged reserve strength

ALM and ZZR-driven realisations overcompensate derivate losses from equity-and interest-rate hedging

Some tax releases –tax rate of 15.1%

Ongoing high reserve releases for basic losses –2019: 5.6%

Strong balance sheet

Earnings supportin 2019

November 2020

Equity story


Strong performance in 2019

Figures as at 31.12.2019 (31.12.2018).

€2.7bn (€2.3bn)

Exceeds initial guidance of €2.5bn

9.2% (8.4%)

Above cost of capital

€9.80 (€9.25)

High pay-out to shareholders

237% (245%)

Well above target capitalisation

Solvency II ratio

Dividend per share

IFRS net income

Return on Equity

Equity story

November 2020

2.32.5

2.8

2.3

2.7

2018 2019 2020

Guidance Actual

6

Ongoing business and earnings growth supports

underlying 2020 ambition

Digital transformation

Reduce complexity

Increaseearnings1

Munich Re – Equity Story

€bn

November 2020

Equity story

Ambition 2020 no longer achievable due to COVID-19 –underlying performance remains strong

H1 2020

Net income normalised for

▪ 12% large losses in

P-C Reinsurance

▪ COVID-19 claims in

L&H Reinsurance

supporting former FY 2020 target

1 IFRS net income.

7

Reinsurance – Strategic growth initiatives well on track

▪ Consolidate top position in mature markets

▪ Smart growth in select emerging markets

▪ Launch of voluntary programme –reduction of ~350 FTEs

▪ Cost savings of ~€200m by 2020

▪ Disposal of MSP Underwriting and Ellipse

Continue profitable growth path

Streamline processes towards business and execution

Scale up successful initiatives, push new business models

▪ Push new business models – relayracquisition to strengthen IoT offering

▪ Data-driven solutions, e.g. Realytix

▪ InsurTech platform via Digital Partners

▪ Growth initiatives in P-C paying off (esp. in the US and Asia) – GWP +8%1

▪ Strong new business generation in Life and Health continues

▪ MR Specialty Insurance established

▪ Voluntary programme successfully completed, cost savings on track

▪ Re-engineering and automation of accounting processes (~100 FTEs)

▪ Global single-risk unit established, pooling together ~560 employees

▪ Create new income streams in the Canadian group insurance market

▪ Cyber insurance premiums up 27%1

▪ Digital Partners premiums doubled


2018 2019

2020

1 Compared to previous year. November 2020

Equity story

8

ERGO – Sustainably increasing profitability

▪ ESP2 ahead of financial targets

▪ Tied agent productivity significantly increased by 20%1

▪ Cost savings of €174m achieved

▪ Simplification of products, e.g. full modular product design

▪ Fully separated traditional life book

Successful completion of ESP2

Further simplify product offering and processes

Scale up and internationalisedigital solutions

▪ Strategic investments in mobility ecosystem startups, e.g. ridecell

▪ Transformation of customer interaction –30%1 user increase of customer self-service portal

▪ Nexible doubles number of policies

▪ ESP2 ahead of financial targets

▪ Tied agent productivity further improved by 18%1

▪ Cost savings of €234m achieved

▪ International portfolio streamlining finalised – 18 entities sold in total

▪ New life offerings through unified risk carrier – double-digit APE growth

▪ B2B2C mobility cooperation strategy expanded

▪ Digital process automation scaled up –first relevant AI applications, 70+ bots

▪ Minority stake in Next Insurance3


2018 2019

2020

1 Compared to previous year. 2 ERGO Strategy Programme. 3 Closing expected in March 2020. November 2020

Equity story


Munich Re showing resilience against COVID-19 impact

November 2020 9

Significant short-term claims impact, but good medium- and long-term business opportunities

Insurance risk well manageableStrong IT facilitating work from home for tens of thousands of employees without any friction

Business activities running smoothly

Solid investment resultProven stress resilience allows

for dividend payment

Reliable shareholder return

Financial impact of COVID-19 on Munich Re well bearable

Navigating capital market volatility with well-diversified investment portfolio and effective hedging

Image: MathieuRivrin / Getty Images

Equity story


Despite COVID-19, business operations well on track –

Strong capitalisation safeguards financial flexibility

November 2020

… increases uncertainty, driving reinsurance

demand

COVID-19 …

… requires risk-bearing capacity and

high capital flexibility

… accelerates digitalisation

Our strong capitalisation enables us to …

… seize profitable business opportunities

▪ Reinsurance market hardening – 7.6% premium growth (July:

8.3%) and 1.8% price increase (July: 2.8%) in 2020 renewals

▪ Flight to quality – we remain reliable and provide ample capacity

▪ COVID-19 crisis to further crystalise the value proposition of

(re)insurance

… substantially invest in digital transformation

▪ Employees: Digital infrastructure facilitated instant mobile working

▪ Customers: Digital sales channels safeguarded premium service

levels during lockdown

▪ Operations: New business models gaining momentum

… grow GWP and deliver on capital repatriation

▪ Increase in dividend per share from 2017 to 2019: 14% –

ambition for further growing dividends

▪ Total volume of share buy-back between 2017 and 2019: €3bn

▪ Expansion in attractive lines of business and geographies

Image: CROCOTHERY / stock.adobe.com

Equity story


Shareholders participate in our earnings growth

1 As at end of February 2020. 2 Total shareholder return 1.1. – 31.12.2019. Peers: Allianz, Axa, Generali, Hannover Re, Scor, Swiss Re, Zurich. Source: Datastream.

Sustainable dividend-per-share growth …

3.10

€9.80

2005 2019

€1bn

2006 2019

Ongoing share buy-backs

… supports attractive shareholder returns2

Peer 2

Munich Re

Peer 7

Peer 6

Peer 5

Peer 3

Peer 4

Peer 1 52.5%

43.6%

44.0%

41.0%

32.9%

30.3%

27.5%

–0.5%

Total pay-out 2005–2019

~€30bn~80% of current

market cap1

November 2020

Equity story


ESG framework – Systematically integrating sustainability

criteria into our insurance and investment activities

Equity story

1 Approximation as at 31.07.2020. 2 As at 2019

Investments

Systematic integration of ESG criteria: Sustainability ratio >80% in 2019

Focus topics

▪ Invested capital (equity and debt) in

renewable energies of €1.6bn2

▪ Investment in green bonds of

€1.3bn2

▪ Investments in renewable energies

goal of €2.8bn

Commitment to achieve a green-house-gas neutral investment portfolio by 2050, Munich Re joined UN-convened “Net-Zero Asset Owner Alliance”

Insurance Sensitive issues

ESG criteria integrated into insurance processes and products: Risk-based management established and ESG framework applied Group-wide

Enabling and solutions

▪ Nat cat premiums of ~€4bn

in P-C Reinsurance portfolio2

▪ Risk-transfer solutions for

renewables and smart energy,

e.g. solar/PV, windfarms, battery

storage

▪ Sovereign and public-private nat

cat risk transfer schemes as a

way of closing the protection gap


Digital transformation opportunities – Innovative and more

disruptive offerings are gaining traction

Munich Re strategic advantages …

Domain expertise in underwriting, claims, risk management

Strong brand and reputation

No IT legacy

Global presence

Financial strength

Efficient access to new solutions

… foster creation of new strategic options

Reshuffling the value chain

▪ Digital cooperation models (e.g. Digital Partners)

▪ IoT1 applications and services (e.g. MHP/ Porsche cooperation)

▪ Munich Re New Ventures –Parachute platform

Expanding the boundaries of insurability

▪ Cyber (re)insurance: GWP 2019 US$ 604m, good profitability, accumulation control

▪ Cyber embedded service solutions and growing cooperation network (e.g. DXC Technology)

▪ Insurance of AI technology

Data-driven solutions

▪ Newly developed risk scores (e.g. climate risk)

▪ Digitally augmented underwriting/claims solutions for our cedants(e.g. Munich Engine, Realytix, Improvex)

Investments in

technology and people

Strategic investments

in partnerships

Levers

November 20201 Internet of Things.

Equity story

Portfolio

share1

Running

yield1

Fixedincome ~80% ~2.5%

Non-fixed income ~20% ~4.0%


Investment return – Resilience to low interest rates

expected to persist

1 Munich Re, as at 31.12.2019. 2 Write-ups/write-downs, derivatives, other income/expenses.

Disposal gains

Running yield

Other items2

ZZR financing, prudent ALM

and usual portfolio turnover –

valuation reserves partly realised

Well-balanced, high-quality investment portfolio reduces impairment risk –

ALM-based equity and interest-rate hedges protect against adverse development

RoI

Regular

attrition

Negative

impact on

running yield

Expected attrition

~10 bps

Delta reinvestmentand running yield1

Asset duration1

2.8 2.7 2.8 2.8

1.1 1.1 0.71.1

–0.7 –0.6 –0.7 –0.7

3.2% 3.2%2.8%

3.2%

2016 2017 2018 2019

~5bps

~5bps

~60bps 8.4

November 2020

Equity story


Outlook 2020

November 2020

Equity story

ReinsuranceGross premiums written

~€36bn(before: ~€34bn)

Net result

withdrawn

Combined ratioProperty-casualty

withdrawn

Technical result, incl. fee incomeLife and Health

withdrawn(before: ~€550m)

ERGOGross premiums written1

~17.5bn

Combined ratioP-C Germany1

~92%

International1

~94%

Net result1

~€530m

Gross premiums written

~€54bn(before: ~€52bn)

Net result

withdrawn

GroupReturn on investment1

~3%

1 Substantial risk of falling short of this guidance, subject to the further development of the COVID-19 pandemic.

Group

2Image: Klaus Ohlenschläger / dpa Picture Alliance


Munich Re at a glance –

Key financials

2019 2018 2017 2016 2015

Gross written premiums €bn 51.5 49.1 49.1 48.9 50.4Operating result €m 4,004 3,725 1,241 4,025 4,819Taxes on income €m –483 –576 298 –760 –476Consolidated result €m 2,707 2,275 392 2,581 3,122Investments €bn 228.8 216.9 217.6 219.4 215.1Return on equity % 9.2 8.4 1.3 8.1 10.0Equity €bn 30.6 26.5 28.2 31.8 31.0Off-balance-sheet reserves1 €bn 19.9 16.1 15.0 17.3 16.0Net technical provisions €bn 217.9 208.3 205.8 202.2 198.5Staff at 31 December 39,662 41,410 42,410 43,428 43,554

Book value per share € 211.1 180.9 185.2 200.9 188.4Earnings per share € 19.0 15.5 2.4 16.0 18.7Dividend per share € 9.80 9.25 8.60 8.60 8.25Amount distributed €m 1,386 1,342 1,290 1,338 1,329Share price at 31 December € 263.0 190.6 180.8 179.7 184.6Market capitalisation at 31 December €bn 38.0 28.5 28.0 28.9 30.8No. of shares at year-end m 144.3 149.5 155.0 161.1 166.8

1 Including amounts attributable to minority interests and policyholders.

Backup: Group

November 2020

November 2020Munich Re – Equity Story

L&H reinsurance – Increase in COVID-19-related claims

consistent with pandemic development in different regions

18

Backup: Group

Outlook/Projection 2020

COVID-19 related losses

in L&H reinsurance

▪ Losses dominated by far by the US

▪ Q3: ~€100m / 9M: ~€200m

▪ 9M includes COVID-19 related claims expected

to be incurred by 30 September – no specific

provisions for COVID-19-related deaths after

30 September established

▪ Limited loss activity on disability lines so far

▪ Claims development depends on further mortality experience, esp. in North America

▪ As expected, portfolio mortality rates are well below that of the general population

▪ Each 5% of extra mortality claims in our book leads to excess annual claims cost of ~€200m1

▪ Still far away from 200-year event scenario2

of ~€1.4bn

▪ Risk of disability claims depends on economic development

▪ UK longevity is expected to offset UK mortality claims

1 Estimate based on a stress test with simplistic assumptions, e.g. no differentiation between markets, no specific age distributions of our exposure and lethality of the pandemic.; only refers to mortality business. 2 Scenario based on the assumption of 10m incremental global deaths.

November 2020Munich Re – Equity Story

P-C reinsurance – Continuous worsening

of the pandemic leaving its mark in Q3

19

Backup: Group

▪ Losses across various lines of business,

contingency losses making up the largest share

▪ Q3: ~€700m / 9M: ~€2.1bn

▪ Material reserve increase in Q3 due to the

continuous worsening of the pandemic and recent

reintroduction of restrictions in many countries

▪ 9M figures include COVID-19-related claims incurred

through 30 September, reserved cautiously across

affected lines of business

▪ 9M: ~€300m in paid claims and client-reported case

reserves in reinsurance, ~€1.8bn IBNR1

▪ Risk of further contingency claims continues, depending on development of the pandemic

▪ Claims in other lines of business are also expected to increase

▪ BI: focus on non-damage BI policies – contract wording is crucial (e.g. FCA ruling provides a differentiated view)

▪ Less exposure to further deterioration expected in credit given government interventions and exposure management of our cedants

▪ Less exposed in workers’ comp. and D&O

Outlook/Projection 2020

1 Including €540m claims (direct business) for which we gave confirmation of coverage in 9M 2020.

COVID-19 related losses

in P-C Reinsurance

Prudent reserving protecting balance sheet against negative

surprises while continuously contributing to earnings strength

20Munich Re – Equity Story1 Reinsurance Property-casualty, in % of net earned premium, basic losses after sliding scale commissions.

AsbestosComplex litigation,

changes in legal and

regulatory environment

US workers’ comp.High losses for reinsurers

in business underwritten

during late 90s; significant

late-loss emergence

US liability

High litigation risk and

increasing social-inflation

trends

Managing industry hot spots Munich Re impact

De-risking with large

claims settlements

in the past and very

strong survival ratio

Prudent reserving

situation allowed for

reserve releases

again in 2019

Worsening loss trends

in selected portfolios,

continuous and pro-active

strengthening of reserves

to ensure prudence level

7.2

5.55.2

4.6

5.6%

2015 2016 2017 2018 2019

Ongoing reserve releases1

Positive claims experience by far

exceeding adverse development in

selected hot-spot areas

November 2020

Backup: Group

Continuous and strong reaction to adverse US casualty loss

trends over the last years to maintain prudence level for our

reserve position


US casualty – Closely monitoring adverse trends, reserving

risks manageable

TOTAL

€16.5bn

Risk Solutions US casualty

17

Traditional US casualty

83

US casualty provisions for

outstanding claims

TOTAL

€13.7bn

Fair values (net) as at 31.12.2019

Traditional US casualty by

underwriting years

UY 2015+

48 (88% IBNR)

UY 2003-2014

33 (79% IBNR)

UY 2002 and prior

19 (62% IBNR)

Immediate response to early signs

of adverse development

%

%Decisive action on

our US primary book

by changing strategy,

but also by strength-

ening reserves in

motor and general

liability lines

2018 20192017

Action on individual

portfolios in our

reinsurance liability

book where we saw

elevated loss

reporting from

our cedants

Further reserve

strengthening in

reinsurance motor

liability, general

liability and financial

lines to respond to

ongoing loss trends

November 2020

Backup: Group


Very strong reserve position – Actual basic losses continue

to be consistently below actuarial expectations

1 Reinsurance group losses as at Q4 2019, not including parts of Risk Solutions, special liabilities and major losses (i.e. events of over €10m for Munich Re's share).

Reinsurance group – Comparison of incremental expected losses with actual reported losses1 €m

Legend: Green Actuals below expectation Red Actuals above expectation Solid line Actuals equal expectation Dotted line Actuals 50% above/below expectations

By exposure year By line of business

2018

2017

2016

20152014

2013

2012&prior

10

100

1,000

10,000

10 100 1,000 10,000

Expected reported loss

Actual reported loss

Aviation

Credit

Engineering

Fire

Marine

Motor

Personal accident

Risks other property

Third-party liability

100

1,000

10,000

100 1,000 10,000

Expected reported loss

Actual reported loss

Actuals below expectation for all contract years –

overall picture consistent with previous years

Also on a line-of-business view all actuals are

below expectations

November 2020

Backup: Group


Positive run-off result despite reserve strengthening in selected

portfolios without weakening resilience against future volatility

Ultimate losses1 – Favourable actual vs. expected comparison facilitates ultimate reductions for prior years

€mAccident year (AY)

≤2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total

31.12.2009 53,838

31.12.2010 53,118 13,517

31.12.2011 52,226 13,707 17,594

31.12.2012 51,079 13,585 17,745 14,520

31.12.2013 50,588 13,669 17,459 14,301 14,409

31.12.2014 49,641 13,698 17,043 14,096 14,630 14,324

31.12.2015 48,728 13,496 16,918 13,883 14,586 14,351 13,587

31.12.2016 48,380 13,270 16,446 13,848 14,291 14,328 13,640 14,486

31.12.2017 48,210 13,140 16,418 13,748 14,190 14,117 13,429 14,324 17,667

31.12.2018 47,495 12,971 16,124 13,488 13,917 13,851 13,219 14,366 17,693 17,907

31.12.2019 46,377 12,915 15,855 13,254 13,765 13,668 13,068 14,196 17,563 18,773 18,928

CY 2018 run-

off change 1,118 56 269 234 151 183 151 170 130 -866 – 1,597CY 2018 run-

off change (%) 2.4 0.4 1.7 1.7 1.1 1.3 1.1 1.2 0.7 -4.8 – 0.9

▪ Ultimate reductions in

particular for basic losses

▪ Negative run-off in AY 2018

largely driven by adverse

outlier development (e.g.

Typhoon Jebi), and to a

much smaller extent also

impacted by prudent

reserving for US casualty

loss trend

▪ Reserve position remains

strong

Reinsurance2 €1,531m

ERGO €66m

1 Basic and major losses; accident-year split partly based on approximations. Adjusted to exchange rates as at 31.12.2019. 2 Basic losses: €1,494m, major losses: €37m.

November 2020

Backup: Group


Capital position

November 2020

Backup: Group

Equity €m

Subordinated debt

Senior and other debt

Equity

Capitalisation €bn

1 Strategic debt (senior, subordinated and other debt) divided by total capital (strategic debt + equity).

Debt leverage1 (%)

26.5 30.6 29.1 29.8 29.6

3.7

3.83.9 3.7 5.00.3

0.30.3 0.3 0.3

13.212.0 12.6 11.9

15.1

2018 2019 31.3.2020 30.6.2020 30.9.2020

Equity 31.12.2019 30,576 Change in Q3

Consolidated result 999 199

Changes

Dividend –1,373 0

Unrealised gains/losses 1,158 372

Exchange rates –931 –651

Share buy-backs –359 0

Other –429 –45

Equity 30.9.2020 29,641 –125

Unrealised gains/losses Exchange rates

Fixed-interest securities

9M: €1,885m Q3: €306m

Non-fixed-interest securities

9M: –€743m Q3: €62m

Devaluation of various currencies,

mainly USD


Outstanding senior and subordinated bonds

Nominal volume Coupon rate p. a. Emission/Issue Maturity

€1,250m Until 2031 1.25%, thereafter variable 2020 2041


€900m Until 2022 6.25%, thereafter variable 2012 2042

£450m Until 2022 6.625%, thereafter variable 2012 2042


US$342m 7.45% 1996 2026

Maturity pattern €bn Currency pattern

0.4

3.6

1.3

0.0

0-5 5-10 10-15 15-20 20-25 25-30 30-35 undated

USD

7%

GBP

9%

EUR

84%

TOTAL

€5.3bn

As at 30 September 2020. Bonds with a nominal value below €100m not considered. In addition, Munich Re has placed some natural catastrophe bonds.

Backup: Group

November 2020

€3.8bn –1.3

–1.0

1.5 –0.1 €3.0bn

Distributableearnings

31.12.2018

Dividend Sharebuy-back

HGB result2019

Other Distributableearnings

31.12.2019

8.5

€9.3bn

2018 2019


German GAAP (HGB) – Capital repatriation well

funded despite decline of distributable earnings

Equalisation provision

HGB result 2018 €bn

2.2

Underwriting result –0.9

Investment result +0.6

Other –0.4

HGB result 2019 1.5

HGB result below capital repatriation

1

1 Changes in restrictions on distribution.

+€0.8bn

November 2020

Backup: Group

220%

175%

140%

100%

302%

267%

244% 245% 237%


Sound economic capitalisation continues to support our capital-

management strategy – First-time application of VA for four ERGO entities

Optimal range

2015 2016 2017 2018 2019

EOF 40.7 40.7 35.1 36.0 €41.5bn

SCR 13.5 15.3 14.4 14.7 €17.5bn

247 253

224 219226 232

213

Interest rates

+/-50bps

Equity markets+/-30%

Spread GOV

+50bps

Spread CORP +50bps

Atlantic Hurricane

SII sensitivities

1 1 2

2015 – 2019: Economic earnings cover capital

repatriation, while business growth and low interest

rates have driven the increase of required capital

1 Parallel shift until last liquid point, extrapolation to unchanged UFR. 2 Based on 200-year event. 3 SII ratio includes volatility adjustment for ERGO Leben, Victoria Leben, ERGO Belgium and DKV Belgium. VA impact in 2019 ~6%-pts.

Development of Solvency II ratio

3

%

November 2020

Backup: Group


High economic earnings overcompensating SCR increase

620 –18

–3 – –13

31.12.2018after capital

management

Openingadjustments

Operatingimpact

Marketvariances

Otherincl. tax

Changein eligibilityrestrictions

31.12.2019before capitalmanagement

Capitalmanagement

31.12.2019after capital

management

237%

Economic earnings €7.4bn

1 Opening adjustments incl. volatility adjustment at selected entities, M&A, model changes. 2 Operating impact and market variances pre-tax. 3 Change in non-available own fund items. 4 Foreseeable dividend for 2019 (€1.4bn), foreseeable share buy-back in 2020/21 (€1.0bn).

EOF €36.0bn 0.5 5.9 2.8 –1.3 – €43.9bn –2.4 €41.5bn

SCR €14.7bn –0.1 1.1 2.2 –0.3 – €17.5bn – €17.5bn

SII capital generation 0.7 4.8 0.6 –1.0 – €5.1bn –2.4 €2.7bn

1 4

245% 250%

2

3

Backup: Group

November 2020


Increase of SCR driven by substantial business growth

and lower interest rates

November 2020

Backup: Group

1 Capital requirements for associated insurance undertakings and other financial sectors, e.g. institutions for occupational retirement provisions.2 99.97% unrestricted, 0.03% hybrid capital.

Group

Delta

RI ERGO Div.

€bn 2018 2019 2019 2019 2019

Property-casualty 7.6 8.8 +1.2 8.8 0.4 –0.4

Life and Health 5.3 6.4 +1.1 5.5 1.2 –0.4

Market 9.2 10.1 +0.9 6.3 6.0 –2.2

Credit 3.2 4.2 +1.0 2.5 1.9 –0.2

Operational risk 1.1 1.1 +0.0 0.7 0.6 –0.2

Other1 0.7 0.7 +0.0 0.4 0.2

Simple sum 27.0 31.2 +4.2 24.2 10.3 –3.3

Diversification –9.9 –10.7 -0.8 –8.8 –1.2

Tax –2.4 –3.0 -0.5 –2.8 –0.8

Total SCR 14.7 17.5 +2.9 12.6 8.3 –3.4

SCR by risk category EOF by tiering

€36.0bn

2018 2019

€41.5bn

88%

11%

90%

10%

Tier 3

Tier 2

Tier 12

0.2%

1%

1

2

3

4

5

6


Property-casualty risk – Increase mainly driven by

business growth in P-C Reinsurance

Top scenario exposures (net of retrocession) – AggVaR1

▪ Exploiting opportunities in an improving market

environment – exposure growth in all major scenarios in

accordance with higher risk-bearing capacity (strongly

increased EOF)

▪ Additional exposure expansion due to depreciation of euro

▪ Well-diversified cat portfolio across perils and regions

1 Munich Re. Return period 200 years, pre-tax. 2 Natural catastrophes, man-made (including terrorism and casualty accumulations) and major single losses.

€bn €bn 2019 2018

Basic losses 4.0

Major losses2 7.1

Diversification –3.5

Total 7.6

Top exposures

1 Atlantic Hurricane

2 Earthquake North America

3 Earthquake Japan

4 Storm Europe

5 IT-Virus

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

2019 2018

4.0

8.3

–3.5

8.8

Backup: Group


Life and Health risk

1 Munich Re (Group). Return period 200 years, pre-tax

Life and Health – VaR1 €bn

Longevity

Mortality

Morbidity

Health

Other

Total

Overall increase driven by

ReinsuranceLower interest rates and increase in exposure, esp. US mortality business

1.61.5

4.33.6

3.42.7

0.90.8

0.50.3

6.45.3

2019

2018

ERGOLower Euro interest rates

November 2020

Backup: Group


Sensitivities of SII ratio

237%

247

224

226

232

253

219

233

234

213

235

220175

1 Parallel shift until last liquid point, extrapolation to unchanged UFR. 2 Based on CPI inflation. 3 Based on 200-year event.

Target capitalisation

Ratio as at 31.12.2019

Interest rate +50bps1

Interest rate –50bps1

Spread +50bps GOV

Spread +50bps CORP

Equity markets +30%

Equity markets –30%

FX –20%

Inflation +100bps2

Atlantic Hurricane3

UFR –50bps

Backup: Group


Backup: Group

ESG – Strong commitments and high market recognition

Standards

▪ Global Reporting Initiatives (GRI) disclosure

Commitments

Voluntary commitments

▪ UN Global Compact (UNGC)

▪ UN Principles for Sustainable Insurance (PSI)

▪ UN Principles for Responsible Investment (PRI)

▪ UN-convened Net-Zero Asset Owner Alliance (AOA)

Top positions in major SRI ratings

Overview on SRI ratings and indices can be found in our Corporate Responsibility Report

Committed to ESG reporting

https://www.munichre.com/content/dam/munichre/global/content-pieces/documents/cr-report-2019.pdf/_jcr_content/renditions/original./cr-report-2019.pdf

https://www.munichre.com/content/dam/munichre/mrwebsiteslaunches/2019-annual-report/MunichRe-Combined-non-financial-statement-en.pdf/_jcr_content/renditions/original./MunichRe-Combined-non-financial-statement-en.pdf


ESG – Key performance indicators

Backup: Group


Selected targets for 2020

▪ Achieve permanent carbon neutrality

by taking compensation projects into

account – achieved since 2015

▪ Convert all electricity procurement to

renewable energy sources –

already 90% achieved

▪ Reduce carbon emissions by 35%2 –

achieved since 2019

Environment

Diversity – share of women in …

▪ Supervisory Board: 45%

▪ Board of Management: 11%

▪ Executive/management: 35%

▪ Company overall: 53%

Health and training

▪ 5% sick leave

▪ 84% employees with access to

health service

▪ 92% employees with at least

one training

▪ 4.8 training days per staff

member

Governance

November 2020

Carbon emissions per employeereduced by 44%

4409

2485

2009 2019

kg CO2

Declined

40%

Conditions

attached

33%

Accepted

27%

ESG criteria in Board of

Management remuneration

Annual and multi-year bonus:

ESG criteria relevant for the

evaluation of the overall

performance (amongst other factors)

Reputational risk committees (RRC)

for escalation of controversial

underwriting and investment cases

Cases

submitted

to the RRC

in 2019

Social1

1 As at 31.12.2019. 2 Compared to the base year of 2009 and measured in kg of carbon emissions per employee.


Governance – Remuneration system for the Board of

Management meets shareholder requirements

Backup: Group

Basic remuneration

plus remuneration in

kind/fringe benefits

Variable

remuneration1

50%

50%

70%

30%

Bonus scheme

spanning

Corridor Assessment basis

1 calendar year 0 – 200% IFRS consolidated

result

5 calendar years 0 – 200% Total shareholder

return compared to a

defined peer group2

1 For 100% achievement of objectives/performance evaluation. Evaluation of overall performance: Adjustment of achievement figures by the Supervisory Board of up to 20 percentage points (loading/reduction). 2 Peer group: Allianz, Axa, Generali, Hannover Re, SCOR, Swiss Re, Zurich.

November 2020


In times of COVID-19, Munich Re fulfils the economic

and social role of (re)insurance

Economy

November 2020 36Image: CROCOTHERY / stock.adobe.com

▪ Gradual relaxation of lockdowns,

partially reversed again

▪ Fiscal and monetary stimuli

▪ V-, U-, W- or L-shaped development?

Capital markets▪ Quick and strong rebound of equity

and credit markets after severe losses

▪ Increasing decoupling from economic

fundamentals

▪ Risk of setbacks remains

Population▪ Social and economic life strongly limited

▪ Still rising infections and fatalities

▪ Increasing unemployment

▪ Risk of a second wave

Munich Re

▪ Fulfilling our mission as an insurer by

covering claims of €1.5bn in H1 2020 –

immediately supporting our business

partners

▪ Engaging in public-private-partner-

ship discussions to tackle future

pandemic challenge

▪ Protecting our employees as a

socially responsible employer –

strict measures ensuring infection

risk is kept as low as possible

▪ Extending into voluntary activities –

engaged in supporting communities

in need

Fully committed

to protecting

stakeholder value

Backup: Group

Reinsurance

3Image: John Lund / Getty Images


Munich Re – Leading global reinsurer

Backup: Reinsurance

Source: Standard & Poor's, September 2020

Rank Company Country Net reinsurance premiums written 2019 (US$ bn)

1 Swiss Re Switzerland 39.6

2 Munich Re Germany 35.4

3 Hannover Re Germany 22.8

4 Berkshire Hathaway Re USA 17.0

5 SCOR France 16.2

6 China Re China 12.2

7 Reinsurance Group of America USA 11.3

8 Lloyd’s UK 10.5

9 Everest Re Bermuda 7.8

10 Partner Re Bermuda 6.9

Total top 40 247.3

November 2020


Reinsurance – Overview

Backup: Reinsurance

2019 2018 2017 2016 2015

Gross written premiums €bn 33.8 31.3 31.6 31.5 28.2

Investments €bn 92.4 85.6 85.8 91.9 89.2

Net technical provisions €bn 77.2 72.4 68.1 67.1 65.4

Major losses (net) €m 3,124 2,152 4,314 1,542 1,046

Thereof natural catastrophes €m 2,053 1,256 3,678 929 149

Property-casualty – GWP by region 2019 % Life and Health – GWP by region 2019 %

North America

39

TOTAL

€11.7bn

Europe & LatAm

26Asia Pacific

26

Africa & Middle East

8North America

45

TOTAL

€22.1bn

Europe & LatAm

38Asia Pacific

13

Africa & Middle East

4

November 2020


Munich Re is well positioned to profitably grow its

core business fields and drive innovation in the industry

Sustainable new business proposition and active portfolio management

1 Effectively serving our clients and strengthening the business model

2 Reinforcing underlying profitability and growth

3 Building a diversified profit base –shaping and seizing opportunities in the digital transformation of the (re)insurance industry

4

Data-drivensolutions

Expanding theboundaries of insurabilityReshuffling

the valuechain

Trends

Risk Solutions

Reinsurance P-CReinsurance

Life and Health

November 2020

Backup: Reinsurance


1 L&H Re: Strong new business generation continues –

Portfolio composition fosters steady earnings growth

Growth

Portfolio management

Australian disability portfolio

US pre-2009 mortality block

Leading digital services

New (re-) insurance products

Established growth areas1

Risk-related services

Ambition2

Technical result, incl. fee income

450475

500

2017 2018 2019 2020e

~€550m

1 FinMoRe, Asia, USA, longevity and financial markets. 2 Ambition for 2020 withdrawn due to uncertainty related to COVID-19.

Improves earnings stability

Fundament of earnings generation

Safeguards earnings progress

CoreStrong footprint in

traditional reinsurance

In-depth expertise in risk

assessment and management

November 2020

Backup: Reinsurance

France: Successful re-entry and

already ahead of plan, further

strengthened as at 1.1.2020,

now >€300m premiums

Global Clients: Growth in long-

standing relationships, focus on

balanced portfolios and adequate

reflection of client strength

US: Selective expansion in local or

regional business, when pricing and

risk relation deemed good, cautious

on casualty

Japan: Expansion of nat cat

business reacting to increasing

rates in wake of recent typhoons


2 P-C Re: Growth initiatives gaining traction –

Profitable business expansion

~99% ~98–99%

Underlying combined ratio

20.422.1

2018 2019

+8%

Gross premiums written1

€bn

F&C: Direct Property and

Energy business seizing

market opportunities to write

more business at hardening

terms and better rates

AMIG: Transformation

efforts bearing fruit and

permitting growth of 17%,

well above market average

Risk Solutions business2

Mature markets2

India: Executing growth strategy

and broadening offer successful,

leading to diversified portfolio

now >€300m premiums

Latin America: Growing in

line with our ambition and

market position with existing

partners and new business

Emerging markets2

1 Compared to previous year. 2 Examples. F&C = Facultative & Corporate.

Expansion of nat cat business

+4% +21% +14%

November 2020

Backup: Reinsurance


100.7% (103.4%)

Normalised for large losses (aerospace)

C/R in line with mid-nineties ambition (elevated

prior to 2019 due to attritional losses)

€5.0bn (€4.3bn)

Capturing profitable growth opportunities

Gross premiums written Combined ratio

American Modern

▪ Transformation investments bearing fruit with growth of 17%1, showing attractiveness of new product suite

▪ One-off IT costs and business run-off partly impact the result

▪ Combined ratio of 88% confirms earnings potential of the unit

Facultative & Corporate

▪ Good and profitable market position confirmed by a 93% C/R in 2019 – following a period affected by severe outlier events

▪ Premiums with strong growth above expectation, particularly in property, leading to an increase of 35%1

Aerospace

▪ Unusual accumulation of large-loss events for Space and Aviation business leading to a C/R of 166%. Market materially reshaped after these events allowing for positive outlook

▪ Growing premium due to better market conditions and an improving competitive landscape by 20% in 2019 already. Further improvement expected for 2020

3 Risk Solutions –

2019 with another step back to target profitability

1 Compared to previous year. Gross premiums written. Economic view – not fully comparable with IFRS figures. November 2020

Backup: Reinsurance


Increased top line – Well-balanced diversified portfolio

Backup: Reinsurance Property-casualty – Portfolio

Rounded figures. 1 Gross premiums written. Economic view – not fully comparable with IFRS figures, as at 31.12.2019 (31.12.2018).2 Aviation, marine and credit. 3 Incl. MSP, sold in 2018.

▪ Strong proportion of US business,

spread across all lines of business

▪ Stable portfolio composition

Total P-C book % %2 Risk Solutions

Tailor-made

solutions

25 (25)

Other

traditional business

52 (53)

Risk

Solutions

23 (21)

TOTAL1

€22bn

MR Specialty

Insurance

22 (24)

American Modern

21 (21)

Facultative &

Corporate Direct

15 (12)

Hartford

Steam Boiler

22 (22)

Aerospace

8 (11³)

TOTAL

€5bn

Munich Re

Syndicate

12 (10)

▪ Well-balanced traditional portfolio

▪ Slight move towards specialty

1 Traditional

TOTAL

€17bn

Casualty

49 (51)

Specialty2

8 (7)

Other property

34 (34)

Nat cat XL

9 (7)

%

November 2020


Portfolio management and high share of proportional

business support earnings resilience

Traditional1

Backup: Reinsurance Property-casualty – Portfolio traditional

1 Gross premiums written. Economic view – not fully comparable with IFRS figures, as at 31.12.2019 (31.12.2018).

Casualty motor

30 (32)

Aviation

1 (1)

Property ex nat cat XL

29 (30)

TOTAL

€17bn

Facultative

9 (8)

XL

16 (15)

Proportional

75 (77)

TOTAL

€17bn

Marine

2 (2)

Credit

4 (4)

Agro

5 (4)

Casualty ex motor

20 (19)

Property nat cat XL

9 (7)

%

November 2020

▪ Nat cat XL

▪ Accordingly, ongoing slight shift towards

non-proportional business

▪ Agro business

▪ Proportional property

▪ Casualty

Share

increases

Share

decreases


US casualty – Sustaining a robust portfolio

TOTAL

€6.8bn

Workers’ comp.2

6

Financiallines

18

General liability

26

Motor liability

50

Global traditional casualty book1

1 Expected yearly premiums without motor-own damage; business incepting 2.1.2019 – 1.1.2020, i.e. incl. 2020 January renewals. 2 Includes personal accident.

▪ Additional casualty premium via

Risk Solutions business of ~€900m

(thereof ~€750m US) …

▪ … providing balance for the overall

US casualty book with very high

share of smaller commercial and

personal lines business

US traditional casualty book1

approx. 40% of global traditional casualty book

TOTAL

€2.7bn

▪ Munich Re with early response in portfolio management and pricing

▪ Loss drivers (social inflation) identified and being addressed, risk

appetite clearly defined and coverage-specific restrictions for critical

exposures stated in underwriting best practices

▪ Personal lines business minimally exposed to social inflation

▪ Proportional business >90%

Workers’ comp.

6

Motor liability

27

Financiallines

29

Generalliability

38

TOTAL

€2.7bn

Workers’comp.

6

Personallines

18

Comm. liab. XL

6

Commercial liability

prop.

70

% %

November 2020



US casualty market highly differentiated – Still allows us to

seize opportunities while active risk management remains key

▪ Long-term track record in managing and early responding to risk of

change, e.g. social inflation

▪ Active portfolio management

▪ Selective opportunities in some proportional business lines –

benefitting from increasing original rates, credible alignment of

interest and high transparency

▪ Expansion of personal lines business from 7% to 18%1

▪ Reduction of portfolio parts with imbalanced premium/risk reward,

e.g. US commercial liability XL business from 10% to 6%1

▪ Proactive adjustment of pricing parameters to reflect dynamic market/

claims environment and avoid anti-selection

▪ Reduction of ceding commissions

▪ Risk management – strict limit management, accumulation control and

feedback loops between underwriting, claims and reserving

▪ Social inflation reflects the changing values of society

and particularly materialises as a frequency of severity

▪ Mainly exposed are bodily-injury related classes of

business, e.g. commercial auto, general and product

liability and healthcare/medical malpractice

▪ Limit reductions on original policies

▪ Accelerating rate increases on original policies,

primarily in the non-admitted market, e.g. E&S and

D&O

▪ Further firming in primary admitted market to be

expected after adjusted rate filings

▪ Accelerated rate increases expected throughout 2020

renewals, especially for high excess Bermuda and

financial lines renewals

Munich Re approach

1 Share in % of total US traditional casualty book, 2017 to 2020.

Market observations

Ongoing qualitative improvement of our proportional US commercial liability portfolio

November 2020



GWP global cyber insurance market1 US$ bn

4.7

11.2

2018 2019 2020 2021 2022

Rest of WorldNorth America

GWP Munich Re cyber portfolio US$ m

191263

354

473

604

2015 2016 2017 2018 2019

ReinsurancePrimary insurance

Cyber insurance market with strong expected growth

▪ North America will remain the biggest region. Europe and Asia

to expand their share in the world market significantly

▪ Regulatory changes in more than 100 countries and further

increased awareness drives demand for cyber solutions

▪ Growth of digital business models. IoT developments will further

increase the demand for cyber policies

Serving all client segments via RI and PI carriers

▪ Dedicated cyber teams ensure client proximity through a global

set up supported by a central cyber unit

▪ Steady growth in the US, accelerated growth in Europe and Asia

▪ HSB as a well-established player in the US conforming strong

growth and detecting new distribution channels

▪ Sustainable growth of corporate single risks through centralised

and strengthened expertise (MR F&C)

Strong long-term growth in cyber (re)insurance expected –

Munich Re with leading-edge expertise and market presence

Backup: Reinsurance Property-casualty – Cyber (re)insurance

1 Munich Re estimates. November 2020

▪ Sustained favourable reserve development

– releases exceed last year’s level in

absolute and relative terms

▪ Confidence level preserved – showing

resilience as positive claims experience

exceeds adverse development in selected

hot-spot areas


Property-casualty – Earnings growth

fully supports the 2020 ambition

Figures as at 31.12.2019 (31.12.2018). 1 Basic losses from prior years, already adjusted for directly corresponding sliding-scale and profit-commission effects.

▪ Strong volume increase by almost €2bn –

earnings trajectory supported by growth

from renewals and strategic initiatives

▪ Overall sound underlying profitability of

portfolio – comfortably exceeding cost

of capital

▪ High nat cat (esp. typhoons in Japan)

and man-made claims, particularly in Q4

▪ Strong investment result, incl. disposal gains

▪ Normalised for single large events

(e.g. aerospace) positive development

of profitability in Risk Solutions business

▪ Support from low tax expenses

€1,562m (€1,135m)Net result 101.0% (99.4%)

Combined ratio

5.6% (4.6%)Reserve releases1

▪ Major losses (15.2%) above average

▪ Underlying combined ratio ~98–99%,

slightly elevated due to non-outlier losses,

higher admin expenses and cautious

loss picks

November 2020

Backup: Reinsurance Property-casualty


Renewal results – Price changes since 2011

Backup: Reinsurance Property-casualty – Renewals

1.0

2.4

0.2

–2.4

–1.6

–0.9

–0.5

0.8

0.3

1.8

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

November 2020


July renewals 2020 –

Positive price dynamic continues and broadens

Backup: Reinsurance Property-casualty – July renewals 2020

November 20201 Price movement is risk-adjusted, i.e. includes claims inflation/loss trend and is adjusted for portfolio mix effects. Furthermore, price movement is calculated on a wing-to-wing basis (including cancelled and new business).

July renewals 2020

% 100 –11,9 88.1 +8.0 +12.2 108.3€m 3,475 –412 3,063 +279 +423 3,765

Total renewablefrom 1 July

Cancelled Renewed Increase on renewable

Newbusiness

Estimatedoutcome

▪ Positive pricing dynamics

continue – particularly in

regions and lines of

business with high loss

experience

▪ In addition, COVID-19

supports flight to quality

and market hardening

▪ Premium growth driven

by business opportunities,

especially in North

America and with global

clients

Change in premium +8.3%

Thereof price movement1 ~ 2.8%Thereof change in exposure for our share +5.5%


Retrocession – Stable programme structure despite a

tightened market

Backup: Reinsurance Property-casualty – Risk trading

1 Including indemnity retrocession, ILW/derivatives, risk swaps, cat bonds and the sidecars including Eden Re. Selection of main scenarios. 2 Munich Re structured and arranged transactions.

Retrocession – Maximum in-force

protection per nat cat scenario1

▪ Protection against peak risks via multiple instruments –

mainly traditional retrocession (CXL) and sidecars

▪ Well-balanced buying strategy reflecting

▪ strong Munich Re capital base and risk-bearing capacity,

▪ expected IFRS result stabilisation,

▪ market terms

0

500

1,000

1,500

2015 2016 2017 2018 2019 2020

Australia Cyclone US Windstorm NE US Windstorm SETraditional retrocession

▪ Munich Re has one of the largest retrocession

programmes globally

▪ Capacity constraints in the broader market, some

locked-in capital

▪ Reliable Munich Re approach – placements well

received

Sidecar program2

▪ One of the largest sidecar programmes in the market

(US$ 685m); QS cessions of certain lines of business

▪ Placed with a broad range of investors and targeting

long-term partnerships with large institutional accounts

▪ Two products: (1) placed with broad investor group,

(2) bilateral (single counterparty)

Munich Re key channels€m

November 2020


Munich Re's maximum in-force nat cat protection

€m

500

1,000

AustraliaCyclone

US WindstormNortheast

US WindstormSoutheast

USEarthquake

EUWindstorm

EUOther perils

JapanEarthquake

Risk swaps

Sidecars

Indemnity retro

0

Nat cat protection before reinstatement premiums, as at January 2020

Backup: Reinsurance Property-casualty – Risk trading

November 2020

▪ Again high level

▪ Strong traditional business development

in North America and Asia

▪ FinMoRe with ongoing strong demand


Life and Health – Result below guidance on strain

from Australia, favourable experience in other markets

Figures as at 31.12.2019 (31.12.2018). 1 Incl. Fee income.

▪ On aggregate positive claims experience

▪ Strong contribution from new business and

positive impact from restructuring of certain

large treaties

▪ Negative impact from reserve review in

Australia; overall global reserve position

considered strong

▪ Strain on technical result from restructuring

of asset portfolio in Canada

▪ Positive 2020 outlook: vital new business

proposition and earnings stabilisation from

2019 inforce management and reserve review

€456m (€584m)Technical result1 €706m (€729m)

Netresult

~€1.3bn (€1.1bn)New business contribution

▪ Decline of technical result

▪ High investment result driven by

restructuring of assets in Canada,

overcompensating strain on technical

result

November 2020

Backup: Reinsurance Life and Health


Strong footprint in all major markets

Gross premiums written 2019 / share of total (core regions).

Asia / MENA (€3.0bn / 26%)

▪ Pleasing development of new business, including vital pipeline of FinMoRe solutions

▪ Substantial share of health reinsurance

▪ Product trends to be monitored closely, particularly in critical illness

Canada (€1.7bn / 14%)

▪ Attractive margins despite competitive environment

▪ Maintain leadership position in traditional business

▪ Develop footprint in Group business

Continental Europe (€1.0bn / 9%)

▪ Sound but stagnating traditional business overall

▪ Demand for tailor-made FinMoRe solutions

Australia (€0.8bn / 7%)

▪ State of disability market remains an area of concern

▪ Strengthening of assumptions reflecting recent experience – in Q4 technical result impact of ~–€200m

▪ Rehabilitation of in-force top priority

▪ Highly selective new business proposition

USA (€2.9bn / 25%)

▪ Solid position among market leaders

▪ Further develop FinMoRebusiness and predictive analytics to foster growth

▪ Attractive risk-return profile of new business

▪ Successful inforcemanagement execution

UK / Ireland (€1.8bn / 15%)

▪ Successful FinMoRe and longevity proposition

▪ Margins in protection business remain unattractive

▪ Organisational set-up ready for Brexit

November 2020



Overweight in North America and traditional mortality risk


Size of bubbles indicative of present value of future claims.

Mortality ~65%

Morbidity ~25%

Longevity ~10%

NA ~50%

Europe ~30%

Asia/MENA ~15%

Australia <5%

Africa/LA <5%

90%

10%

USA

90%

10%

Latin America

70%

30%

Africa

70%30%

Canada

45%55%

Continental Europe25%

10%

65%

UK/Ireland

35%

65%

Asia / MENA

25%

75%

Australia

November 2020


Financially Motivated Reinsurance – Strong demand

prevails


€mGross premiums written1 Technical result1

▪ Demand expected to remain high

▪ Transaction types tailored to client needs

▪ Number and size of transactions will vary on an annual basis

▪ New business dominated by US and Asia

▪ 2018’s drop in top line due to scheduled termination and

restructuring of two particularly premium-intensive

transactions

Portfolio development

1 From 2016 including Health; technical result incl. fee income. 2 From 2017 including Health; 2019 still preliminary.

3,313

4,3064,793

1,264 1,20131 3235

12 10

2015 2016 2017 2018 2019

% of total

136

88

127

68

154

3417

34

13

47

2015 2016 2017 2018 2019

% of total

214

257

205178

231

23 2219 17 18

2015 2016 2017 2018 2019

% of total

€m€m

Expectations going forward

New business contribution2

November 2020


Asia – Success through tailor-made market and client

strategies

€mGross premiums written1 Technical result1 New business contribution2

▪ Growth path in the region prevails

▪ High demand for solvency relief and financing solutions

▪ Competition expected to increase

▪ Closely watch product trends, particularly in critical illness


▪ Strong organisational set-up throughout the region

▪ Sustained growth path

▪ Growing fee income

▪ New business contribution volatile on amount of FinMoRe

written in a particular year


1 From 2016 including Health; technical result incl. fee income. 2 From 2017 including Health; 2019 still preliminary.


910

1,9092,182

2,338

3,045

914 16

2226

2015 2016 2017 2018 2019

% of total

86

108100

162149

21 1923

2833

2015 2016 2017 2018 2019

% of total

198180

244

190

315

2115

2318

24

2015 2016 2017 2018 2019

% of total

€m€m

November 2020


Longevity – Hold on to prudent underwriting approach

Gross premiums written Liability p.a. Strategic proposition

▪ No change to prudent underwriting approach

▪ Carefully consider expansion beyond UK and extension of product

offering


▪ Book carefully developed in line with risk appetite

▪ Claims emerge better than expected in pricing

▪ Positive contribution to IFRS and SII earnings

▪ 2019: one large transaction executed late in the year


▪ Portfolio comprises longevity

transactions in the UK

▪ Market entry in 2011 after in-depth

research

▪ Prudent approach in pricing and

valuation


€m€m

381

484417

614685

4 4 36 6

2015 2016 2017 2018 2019

% of total

1,366

1,884

697

3,292

2,020

2015 2016 2017 2018 2019

November 2020


Financial Markets1 – Comprehensive market risk solutions

for the financial services industry

€mIFRS earnings contribution2 Strategic proposition

▪ Intensify coverage of existing markets and expand into further markets

▪ Support growth by further scaling up the organisation

▪ Broaden product, service and regulatory scope

▪ Grow contribution to IFRS earnings and new business contribution


▪ Initial focus on Europe and Asia (mainly Japan)

▪ Expansion across Europe, Asia, and North America

▪ Market exploration in Latin America and Australia

▪ Portfolio has gained stand-alone significance


▪ Offer comprehensive solutions to manage market risks and returns globally

▪ Innovate new business, optimise inforce business, and boost asset returns

of insurers, pension providers and other institutional and private investors

▪ Capitalise on growth and consolidation opportunities in the global savings,

retirement and investment industry

▪ Leverage capital market, structuring, accounting, legal, and regulatory

expertise on the basis of technical and quantitative capabilities

▪ Transfer and transform financial risks to markets via state-of-the-art platform

1 Formerly “asset protection”. 2 Recognised in non-technical result.


26

4437

59

103

2015 2016 2017 2018 2019

November 2020

ERGO

4Image: dem10 / iStockphoto Getty Images


ERGO – Overview

Backup: ERGO

2019 2018 2017 2016 2015

Gross written premiums €bn 17.7 17.8 17.5 17.4 16.5

Investments €bn 145.5 139.7 141.1 139.4 131.0

Net technical provisions €bn 140.8 135.9 137.6 135.2 130.3

Combined ratio p-c Germany % 92.3 96.0 97.5 97.0 97.9

Combined ratio p-c International % 94.3 94.6 95.3 98.0 104.7

Premium split by region – 2019 % Distribution channels Germany – New business 2019 %

Banks/other

2Tied agents

59

Broker

21

Direct

18

Rest of World

12Germany

69

Spain

5

Belgium

5

Poland

9

Figures from 2016 including international primary insurance business of Munich Health.

TOTAL

€17.7bn

November 2020

Actual

2018

Guidance

2019

Actual

2019

ESP guidance

20202

Total premiums €18.7bn ~€18.5bn1 €18.9bn ~€18.5bn

Net profit €412m ~€400m1 €440m ~€530m

Investments(net, accumulated)

€597m €908m2 €770m €1,008m

Total cost savings(net, accumulated)

€174m €227m2 €234m €279m

Combined ratio

P-C Germany96.0% ~93%1 92.3% 92%


ERGO Strategy Programme (ESP) –

On track to deliver targets 2020

1 From Annual Report 2018. 2 ESP guidance (total premiums adjusted for Munich Health integration and portfolio streamlining). November 2020

Backup: ERGO

Group


ERGO – Ahead of Strategy-Programme targets

L&H Germany P-C Germany International

Figures as at 31.12.2019 (31.12.2018). 1 Adjusted for portfolio optimisation: non-adjusted Group: €17.7bn (€17.8bn), International: €4.9bn (€5.1bn)

GWP

Net result

412440

2018 2019

+7%

€17.5bn

(€17.4bn)1

€440m

(€412m)

€9.2bn (€9.3bn)Growth in Life new book partially

compensates for back-book attrition;

positive development in Health

€187m (€264m)Adjusted for one-off in 2018,

net profit in Life increased;

ongoing high Health contribution

€3.5bn (€3.4bn)Strong growth – increase in

commercial and retail business

€148m (€45m)Significant improvement of

technical result

€4.7bn (€4.6bn)1

Premiums increased in core markets

€105m (€103m)Good operating performance offsets

divestment effects

2.9 3.1

2018 2019

+20bp

96.0 92.3

2018 2019

–3.7%-p

94.6 94.3

2018 2019

–0.3%-p

Return on investment%

Combined ratio%

Combined ratio%

November 2020

Backup: ERGO


Life and Health Germany –

Addressing low-interest-rate environment in Life

Life

Germany

€2.9bn(32%)

Back book

▪ Progress in portfolio migration onto new IT platform

▪ Foundation for TPA business model set through additional sales joint venture with IBM

▪ Resilient investment yields exceeding guarantee obligations (incl. ZZR), total yield even higher

▪ Measures to mitigate interest-rate risks continued,e.g. hedging and interest-rate reinsurance

Investment margins %

Digital Ventures

HealthGermany

1 Merger of ERGO Vorsorge Lebensversicherung AG with ERGO Direkt Lebensversicherung AG (EDL) in 01 2019. 2 Index- and unit-linked products.

GWP

€9.2bn

New business (APE)€m

New book

▪ ERGO Vorsorge as unified risk carrier fornew product offering through merger1

▪ Profitable new business concentrating on biometric offers and products with significantly reduced market risk

▪ Double-digit APE growth, mainly drivenby capital-market related2 products

▪ Already substantial share of Life Germany premiums (~20%)

November 2020

New book 2018

EDL2018

2018 2019

Biometric

Capital-market related3.4

3.0 2.9 3.0

2.52.2 2.1 1.9

2016 2017 2018 2019

Avg. yield

Avg. guarantee (incl. ZZR)

134

7529 104

71% 56%59%

41%44%

29%

83%

17%

+29%

Backup: ERGO



Maintaining leading positions in Health

Business development on track

▪ Strong and sustainable earnings contribution

▪ Focus on profitable and low-risk supplementary insurance without ageing reserves

▪ Launch of integrated mobile application “Meine DKV”

Health

Germany

€5.6bn1

(60%)

1 Travel included. 2 GWP. 3 Local GAAP for DKV and ERGO Krankenversicherung AG.

Digital Ventures

(thereof Health €0.6bn)

Life Germany

Extension of market leading position in supplementary insurance

▪ Market leader with >20% market share2; strong new business development

▪ Expansion in long-term care and dental insurance

▪ Further integration of on- and offline sales channels with positive impact on new business

GWP

€9.2bn

Insured persons (supplementary insurance) 1,000

Business mix (GWP)€bn3

70.2% 69.6% 68.7% 68.0%

29.8% 30.4% 31.3% 32.0%

5.2 5.3 5.4 5.5

2016 2017 2018 2019

Supplementary insuranceComprehensive insurance

November 2020

5,084 5,116 5,171 5,231

2016 2017 2018 2019

+3%

Backup: ERGO


Key figures1 % 2017 2018 2019

Reinvestment yield 1.5 1.6 1.8

Average yield 3.0 2.9 2.8

Average guarantee2 2.1 2.0 1.9

Key financials1 €bn 2017 2018 2019

Free RfB 1.4 1.3 1.6

Terminal bonus fund 0.9 0.9 0.8

Unrealised gains 10.4 9.4 13.3

Accumulated ZZR 5.0 5.4 6.2

5.5

3.72.8 2.8

2.3

Peer 1 ERGO Peer 2 Peer 3 Peer 4

€bn

1.7

0.90.7 0.6 0.5

ERGO Peer 1 Peer 2 Peer 3 Peer 4

Life Germany Health Germany GWP – Market view3

Comprehensive insurance – ERGO number 2 in German market

Supplementary insurance – ERGO clear market leader

1 German GAAP figures. 2 Actuarial interest rate incl. effect from ZZR. 3 Market data as at 2018. November 2020


Additional information

Backup: ERGO

3.23.3

3.43.5

2016 2017 2018 2019


Property-casualty Germany –

Ongoing profitable premium growth

2020 level already almost achieved in 2019

▪ Sustainable improvement in 2019 driven by

▪ Reduction of claims ratio: favourable claims development in basic losses driven by improved underwriting (esp. commercial lines) and claims management (esp. motor) as well as lower nat-cat and man-made losses

▪ Improvement of cost ratio: stable cost development despite strong growth and supported by reduced fixed cost level

▪ Lowest combined ratio since 2011

Motor Business development on track

▪ Strong premium growth in 2019 – increases in commercial and retail

▪ Simplified product approach and process optimisation with first successes:

▪ Successful renewal of new motor insurance – simplified product approach continued with legal protection and business content insurance

▪ Digitalisation of claims processes with focus on speed and improved efficiency in motor completed; customer satisfaction increased

Gross premiums written€bn

9899

96

9392

97.0 97.5

96.0

92.3

2016 2017 2018 2019 2020

ESP guidance

Actual

Combined ratio %

Personal accident

Fire/Property

Liability

OtherMarine

Legal protection

+3.6%

GWP

€3.5bn

November 2020

CAGR +3.1%

Backup: ERGO

Consolidated portfolio with leading positions in core markets

▪ Premium increase1 in both core and growth markets

▪ Strong earnings level continued despite of disposal effects

▪ Continuous improvement of combined ratio supported by already achieved sustainable cost savings of €35m (net, accumulated)


International –

Sustainable increase of profitability

Core

markets

€3.9bn(82%)

Other

98.0

95.394.6 94.3

2016 2017 2018 2019

Successful expansion in selected growth markets

▪ India (P-C, Health): HDFC ERGO with substantial premium growth (+8%3); announced merger with Apollo Munich Health will create second-largest private accident/health insurer

▪ China (Life): Significant premium increase (+48%3); regional presence expanded to Hebei in 2019, third province after Shandong and Jiangsu

GWP1

(without JVs)

€4.7bn

1 Adjusted for portfolio streamlining. 2 Non-adjusted International: €4.9bn. 3 2019 vs. 2018. 4 ERGO share in ERGO China Life, HDFC ERGO, ThaiSri ERGO.

in addition (JVs):

Growth markets

€0.7bn

Combined ratio%

Gross premiums written in growth markets4

€m

November 2020

316

567 592696

2016 2017 2018 2019

CAGR +30%

Backup: ERGO

Financial highlights

5Image: Vertigo3d / Getty ImagesiStockphoto


Munich Re posts a decent Q3 result

considering high major losses

November 2020

Backup: Financial highlights 9M 2020 – Group

Munich Re Q3 2020 (9M 2020)

Technical result€m

Investment result€m

Net result€m€199m (€999m)

Net result

Reinsurance result of €63m

impacted by COVID-19 related

claims and other major losses –

strong ERGO result of €136m

Return on investment1

2.7% (2.8%)

Reinsurance: 3.7% – benefited from

disposal gains

ERGO: 2.1% – impacted by equity

impairments and derivative losses

Shareholders' equity€29.6bn (–3.1% vs. 31.12.)

Return on equity1: 3.6% (5.9%)

Solvency II ratio: 216%

1 Annualised. 2 For prior-year basic losses.

Property-casualty: 112.2% (106.1%) – Major-loss ratio: 26.7% (21.0%); Reserve releases2: –4.0% (–4.0%) –net result of –€23m (€446m)

Property-casualty Germany: C/R: 90.9% (92.2%) – net result of €48m (€120m)

International: C/R: 92.5% (92.6%) – net result of €57m (€162m)

2,150 1,691

5,826 5,308

Q32019

Q32020

9M2019

9M2020

865

199

2,490

999

Q32019

Q32020

9M2019

9M2020

538

87

2,431

606

Q32019

Q32020

9M2019

9M2020

Life and Health: Technical result incl. fee income: €56m (€160m) – Negative COVID-19 impact of ~€100m in Q3 – net result of €86m (€153m)

L&H Germany: RoI: 2.2% (2.6%) – net result of €31m (€99m)

Reinsurance ERGO


Reinsurance – Property-casualty

Backup: Financial highlights 9M 2020 – Reinsurance

November 2020

Gross premiums written €m Major result drivers €m

9M 2019 16,920

Foreign exchange –17

Divestments/investments 0

Organic change 1,576

9M 2020 18,479

▪ Organic growth across almost all lines driven

by business expansion and rate increases in

traditional reinsurance …

▪ … as well as in our Risk Solutions portfolio

Investment result

▪ 9M: Gains on fixed-income/ real estate disposals

and derivatives clearly exceed write-downs on

equities

▪ Q3: Disposal gains on fixed income and strategic

equity investments

▪ Q3: Return on investment: 3.9%

Other

▪ FX result of €170m in 9M (9M 2019: €251m),

thereof –€20m in Q3 (Q3 2019: €137m)

Technical result

▪ COVID-19-related claims of ~€2.1bn in

9M (thereof ~€0.7bn in Q3), contingency

business accounts for the largest share

▪ Expense ratio improved due to cost

reductions and premium growth

▪ Underlying performance remains very

strong – normalised combined ratio at

~97% in Q3 and 9M

9M 2020 9M 2019 Q3 2020 Q3 2019

Technical result –182 1,453 –1,635 –399 87 –486

Non-technical result 762 341 421 334 306 28

thereof investment result 1,834 1,572 261 646 715 –69

Other –115 –259 144 42 71 –29

Net result 466 1,535 –1,069 –23 464 –486


Reinsurance – Property-casualty

Combined ratio


November 2020

2018 99.4

2019 100.2

9M 2020 106.1

Q3 2020 112.2

◼ Expense ratio◼ Basic losses ◼ Major losses

Major losses Nat cat Man-made

Reservereleases1

Normalised combined ratio2

9M 2020 21.0 5.1 15.9 –4.0 97.0

Q3 2020 26.7 8.3 18.4 –4.0 97.0

Ø Annual

expectation ~12.0 ~8.0 ~4.0 ~–4.0

1 Basic losses prior years, already adjusted for directly corresponding sliding-scale and profit-commission effects. 2 Based on reserve releases of 4%-pts. Normalised combined ratio reflects a one-off shift between commissions and non-technical result of €29m in Q3 2020 (corresponding to –0.5%-pts. in Q3 and –0.2%-pts. in 9M).

%

53.6

51.4

54.8

55.6

11.6

15.2

21.0

26.7

34.2

33.6

30.3

29.9

105.1

97.3

86.9

103.9

111.6106.0

99.9

112.2

Q42018

Q12019

Q22019

Q32019

Q42019

Q12020

Q22020

Q32020


Reinsurance Life and Health


November 2020

Gross premiums written Major result drivers €m

9M 2019 8,625



Organic change 946

9M 2020 9,538

€m

Investment result

▪ 9M/Q3: Disposal gains on fixed income

investments from ordinary portfolio turnover

clearly exceed write-downs on equities from H1

▪ Q3: Positive one-off effect from disposal of

strategic equity investments

▪ Q3: Return on investment: 3.2%

Other

▪ FX result of –€5m in 9M (9M 2019: €83m),

thereof –€19m in Q3 (Q3 2019: €41m)

▪ Organic growth mainly in Asia and Europe,

but also some growth across North America

▪ Asia: Several new transactions and increases

of shares/volumes under existing treaties

▪ Europe: Positive impact from longevity

transactions concluded in Q2

Technical result incl. fee income

of €56m (€160m)

▪ COVID-19-related claims of ~€100m in Q2

and again inQ3, dominated by US mortality

▪ In North America: non-COVID-19-related

claims higher than expected and some

impact from lower interest rates on claims

reserves …

▪ … largely offset by strong results in

Europe and Asia as well as better-than-

expected performance in Australia

▪ Ongoing pleasing fee income

9M 2020 9M 2019 Q3 2020 Q3 2019

Technical result 31 322 –291 10 194 –184

Non-technical result 207 369 –162 110 103 7

thereof investment result 639 866 –227 239 279 –40

Other –85 –75 –10 –34 –15 –19

Net result 153 617 –464 86 282 –196


ERGO Life and Health Germany

Backup: Financial highlights 9M 2020 – ERGO

November 2020

9M 2019 6,912



Organic change –193

9M 2020 6,718


▪ Life (–€80m): Growth through new products

only partially compensating for ordinary

attrition of back book

▪ Health (–€141m): Increase in comprehensive

and supplementary insurance, negative

COVID-19 effect in Travel

▪ Digital Ventures (+€27m): Growth in health

insurance (esp. dental products)

Investment result

▪ 9M: Higher impairments of equities during

volatile capital market environment due to

COVID-19, partly offset by disposal gains

and hedging

▪ Q3: Decrease driven by higher impairments

and lower derivatives result; Return on

investment of 2.2%

Other

▪ FX result of –€91m in 9M (9M 2019: €54m),

thereof –€65m in Q3 (Q3 2019: €94m)

Technical result

▪ Q3: Interdependency between investment

and technical result – COVID-19 leading

to high intra-year volatility with positive

impact in Q3

▪ 9M: Decrease in Travel due to COVID-19;

improved result in Health

9M 2020 9M 2019 Q3 2020 Q3 2019

Technical result 331 234 96 306 81 225

Non-technical result –56 –28 –28 –166 –128 –38

thereof investment result 2,454 2,985 –531 697 985 –288

Other –175 –63 –112 –110 54 –164

Net result 99 143 –43 31 8 23


ERGO Property-casualty Germany


November 2020

9M 2019 2,804

Foreign exchange 5


Organic change 134

9M 2020 2,943

▪ Organic growth in almost all lines of business;

mainly driven by fire/property (+€43m),

liability (+€29m), motor (+€24m) and other

insurance (+€35m)

Investment result

▪ 9M: Disposal gains and hedging more than

offset impairments on equities

▪ Q3: Disposal gains partly offset impairments

on equities and lower derivatives result

▪ Q3: Return on investment of 1.5%

Technical result

Combined ratio of 92.2% in 9M at guidance

level, 90.9% in Q3 due to

▪ Strong premium development

▪ Nat-cat losses significantly below

expectations

▪ Minor COVID-19 effects from business

closure and event cancellation; lower costs


9M 2020 9M 2019 Q3 2020 Q3 2019

Technical result 237 231 6 92 81 11

Non-technical result –34 –80 47 –14 –20 6

thereof investment result 122 105 17 29 34 –5

Other –84 –46 –38 –30 –26 –4

Net result 120 105 15 48 36 13


ERGO Property-casualty Germany


November 2020

Combined ratio %

◼ Expense ratio◼ Loss ratio

2018 96.0

2019 92.3

9M 2020 92.2

Q3 2020 90.9

97.9 98.1

86.2

92.1 93.2 93.4 92.5 90.9

Q42018

Q12019

Q22019

Q32019

Q42019

Q12020

Q22020

Q32020

62.5

60.3

61.6

61.9

33.4

32.0

30.6

29.0

€mGross premiums written in 9M 2020 (9M 2019)

TOTAL

€2,943m(€2,804m)

Personal accident

449 (458)

Fire/property

585 (542)

Other

259 (224)

Motor

617 (593)

Liability

534 (505)

Legal protection

316 (318)

Marine

182 (165)


ERGO International


November 2020


9M 2019 3,657


Divestments/investments –103

Organic change 63

9M 2020 3,584

▪ Life (–€37m): Lower level due to run-down in

Belgium and reduced new business in Austria

related to COVID-19

▪ Health (+€66m): Positive business

development in Spain and Belgium

▪ P-C (–€102m): Decrease mainly driven by

portfolio streamlining in 2019, lower growth in

Poland due to COVID-19

Investment result

▪ 9M/Q3: Previous year impacted by

disposal gains due to portfolio

streamlining

▪ Q3: Return on investment of 1.6%

Other

▪ FX result of €0m in 9M (9M 2019: –€57m),

thereof €1m in Q3 (Q3 2019: –€38m)

Technical result

Highlights in Q3:

▪ Life: Decrease driven by Belgium

▪ Health: Good quarter due to seasonal

effects, tariff increases and favourable claims

development

▪ P-C: Ongoing good operational performance

(esp. Poland, Baltics), reduced attritional

claims and lower large losses

9M 2020 9M 2019 Q3 2020 Q3 2019

Technical result 189 191 –2 78 96 –18

Non-technical result 20 1 19 1 44 –42

thereof investment result 260 298 –38 81 138 –57

Other –47 –100 53 –22 –64 42

Net result 162 92 70 57 76 –19


ERGO International


November 2020

Combined ratio €mGross premiums written in 9M 2020 (9M 2019)

9M 2020

%

94.5 95.4 95.091.8

94.8 95.2

90.192.5

Q42018

Q12019

Q22019

Q32019

Q42019

Q12020

Q22020

Q32020

TOTAL

€3,584m(€3,657m)

Health

1,129 (1,062)

Property-casualty

1,985 (2,087)

Life

470 (507)

Lifethereof:

9M

2020

9M

2019

Austria 247 266Belgium 106 114

Healththereof:

9M

2020

9M

2019

Spain 660 615Belgium 469 448

P-Cthereof:

9M

2020

9M

2019

Poland 1,056 1,080

Legal protection 497 476

Greece 180 173

Baltics 145 144

Austria 79 74

91.7 89.6 89.7 89.4 85.5101.4 92.6

Poland Spain Austria Baltics Greece Legalprotection

Total

Investments

6Image: Nikada / Getty Images


Investment result9M 2020

Backup: Investments

November 2020

3-month reinvestment yield

Q3 2020 1.3%

Q2 2020 1.6%

Q1 2020 1.9%

Q3 2020Write-ups/

write-downsDisposal

gains/losses Derivatives

Fixed income –7 321 26

Equities –207 318 –103

Commodities/Inflation –2 0 22

Other –50 5 –10

9M 2020Write-ups/

write-downsDisposal

gains/losses Derivatives

Fixed income –22 1,358 605

Equities –1,671 551 78

Commodities/Inflation 39 0 38

Other –178 301 –91

€m Q3 2020 Return1 9M 2020 Return1 9M 2019 Return1

Regular income 1,536 2.4% 4,801 2.6% 5,133 2.8%

Write-ups/write-downs –265 –0.4% –1,832 –1.0% –285 –0.2%

Disposal gains/losses 644 1.0% 2,210 1.2% 1,671 0.9%

Derivatives2 –65 –0.1% 629 0.3% –208 –0.1%

Other income/expenses –159 –0.3% –500 –0.3% –485 –0.3%

Investment result 1,691 2.7% 5,308 2.8% 5,826 3.2%

Total return 3.8% 4.4% 12.1%

1 Annualised return on quarterly weighted investments (market values) in %. 2 Result from derivatives without regular income and other income/expenses.


Return on investment by asset class and segment9M 2020

Backup: Investments

November 20201 Annualised. 2 Including management expenses.

%1Regular income

Write-ups/-downs

Disposal result

Extraord. derivatives result

Other inc./exp. RoI

ᴓ Market value (€m)

Afs fixed-income 2.0 0.0 1.0 – – 3.0 134,700

Afs non-fixed-income 4.8 –13.4 4.4 – – –4.2 16,599

Derivatives 4.0 – – 27.5 –1.1 30.4 3,048

Loans 2.7 0.0 0.7 – – 3.4 64,917

Real estate 4.6 –1.2 3.2 – – 6.6 12,173

Other2 2.6 –0.3 0.1 – –3.6 –1.1 17,637

Total 2.6 –1.0 1.2 0.3 –0.3 2.8 249,073Reinsurance 2.6 –0.4 1.1 0.5 –0.3 3.5 95,282

ERGO 2.6 –1.3 1.2 0.2 –0.2 2.5 153,791

3.4%3.1% 3.1%

2.3%

2.9% 3.0% 3.2%3.4%

3.2% 3.1%2.7% 2.7%

3.0%

Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020

Return on investment Average

Investment portfolio9M 2020


Backup: Investments

83June 2020

Portfolio management in Q3Investment portfolio1

▪ Investments in longer term US and Australian

government bonds as well as short-term

bank bonds and ABS at the expense of

covered bonds

▪ Slight expansion of equity exposure despite

disposal of strategic equity investments

▪ Ongoing increase of infrastructure and private

equity investments

▪ Drop in reinvestment yield to 1.3%

1 Fair values as at 30.9.2020 (31.12.2019). 2 Deposits retained on assumed reinsurance, deposits with banks, investment funds (excl. equities), derivatives and investments in renewable energies and gold. 3 Net of hedges: 4.8% (6.4%). 4 Market value change due to a parallel downward shift in yield curve by one basis point, considering the portfolio size of assets and liabilities (pre-tax). Negative net DV01 means rising interest rates are beneficial.

Land and buildings

4.9 (4.7)


55.4 (53.9)

Shares, equity funds and participating interests3

5.9 (7.1)

Loans

25.8 (26.1)

TOTAL

€252bnMiscellaneous2

8.1 (8.1)

Reinsurance

ERGO

Munich Re

Assets Liabilities Assets

10

–13

–3

NetLiabilitiesPortfolio duration1 DV011,4 €m

%

6.9 (6.5)

9.9 (9.4)

8.9 (8.4)

7.4 (6.3)

10.6 (10.1)

9.7 (9.0)

51 (46)

138 (126)

189 (172)

41 (34)

151 (139)

192 (173)


Investment portfolioH1 2020

Backup: Investments

November 20201 Approximation – not fully comparable with IFRS figures. Fair values as at 30.6.2020 (31.12.2019). 2 Net of hedges: 4.5 (6.4%). 3 Deposits retained on assumed reinsurance, deposits with banks, investment funds (excl. equities), derivatives and investments in renewable energies and gold. 4 Non-fixed derivatives. 5 Non-fixed property funds and non-fixed bond funds

Investment portfolio

TOTAL

€250bn

Miscellaneous3

8.2 (8.1)

Land and buildings

4.9 (4.7)

Shares, equity funds and participating interests2

5.6 (7.1)

%

Miscellaneous %

Fixed-interest securities1

Loans1

Pfandbriefe/Covered bonds

11 (13)

Corporates

19 (18)

Banks

2 (2)

Governments/Semi-government

63 (63)

Structured products

3 (4)

TOTAL

€21bn

%


55.1 (53.9)

Loans

26.1 (26.1)

%

Deposits on reinsurance

39 (40)

Bank deposits

18 (19)

Investment funds5

11 (11)

Derivatives4

8 (6)

Other

24 (25)

Loans to policyholders/

mortgage loans

13 (13)

Pfandbriefe/Covered bonds

40 (41 )

Banks

1 (1)

Governments/Semi-governments

42 (41)

TOTAL

€138bn

TOTAL

€65bnCorporates

4 (4)

Cash/Other

1 (1)

Fixed-income portfolio


Fixed-income portfolioAllocation and regional structure – H1 2020

%

Structured products

2 (2)

Loans to policyholders/mortgage loans

4 (4)

Governments/

semi-government

54 (53)

Pfandbriefe/covered bonds

19 (21)

Corporate bonds

13 (13)

Cash/other

6 (5)

Bank bonds

2 (1)

TOTAL

€208bn

Backup: Investments

Approximation – not fully comparable with IFRS figures. Fair values as at 30.6.2020 (31.12.2019). November 2020

%Regional breakdownWithout With Total

policyholder participation 30.6.2020 31.12.2019

Germany 4.8 21.9 26.7 26.8

US 14.4 1.7 16.2 15.6

France 2.2 5.0 7.2 7.3

UK 2.8 2.0 4.8 5.1

Canada 4.0 0.7 4.7 4.7

Netherlands 1.5 2.9 4.5 4.3

Supranationals 0.7 3.0 3.7 3.6

Spain 0.9 2.1 3.0 3.1

Australia 2.6 0.4 3.0 3.1

Austria 0.5 2.1 2.6 2.6

Belgium 0.7 1.6 2.3 2.4

Ireland 0.7 1.6 2.3 2.2

Poland 1.3 0.5 1.8 1.8

Italy 0.7 0.8 1.5 1.3

Sweden 0.2 1.2 1.3 1.4

Other 6.6 7.9 14.5 14.6

Total 44.7 55.3 100.0 100.0


Fixed-income portfolioRating and maturity structure – H1 2020

Rating structure Market value

(€bn)

AAA

(%)

AA A BBB BB <BB NR

Total 213.3 42 24 13 12 3 1 51

Governments/semi-government 114.6 44 31 15 7 2 0 0

Pfandbriefe/covered bonds 41.2 76 21 2 0 – – 1

Corporate bonds (excluding bank bonds) 28.8 2 5 19 57 15 3 0

Bank bonds 3.4 1 19 40 34 3 1 1

Structured products 4.8 54 34 10 1 0 0 0

Maturity structure Average maturity

(years)

0-1 years

(%)

1-3

years

3-5

years

5-7

years

7-10

years

>10

years

n.a.

Total 9.5 10 13 14 13 14 34 3

Governments/semi-government 11.5 8 11 11 10 14 45 –

Pfandbriefe/covered bonds 6.5 7 14 18 21 20 20 –

Corporate bonds (excluding bank bonds) 7.5 9 17 22 15 12 25 –

Bank bonds 3.3 16 44 24 8 6 2 –

Backup: Investments

Approximation – not fully comparable with IFRS figures. Fair values as at 30.6.2020 (31.12.2019).1 Mainly loans to policyholders, mortgage loans and bank deposits.

November 2020


Fixed-income portfolioCorporate bonds and bank bonds – H1 2020

Backup: Investments

%Corporate bonds – Sector breakdown

1 Classified as Tier 1 and upper Tier 2 capital for Solvency purposes. 2 Classified as lower Tier 2 and Tier 3 capital for Solvency purposes. Approximation – not fully comparable with IFRS figures. Fair values as at 30.6.2020 (31.12.2019).

30.6.2020 31.12.2019

Industrial goods and services 14.1 14.2

Utilities 13.2 13.6

Oil and gas 11.2 10.9

Financial services 10.2 9.6

Telecommunications 8.2 8.0

Healthcare 7.5 7.5

Technology 6.0 6.0

Automobiles 4.5 3.9

Food and beverages 4.0 4.0

Personal and household goods 3.2 3.1

Media 3.1 3.6

Basic resources 2.9 3.5

Retail 2.8 2.7

Other 9.2 9.3

%Bank bonds – Regional breakdown

November 2020

%Cover pools

Total

Senior bonds Subordinated Loss-bearing 30.6.2020 31.12.2019

US 24.4 7.6 0.4 32.3 35.4Canada 11.2 0.0 0.0 11.2 11.4UK 7.7 1.3 0.2 9.1 7.2Germany 6.5 0.2 1.8 8.6 10.2Ireland 7.9 0.0 0.0 7.9 8.8France 5.2 0.7 0.0 6.0 5.0Netherlands 3.4 0.1 0.0 3.4 2.6Guernsey island 2.5 0.0 0.0 2.5 2.3Switzerland 1.9 0.0 0.0 1.9 1.3Other 16.0 1.2 0.0 17.2 15.8

TOTAL

€3.4bn

Senior

87 (82)

Subordinated2

11 (12)

Loss-bearing1

2 (6)


On- and off-balance-sheet reserves9M 2020

Backup: Investments

November 20201 Unrealised gains/losses from unconsolidated affiliated companies, valuation at equity and cash-flow hedging. 2 Excluding reserves from owner-occupied property. 3 Excluding insurance-related loans.

€m 31.12.

2018

31.12.

2019

30.6.

2020

30.9.

2020

in Q3

Market value of investments 231,876 247,310 249,858 251,928 2,070

Total reserves 22,002 33,120 35,321 36,040 719

On-balance-sheet reserves

Fixed-interest securities 4,953 10,738 13,058 13,867 809

Non-fixed-interest securities 1,817 3,632 2,355 2,366 11

Other on-balance-sheet reserves1 207 203 130 130 0

Subtotal 6,977 14,574 15,544 16,364 820

Off-balance-sheet reserves

Real estate2 4,769 5,600 5,631 5,668 37

Loans3 9,453 12,147 13,292 13,079 –213

Associates 803 799 855 930 75

Subtotal 15,024 18,546 19,778 19,676 –101

Reserve ratio 9.5% 13.4% 14.1% 14.3% 0.2 pp


Sensitivities to interest rates, spreads and equity marketsH1 2020

Backup: Investments

November 2020

1 Rough calculation with limited reliability assuming unchanged portfolio as at 30.6.2020. After rough estimation of policyholder participation and deferred tax; linearity of relations cannot be assumed. Approximation – not fully comparable with IFRS figures. 2 Sensitivities to changes of spreads are calculated for every category of fixed income portfolio, except government securities with AAA ratings. 3 Sensitivities to change in share prices are calculated for listed shares only; assumptions: equity impairments as soon as market value drops below acquisition cost and best-estimate calculation of hedging impact.

Sensitivity to risk-free interest in €bn (change in basis points) –50bps –25bps +50bps +100bps

Change in market value, gross +9.9 +4.8 –8.9 –16.9Change in on-balance-sheet reserves, net +2.5 +1.2 –2.3 –4.4Change in off-balance-sheet reserves, net +0.5 +0.2 –0.4 –0.8P&L (investment result), gross +0.6 +0.3 –0.5 –1.1P&L, net +0.3 +0.2 –0.3 –0.6

Sensitivity to spreads2 in €bn (change in basis points) +50bps +100bps

Change in market value, gross –6.3 –11.8Change in on-balance-sheet reserves, net –1.5 –2.8Change in off-balance-sheet reserves, net –0.3 –0.6P&L (investment result), gross –0.3 –0.6P&L, net –0.1 –0.3

Sensitivity to share prices3 in €bn (change in %) –30% –10% +10% +30%

Change in market value, gross –1.5 –0.7 +0.7 +2.0Change in on-balance-sheet reserves, net –0.6 –0.2 +0.3 +1.0P&L (investment result), gross –0.5 –0.2 –0.2 –0.7P&L, net –0.3 –0.1 –0.0 –0.1

Shareholder information

7Image: imaginima / Getty Images


Share information

Backup: Shareholder information

Key company data

Sector Insurance

Country Germany

Currency Euro

Accounting principles IFRS

Securities codes

Reuters MUVGn

Bloomberg MUV2

WKN 843002

ISIN DE0008430026

Type of share No-par-value registered shares

Votes Each share entitles the holder to one vote

Dividend Paid out once per year in cash

Trading venues All German stock exchanges plus Xetra

November 2020

Shares

(millions)

31.12.

2019

Acquisition of own shares in

9M 2020

Retirement of own shares in

9M 2020

30.9.

2020

Shares in

circulation141.5 –1.4 – 140.1

Treasury

shares2.9 1.4 –4.2 –

Total 144.3 – –4.2 140.1

Weighted average number of shares in circulation

(millions)

148.7 143.6 140.3 140.1

2018 2019 9M 2020 Q3 2020


Mission of Investor & Rating Agency Relations


Responsibility

Munich Re’s communication with the capital market /

financial community

Main objective

Active communication to support a fair capital-market

valuation of Munich Re shares and outstanding bonds

External communication

Increase transparency

on financial performance, strategy and expectations

about future perspectives within the principles of a

credible, accurate, complete and timely provision of

relevant information

Target

Achieving a fair valuation and optimising the cost of

capital by increasing information efficiency between

Munich Re and the financial community while

developing a relationship of trust with our investor base

Internal communication

Transmission

of investors’ and creditors’ demands, and the

capital markets’ perception of Munich Re, to

management and staff

Target

Support management in the setting of ambitious

targets as well as in the execution of a value-

based and shareholder-oriented strategy

We aim to enhancing Munich Re’s visibility and attractiveness in the international financial community

November 2020


Financial calendar


November 2020

2020

8 December Investor Day

2021

25 FEBRUARYBalance sheet media conference for 2020 financial statementsAnalysts' and Investors' call

17 MARCH Annual report (Group), Annual report (Company)

28 APRIL Annual General Meeting 2021

6 MAY Quarterly statement as at 31 March 2021

10 AUGUST Half-year financial report as at 30 June 2021

9 NOVEMBER Quarterly statement as at 30 September 2021


For information, please contact


Investor Relations Team

Christian Becker-Hussong

Head of Investor & Rating Agency Relations

Tel.: +49 (89) 3891-3910

E-mail: [email protected]

Thorsten Dzuba

Tel.: +49 (89) 3891-8030


Christine Franziszi

Tel.: +49 (89) 3891-3875


Ralf Kleinschroth

Tel.: +49 (89) 3891-4559


Andreas Silberhorn (Rating agencies)

Tel.: +49 (89) 3891-3366


Ingrid Grunwald (ESG)

Tel.: +49 (89) 3891-3517


Maximiliane Gerstner (ERGO)

Tel.: +49 (211) 477-7483


Münchener Rückversicherungs-Gesellschaft | Investor & Rating Agency Relations | Königinstraße 107 | 80802 München, Germany

Fax: +49 (89) 3891-9888 | E-mail: [email protected] | Internet: www.munichre.com

November 2020


Disclaimer

November 2020

This presentation 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. Obvious fluctuations in

the incidence of major losses as well as pronounced volatility of the capital markets and exchange rates –

as well as the special features of IFRS accounting make an accurate forecast of results impossible.

Moreover, there is considerable uncertainty regarding the further development of the coronavirus pandemic.

The Company assumes no liability to update these forward-looking statements or to make them conform

to future events or developments. Figures from Q1 2019 onwards are restated reflecting the new cost-

allocation method.

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