AI assistant
Muenchener Rueckversicherungs-Gesellschaft AG — Earnings Release 2011
Feb 2, 2012
6208_ip_2012-02-02_ba33bf04-d073-4d8c-9be2-9c2927c5a895.pdf
Earnings Release
Open in viewerOpens in your device viewer
PRELIMINARY KEY FIGURES 2011 AND RENEWALS
Telephone conference with analysts and investors
2 February 2012
Jörg Schneider Torsten Jeworrek
| Preliminary key figures 2011 | 2 |
|---|---|
| Renewals in property-casualty reinsurance | 8 |
| Summary | 14 |
| Backup | 16 |
| Overview – Financial highlights 2011 natural catastrophe losses Munich Re (Group) |
Resilient result given sovereign debt crisis and high | |
|---|---|---|
| Net profit | Shareholders' equity | Investment result |
| €0.63bn in Q4 (FY: €0.71bn) | €23.3bn (+4.9% in Q4) | RoI of ~3.4%1 |
| Impact from large nat cat | Strong capital position allows | Stable regular income given |
| losses and volatile capital | us to maintain an attractive | low yield environment – |
| markets mitigated by sound | dividend of €6.25 per share | disposal gains compensating |
| underlying performance – | (subject to approval of | for impairments (Greek |
| positive tax contribution | Supervisory Board and AGM) | government bonds) |
| Reinsurance | Primary insurance | Munich Health |
| Combined ratio | Consolidated ERGO result | Combined ratio |
| 101.8% in Q4 (FY: 113.6%) | €0.09bn in Q4 (FY: €0.35bn) | 100.4% in Q4 (FY: 99.4%) |
Substantial premium growth to €6.1bn in 2011 Net result distorted by adverse currency effects Impacted by several nonrecurring items Achieving a consolidated result at prior year's level
1Q1–4 2011. Adjusted for impact on insurance risk transfer to the capital markets: RoI ~3.3%.
P–C: Nat cat loss ratio 22.7%
Costliest year ever in terms of natural catastrophe losses
in Q4 (FY: 28.8%)
Key financial figures – Clearly positive annual result achieved Preliminary key figures 2011
| €bn | Q1–4 2011 | Q1–4 2010 | Q4 2011 | Q4 2010 |
|---|---|---|---|---|
| Gross premiums written | 49.6 | 45.5 | 12.4 | 11.5 |
| Reinsurance1 | 26.5 | 23.6 | 6.5 | 6.0 |
| Primary insurance1 | 17.6 | 17.5 | 4.4 | 4.3 |
| Munich Health1 | 6.1 | 5.1 | 1.6 | 1.3 |
| Investment result | 6.8 | 8.6 | 1.9 | 1.4 |
| Operating result | 1.2 | 4.0 | 0.8 | 0.6 |
| Taxes on income | –0.55 | 0.69 | –0.14 | –0.17 |
| Consolidated result | 0.71 | 2.43 | 0.63 | 0.48 |
| Reinsurance1 | 0.77 | 2.10 | 0.67 | 0.44 |
| Primary insurance1 | 0.76 | 0.66 | 0.34 | 0.22 |
| Munich Health1 | 0.05 | 0.06 | 0.01 | 0.01 |
| Combined ratio reinsurance (%) | 113.6 | 100.5 | 101.8 | 96.0 |
| Combined ratio primary insurance (%) | 97.8 | 96.8 | 100.9 | 100.4 |
| Combined ratio Munich Health (%) | 99.4 | 99.7 | 100.4 | 100.0 |
| Dividend per share (€) | 6.252 | 6.25 | ||
| €bn | 31.12.2011 | 30.9.2011 | 30.6.2011 | 31.12.2010 |
| Shareholders' equity | 23.3 | 22.2 | 20.3 | 23.0 |
| Total investments | 201.7 | 199.7 | 193.7 | 193.1 |
1 Segmental figures, before elimination of intra-Group transactions across segments. 2 Subject to approval of Supervisory Board and AGM.
Emphasis on highly rated securities – Further reduction of weaker sovereign bonds Munich Re (Group) – Investments – Fixed-income portfolio
| Fixed-income portfolio1 | Government bonds per country2 | ||||
|---|---|---|---|---|---|
| Loans to policyholders/ Mortgage loans 3% (3%) |
% | Without P/H4 participation |
With P/H4 participation |
Total 31.12.2011 |
Total 31.12.2010 |
| Structured products | Germany | 9.4 | 25.6 | 35.0 | 30.7 |
| Government/ 3% (4%) Semi-government2 |
USA | 16.9 | 0.0 | 16.9 | 15.8 |
| Corporates 48% (47%) 10% (9%) |
Canada | 7.1 | 0.2 | 7.3 | 7.1 |
| UK | 5.6 | 0.3 | 5.9 | 6.3 | |
| Banks 8% (9%) |
France | 2.7 | 2.2 | 4.9 | 5.4 |
| TOTAL3 Thereof 40% €178bn cash positions |
Austria | 0.6 | 2.6 | 3.2 | 3.4 |
| Italy | 0.6 | 1.9 | 2.5 | 7.4 | |
| Spain | 0.3 | 1.6 | 1.9 | 2.7 | |
| Ireland | 0.2 | 1.4 | 1.6 | 2.4 | |
| Greece | 0.0 | 0.4 | 0.4 | 1.4 | |
| Portugal | 0.0 | 0.4 | 0.4 | 0.8 | |
| Pfandbriefe/ | Other | 13.1 | 6.9 | 20.0 | 16.6 |
| Covered bonds 28% (28%) |
Total | 56.5 | 43.5 | 100.0 | 100.0 |
Preliminary key figures 2011 and renewals 7 Incl. loans, parts of other securities, other investments and cash positions. Fair values as at 31.12.2011 (31.12.2010). 2 Thereof 7% inflation-linked bonds. 3Additional inflation-linked exposure in swaps 2% and bank and corporate exposure in credit default swaps 2% of fixed-income portfolio. 4 P/H = policyholder. Economic view – not fully comparable with
IFRS figures.
| Agenda | |
|---|---|
| Preliminary key figures 2011 | |
| Renewals in property-casualty reinsurance | |
| Summary | |
| Backup | |
| Preliminary key figures 2011 and renewals 8 |
Renewals in property-casualty reinsurance – Market environment First evidence of improved prospects – Differentiated picture per segment and market Largely stable capital base despite high nat cat losses Capital base still artificially inflated as a consequence of persisting low interest-rate environment – with negligible influence on price development so far Significant increases in individual segments and/or markets with recent major loss experience … … while softening of prices in other segments seems to have come to a halt in primary insurance and reinsurance Market environment Overall abundant capacity provided … … however, for high excess covers and late placements some capacity constraints Ongoing competitive environment, but generally, disciplined behaviour of reinsurers Competitors Supply Current economic environment limits clients' growth opportunities Tight reinsurance budgets cause clients to retain more business to offset price increases Introduction of RMS11 has hardly changed demand, despite higher modelled exposure Clients Demand
Preliminary key figures 2011 and renewals 10
Portfolio quality improved in competitive environment Munich Re portfolio – Premium change in major business lines
| Property | Casualty | Specialty lines | |||||
|---|---|---|---|---|---|---|---|
| Business line | Proportional | XL | Proportional | XL | Marine | Credit | Aviation |
| Premium split1 | 32% | 11% | 31% | 6% | 11% | 5% | 3% |
| Price change |
1.6% | 9.6% | 0.0% | 4.7% | 0.8% | ||
| –3.9% | –0.7% | ||||||
| Volume change |
2.0% | 14.3% | |||||
| –1.5% | –12.8% | –4.3% | –2.2% | –7.6% | |||
| PRICE VOLUME Nat cat business with regionally different price Deliberate top-line reduction in the case of changes – USA (+10%) and Australia (+35% up to inadequate price levels or in unattractive segments, |
150%) while Europe remains flat, as RMS11 has not yet been applied in the market
Renewals in property-casualty reinsurance – Munich Re portfolio
- Strong contribution by casualty XL due to active portfolio management decisions
- especially storm Europe, motor XL casualty and marine
- Extension of profitable client relationships (e.g. motor prop. casualty) and selective new business
1 Relative premium share in relation to total renewable business in January.
| Renewals in property-casualty reinsurance Concrete initiatives – Successful active portfolio |
|||||
|---|---|---|---|---|---|
| management | |||||
| Decrease | Examples | ||||
| Strict termination of unprofitable business |
European property | ~€160m | Mainly Germany, France, UK and Spain |
||
| and reduction of portfolios |
Marine | ~€90m | Traditional business | ||
| European casualty (without strategic partnerships) |
~€60m | Mainly Germany, UK third party liability and Netherlands |
|||
| Motor XL | ~€30m | United Kingdom | |||
| Selective growth | Examples | ||||
| Strategic growth | Strategic business expansion |
~€350m | Strong price increases in recovering markets (e.g. proportional UK motor) |
||
| Growth with tailor made structured solutions |
Quota share deals | ~€90m | Mainly in Asia and agro business |
| Agenda | |
|---|---|
| Preliminary key figures 2011 | |
| Renewals in property-casualty reinsurance | |
| Summary | |
| Backup | |
| Preliminary key figures 2011 and renewals 14 |
Summary
Munich Re – Crisis-proven and geared to sustainable value creation
Key takeaways
Resilient earnings in a challenging environment with high claims activity as well as low capital market yields and sovereign debt crisis
Pleasing development in the January renewals based on strict bottom-line orientation in tandem with profitable strategic and opportunistic growth – improving pricing prospects for coming renewals during 2012
Solid capitalisation and resilient operating performance of diversified business model enable Munich Re to maintain an attractive dividend level of €6.25 per share1
Outlook 20122 : Net result expected to be at the level achieved prior the year 2011 – Significantly improving technical result
1 Subject to approval of Supervisory Board and AGM. 2 Assuming normal claims activity and stable capital markets.
| Agenda | |
|---|---|
| Preliminary key figures 2011 | |
| Renewals in property-casualty reinsurance | |
| Summary | |
| Backup | |
| Preliminary key figures 2011 and renewals 16 |
| Strong organic growth | Backup: Preliminary key figures 2011 – Premium development | |
|---|---|---|
| €bn | ||
| Gross premiums written Q1–4 2010 |
45.5 | |
| Foreign-exchange effects |
–0.6 | |
| Divestment/ Investment |
0.3 | |
| Organic change | 4.4 | |
| Gross premiums written Q1–4 2011 |
49.6 | |
| Breakdown by segment (consolidated, €bn) |
Reinsurance Property-casualty 16.5 (33%) (▲8%) Reinsurance Life: 9.5 (19%) (▲ 22%) Munich Health 6.0 (12%) (▲ 20%) |
Primary insurance Property-casualty 5.6 (11%) (▲ 2%) Primary insurance Life: 6.3 (13%) (▲ –3%) Primary insurance Health: 5.7 (12%) (▲ 4%) |
| Backup: Shareholder information Financial calendar |
|
|---|---|
| FINANCIAL CALENDAR | |
| 13 March 2012 | Balance sheet press conference for 2011 financial statements |
| 14 March 2012 | Analysts' conference, London |
| 29 March 2012 | Morgan Stanley "2012 European Financials Conference", London |
| 26 April 2012 | Annual General Meeting, Munich |
| 8 May 2012 | Interim report as at 31 March 2012 |
| 15 May 2012 | Deutsche Bank "German, Swiss & Austrian Conference", Frankfurt |
| 21 May 2012 | Deutsche Bank "2012 Global Financial Services Investor Conference", New York |
| 22–23 May 2012 | Credit Suisse "West Coast Conference", San Francisco |
| 23 May 2012 | Autonomous "Rendez-Vous 2012", London |
| 13 June 2012 | Goldman Sachs "Annual Financials Conference", Brussels |
| 7 August 2012 | Interim report as at 30 June 2012 |
| 7 November 2012 | Interim report as at 30 September 2012 |
For information, please contact Backup: Shareholder information
| INVESTOR RELATIONS TEAM | ||||||
|---|---|---|---|---|---|---|
| Christian Becker-Hussong | Ralf Kleinschroth | Thorsten Dzuba | ||||
| Head of Investor & Rating Agency Relations Tel.: +49 (89) 3891-3910 E-mail: [email protected] |
Tel.: +49 (89) 3891-4559 E-mail: [email protected] |
Tel.: +49 (89) 3891-8030 E-mail: [email protected] |
||||
| Christine Franziszi | Britta Hamberger | Andreas Silberhorn | ||||
| Tel.: +49 (89) 3891-3875 E-mail: [email protected] |
Tel.: +49 (89) 3891-3504 E-mail: [email protected] |
Tel.: +49 (89) 3891-3366 E-mail: [email protected] |
||||
| Dr. Alexander Becker | Andreas Hoffmann | Ingrid Grunwald | ||||
| Head of External Communication ERGO Tel.: +49 (211) 4937-1510 E-mail: [email protected] |
Tel.: +49 (211) 4937-1573 E-mail: [email protected] |
Tel.: +49 (89) 3891-3517 E-mail: [email protected] |
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