MUNICH RE Munich Re Group
Equity story
April 2024
Equity story
Why invest in Munich Re
Diversified business model
Attractive dividends
Leading | 2 | 1 | |||
3 | |||||
global reinsurer | |||||
✓Good sustainability ratings
Strong capital position
Digital transformation opportunities
Munich Re - Equity story | April 2024 | 2 |
Equity story
Ambition 2025 - Reinsurance
Core P-C
Reinsurance
Leading global reinsurer in Property-casualty
Global Specialty Insurance
Leading specialty insurer in selective businesses
Life & Health
Reinsurance
Leading global reinsurer in Life and Health
Grow | Increase | Build |
in hardening markets | share of GSI by leveraging | on growth from underlying |
and strengthen footprint | on strong core | markets and strong |
Scale | foundation |
Expand | Develop | Drive |
in new business | new products and improve | new business |
opportunities | operations | opportunities |
Shape
Succeed
Shareholders
Industry leading RoE
Clients
Long-term partner - superior
products, experience and capacity
Employees
Attractive employer - skill driven, digital culture, risk entrepreneurial
Innovation | ▪ | Develop strategic options based on our expertise in global risk-transfer and beyond | Communities | |
Comprehensive climate | ||||
Start monetizing | ▪Start monetizing on mature investments | |||
strategy matching | ||||
▪Continuously explore playing fields for further strategic options | Paris Agreement | |||
Munich Re - Equity story | April 2024 | 3 |
Equity story
Ambition 2025 - ERGO
Germany
Top player position with market leading profitability
International
Top peer profitability in European markets
Digital projects and technology
Technology enabled value chain and transfer of digital assets
Secure profitability and market position through first-rate customer experience
Scale
Strengthen Hybrid Customer-centric business model
Shape
Increase net profit contribution of the international portfolio
Expand cross-border synergies and utilization of technological solutions
Build up strong growth
in B2B2C and pure direct player
Continue modernization of legacy IT-infrastructures
Explore emerging ecosystems in Mobility and Travel; enhanced digital footprint in all segments
"Digital first" in all customer- facing applications
Shareholders
Top peer group RoE
Customers
Customer-centric processes, products and services
Employees
Attractive work environment through new ways of working and technology
Strengthen digital employer branding
Leverage the strengths, innovative spirit
and diversity of our workforce
Communities
Partner of local communities Clearly set goals according to the Paris Agreement
Munich Re - Equity story | April 2024 | 4 |
Equity story
Delivery on our Ambition
Ambition | Achievements | ||||
2025 | in 2023 | ||||
RoE | 14-16% | 15.7% | |||
EPS growth1 | ≥5% | +37.8%2 | |||
DPS growth1 | ≥5% | +29.3%3 | |||
175-220% | 267%4 | ||||
Solvency II ratio | |||||
1 CAGR - compound annual growth rate 2020-25 (EPS 2020 normalised, based on IFRS 4). 2 Compared to published EPS figure based on IFRS 4. 3 Subject to the approval of the Annual General Meeting. 4 Proposed dividend already deducted. Considering share buy-back the Solvency II ratio stands at ~ 259%. 5 Source: Bloomberg. Peers: Allianz, Axa, Generali, Hannover Re, Scor, Swiss Re, Zurich.
Total shareholder return (TSR)5
01.01.2020 - 31.12.2023 (%) | |||
68.9 | |||
47.0 | 44.4 | ||
37.5 | 36.3 | 32.6 | |
15.1 | |||
-14.2 | |||
Munich Re | Peer group |
Munich Re - Equity story | April 2024 | 5 |
Equity story
Ambition 2025
% | 15.7 | RoE improvement | ||
13.5 | ||||
12.6 | Profitability well | |||
above cost of capital | ||||
3.8 | ||||
14-16% | ||||
2020 | 2021 | 2022 | 2023 | |
€ | 33.9 | EPS growth | ||
CAGR | Profitable expansion | |||
19.9 | across all lines of business | |||
19.4% | ||||
≥5% | ||||
20201 | … | 2023 |
€ | 15.0 | |
CAGR | ||
9.8 | 15.2% | |
2020 | … | 2023 |
Capital repatriation
Shareholders participate well above plan in strong earnings growth
DPS≥5% growth
1 Normalised, based on IFRS 4. | Munich Re - Equity story | April 2024 | 6 |
Equity story
Return on Equity improvement
Efficient capital management
Leveraging strong market position
Attractive insurance market environment makes it possible to earn returns above cost of equity
Flexibility to allocate capital
Strong balance sheet according to all metrics not imposing any restrictions in terms of business expansion
Aligning growth and capital repatriation
Managing capital efficiency by returning excess capital via growing dividends and share buy-backs
Munich Re successfully expands business, increases RoE and repatriates capital
all at once
Munich Re - Equity story | April 2024 | 7 |
Equity story
Capital repatriation
Total payout1 | ||
2014-2023 | ||
DPS | 15.0 | |
€ | ||
Dividends | 7,8 | €14.5bn |
Profit participation | ||
2014 | 2023 |
Dividends vs. share buy-backs
▪ Capital repatriation well-funded by high | |
amount of German GAAP distributable earnings | |
and sound solvency position | |
▪ | More than 85% of IFRS net earnings paid out to |
shareholders over the last 10 years | |
▪ | Strong dividend commitment - rebasing |
Share buy-backs
Reducing excess capital
Volume €bn
1,4 | 1,0 |
2014 | 2023 |
€8.4bn
dividend for FY 2023 to new earnings level |
▪ Flexible capital management with focus on |
shareholder value creation impacting size and |
frequency of share buy-backs |
1 Dividend payout relates to the proposed dividend of the financial year, e.g., for 2023 dividend paid in 2024. Share buy-back is the actual amount purchased in a single year.
Equity story
Solvency II ratio
Development of the Solvency II ratio | SII sensitivities |
% | % |
220
175
267 | 270 | 279 | ||||
260 | ||||||
237 | 263 | 262 | 263 | |||
227 | ||||||
255 | ||||||
208 | 235 |
Optimal range |
Interest rates | Equity markets | Spread GOV | Spread CORP | Atlantic |
+/-50bps1 | +/-30% | +50bps | +50bps | Hurricane2 |
2019 | 2020 | 2021 | 2022 | 2023 | Developments 2023 vs. 2022 | |
EOF | 41.5 | 39.9 | 46.6 | 46.0 | €48.0bn | ▪ EOF growth mainly due to strong operating earnings, partially offset by the |
deduction of foreseeable dividends. Adjusted for share buy-back to be deducted in | ||||||
Q1 2024, the SII ratio stands at ~259% | ||||||
SCR | 17.5 | 19.2 | 20.5 | 17.7 | €18.0bn | ▪ SCR increase driven by strong new business growth in life & health reinsurance |
and lower interest rates, partially compensated for by FX |
1 Parallel shift until last liquid point, extrapolation to unchanged UFR. 2 Based on EOF stress in 200-year event. | Munich Re - Equity story | April 2024 | 9 |
Equity story
EPS growth
Core P-C reinsurance
01
Prolonged cycle supports profitable business growth
Global Specialty Insurance (GSI)
02
Powerful player in less cyclical specialty insurance
Life & health reinsurance
03
Strong earnings trajectory beyond expectations
ERGO
04
Less cyclical and less volatile business segments are expected to deliver higher earnings contribution
to Munich Re Group's result by 2025
Achieving targets with impressive consistency
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Disclaimer
Munich Re Group - Münchener Rück AG published this content on 28 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 April 2024 14:24:02 UTC.
