analysts' and investors' call 2018

132 Pages·2017·2.07 MB·English

by  Munich Re

Image: Getty Images/Oaltindag
ANALYSTS’ AND INVESTORS’ CALL 2018
Executing business opportunities
Munich, 15 March 2018
Agenda
1 Executing business opportunities 3 ERGO
Joachim Wenning Markus Rieß
2 20
2 Group Finance 4 Reinsurance
Jörg Schneider Torsten Jeworrek
10 29
5 Additional information
40
Analysts' and Investors' Call 2018 2
Executing business opportunities
A year of record-high insured natural catastrophe losses
Record-high insured Munich Re delivers
nat cat losses of US$ 135bn good underlying results
IFRS NORMALISED
Overall nat cat losses NET INCOME NET RESULT
Insured nat cat losses
0.4 2.2
€ ~€
bn bn
Diversification Adjusted for severe nat cats
proved beneficial in line with guidance1
GERMAN GAAP (HGB) SOLVENCY II
DISTRIBUTABLE EARNINGS RATIO
4.0 244
€
bn %
Safeguards Well above
capital repatriation target capitalisation
1980 1985 1990 1995 2000 2005 2010 2015
1 Adjusted for 8%-pts. natcat expectation. Analysts' and Investors' Call 2018 3
Executing business opportunities
Despite loss volatility, Munich Re proves
a superior risk/return profile
RoE exceeds % Performance vs. major peers %
cost of capital and insurance index1
Total shareholder return (p.a.)
16
Value creation
20
12
Peer 4
15
Peer 3
8
Average cost of capital 10 Peer 1 Peer 5 Peer 7
4 Index
5 Peer 6
0
2005 2011 2017 0
Peer 2
10 8
~ % > ~ %
–5
20 25 30 35 40
13-year average RoE Average cost of capital
Volatility of total shareholder return (p.a.)
1 Annualised total shareholder return defined as price performance plus dividend yield over the period from 1.1.2005 until 28.2.2018; based on Bloomberg data in local currency; volatility Analysts' and Investors' Call 2018 4
calculation with 250 trading days per year. Peers: Allianz, Axa, Generali, Hannover Re, Scor, Swiss Re, ZIG, StoxxEurope 600 Insurance (“index”).
Executing business opportunities
Strong balance sheet allows us to
execute business opportunities
CAPITAL SOLVENCY DEBT
II
STRONG BALANCE SHEET
facilitating earnings growth
enabling
CAPITAL DEPLOYMENT HIGH CAPITAL RETURN
Sustainable dividend per share growth

Organic growth €8.60
25
~€
bn

M&A
Total pay-out
3.10
2005–2017

(dividends and
Partnerships
share buy-backs2)
2005 20171
1 Subject to approval of AGM. 2 Further continuation of €1bn share buy-back until AGM 2019. Analysts' and Investors' Call 2018 5
Executing business opportunities
Executing strategic priorities of the Group (1/2)
STRATEGIC PRIORITIES
Earnings stabilisation and Digital Leanness,
increase of earnings power transformation complexity reduction
Focus on  Focus on leveraging  Focus on business and
 Profitability all our strengths1 smart governance
 De-focus from rest, and
 Business development
divest from sub-critical
 Building new business models
business
1 Details provided at the Investor Day on 21 November 2017. Analysts' and Investors' Call 2018 6
Executing business opportunities
Executing strategic priorities of the Group (2/2)
P $ Corporate venture-capital activities
U
O $ Munich Health integration into ERGO and Reinsurance
R
G $ Interlocked business model
Improve
and grow
O $ German life back-book: New platform
G
$ Portfolio streamlining of international operations
R
E $ nexible, Mobility Solutions, Digital IT, …
E
Business growth in traditional Reinsurance
C
N
A $ Business growth in Risk Solutions
$
R
Run growing traditional book at lower cost
Transformation U
Invest and new S Increasing investments into transformation competence
N
and divest businesses and business cases: Digital Partners, IoT, data and
I $
E
analytics, cyber, multi-channel distribution, …
R
Analysts' and Investors' Call 2018 7
Executing business opportunities
Leverage traditional value creation and transform
businesses to reduce distance to end customer
–ILLUSTRATIVE –
Data companies PI incumbents RI incumbents Capital market
Underwriting-
driven Reinsurance
Digital services Reinsurance
UW & capacity
Partnerships Digital Partners
s
s
e AMIG, MR Syndicates, CIP1,
n AMIG, MR Syndicates, CIP,
isub le Digital operations SSppeecciSiaapllttyey c MMiaaaltrrikekesettss,, ……
d
e o
c m
n Internet of Things HSB
a
r
u
s
n
I Pure online sales nexible
ERGO
Hybrid customer ERGO
Push sales
Sales-driven
Distance to end-customer
(insurance value-chain perspective)
1 Corporate Insurance Partner. Analysts' and Investors' Call 2018 8
Executing business opportunities
Medium-term ambition –
Pushing IFRS earnings beyond current level
~€2.8bn ERGO >€0.5bn by 2020
~€250m Strategy Programme well on track
MIDPOINT ~€250m  Substantial investments to strengthen
~€2.3bn position as leading primary insurer
 Cost savings to improve competitiveness
REINSURANCE ~€2.3bn by 2020
Improving earnings quality in property-casualty
 Growth initiatives to increase underwriting
result, including cost savings
 Prudent assumption as regards reserves –
in tendency lower investment disposal gains,
reserve releases cautiously set at 4%-points
2018 ERGO REINSURANCE 2020
Analysts' and Investors' Call 2018 9
Group Finance
Analysts' and Investors' Call 2018 10