Full Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Andrew Baker - Goldman Sachs - Analyst : Great, thank you for taking my questions. The first one is just on the EUR20 DPS. Just curious on sort of your thinking and how you arrived at this number. I know you mentioned last year, sort of you were thinking around the 4% dividend yield level. Just wondering if that sort of was that 4% was in your thinking this year and how you arrived at that DPS number. And then secondly, just on the EUR6 billion net income target for 2025, clearly given the wildfires Q1 losses are going to come in above budget but you maintain the target. So just curious what gives you confidence here? Is it simply that you expect large losses to normalize across the year or is it conservatism in the original plan, or is there been a sort of fundamental change in your view in any parts of your business since you set the plan? Thank you. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board Andrew, good morning, Christoph. I start with the second question. No fundamental change in the way we look at our plan. As we always have a significant budget for large losses reserved in our planning anyway, and the wildfire losses are not at all sizable enough that we would already that early in the year think that our budget would not be sufficient. So therefore it remains to be seen. The year is still young. But this is just one event into a long year, so nothing has to be changed at all. And, the dividend -- well, I mean the considerations are the same, like more or less every year. First of all, we think about what is the sustainable level of dividend where we are 100% certain that we will never ever have to reduce it anymore given the history of more than 50 years where we never reduced the dividend. And this has to be very much the starting point on top of the obvious comment that we want to have our shareholders participating in our success and our increased earnings. So therefore, the overall amount became very obvious. I mean the payout ratio of 82%, I think it is a very high number, but then the split, how much do we allocate on dividend and how much on a buyback is really the question about sustainability of the result. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 10:00AM, MUVGn.DE - Full Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call And if you look at the dividend of EUR20 per share, that's roughly the amount that we think that our most stable business models will be easily in a position to finance that dividend also going forward. So this is a dividend volume which is independent of P&C reinsurance and the result of P&C reinsurance, and even more, it feels very sustainable and the right amount to announce today.

Question: Kamran Hossain - JPMorgan - Analyst : Hi, yeah, a couple of questions for me, just interested in, I guess, on the capital return, looking at HGB numbers and obviously we looked at this a lot over the years, you've got a huge amount of headroom, you've given back kind of about 50% of it, adjusting for the earnings this year. What stopped you getting more aggressive? Because I understand what you're saying about the cycle, you understand what you're saying it's an attractive, prices are down, you reduce your volume, which to me is maybe a (inaudible) So what stops you doing kind of more on that side? And I guess going forward, do you think at some stage you will say, okay, the cycle's not as good as it should be, margins are going down, etc. We will get a little bit more aggressive. Obviously the EUR20. Dividends they kind of welcomed. The second question is just on, P&C reperformance in 2024. Obviously we can see how GSI did and it was a little bit worse than target. How did P&C (inaudible) in 2024 versus the [79] that you're aiming for? I assume it must have been a little bit stronger, than the 79, so that you can still hit the numbers. Thank you. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board Good. Kamran, good morning. I start with the capital repatriation and the question was what stopped us. Well, basically, I think two elements. The first one is obviously what we would do in the area of capital repatriation is always meant to be sustainable. So you should never expect from us peak repatriations in one year and then a reduction in the year thereafter. So the question of sustainability also going forward was a key driver in our discussions, but then the second element also was that we wanted to keep the optionality, the strategic optionality to grow in whatever way we would like to grow or to develop the group also in whatever way we would like to develop the group further and this could be M&A as well and as mentioned. And then of course I mean the year just started -- you can never rule out. Bad years can happen over time. So having some buffers obviously feels to be the right thing anyway. So a combination of those thoughts, we increased the payout, as you know by 33%. I think that's a very significant step up and just reconfirm our dedication to really have our shareholders participating to a large extent and early on, but in a sustainable way in our earnings. P&C reinsurance the performance, we are not giving any detailed numbers on the split between GSI and reinsurance today. So I can only qualitatively but confirm that reinsurance had a good year. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 10:00AM, MUVGn.DE - Full Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call

Question: James Shuck - Citi - Analyst : Hi, thanks very much and good morning. My question to begin with is really around the excess capital position. So you know you've addressed the flow of the capital to a large extent. I hear what you've just said about wanting to keep strategic optionality, but when I think about the upcoming CMD and your ability to, I suppose, compound earnings growth over the medium term. Do you see yourselves able to kind of grow at the mid-single digit kind of EPS level without dipping into that stock of excess? I guess what I'm trying to get at is to what extent will the upcoming plan allow for deployment of that excess? Do you actually need to deploy it in order to be able to grow kind of single digit kind of levels even through a soft cycle? That's my first question. Secondly, I'd just like some comments around the potential impact from both Paris and reinsurance trade surplus. So by tariffs I kind of mean, to what extent you've reflected that uncertainty in your pricing, particularly at (inaudible) and by reinsurance trade surplus I mean the extent to which President Trump. Could potentially look at the extent of reinsurers buying from outside of the US. Thank you. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board Okay, James, good morning. So I think on the first question I can be really very brief because indeed there is a capital market day coming up at the end of the year where we will obviously speak about capital management strategy going forward also on a more long term in a more long term perspective and -- so nothing I think I could mention already today, but absolutely it will be on the agenda and it needs to be on the agenda and we will have a conversation then in December. On the second question, could you maybe just briefly repeat because we had some issues here with the sound.

Question: Will Hardcastle - UBS - Analyst : Hey, thanks for taking the questions. The first one is, I guess, linked to the $500 million or so new business conservatism, understanding if there's a split that between lost component versus underlying, and in what lines have you booked these in specifically and can you explain why you took this step, despite seemingly very high reserved cushions already other than perhaps a little bit of management here. And when you consider that you've delivered a full year 82% underlying delivery. Is it really closer to 80%, if we assume this isn't a new methodology change? And the second question is linked with, the capital distribution as well, and I'm sorry to challenge you on this when you've just distributed a hell of a lot more year on year, but that solvency target to 287% significantly above. I'm trying to understand really, under what time frame that you're thinking about this, you've been over it for a long time now, under a distribution basis, and I recognize there can be an organic, what macro assumptions, or is it post event scenarios that you consider that they would take you to closer to the target range. Thank you. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board Yeah, well, thank you. The reserve strengthening is -- a reserve strengthening, so no loss component affected or no other items in the P&L, balance sheet. So we really strengthen the reserves and we did it so kind of an overarching IR reserve strengthening, and let's put it that way. I don't want to be specific in a way that it would affect certain lines of business more than others. I don't think that level of detail, what would help us here in the call because in a way it's not really relevant given the fact that if you have excess reserves, of course you can also move them around a bit in case the risk situation would change. So therefore except for a moment that we increased the potency of our reserves. Why did we do it? Well, our strategy is to keep the balance sheet as safe as possible in times when we can afford it, just to be prepared that in times when we need it we can really make use of it. And what does making use of it mean? Well, it's meant to dampen volatility. We'll never use it to subsidize unprofitable business because that's really not what we should be doing, but because for that we have pricing and we underwriting and we'll conduct our business in a profitable way. But we could be affected by volatility, and it did happen a lot in the past already and nowadays our business footprint is much more stable given the increased weight of less volatile lines, but still there could be volatility. We cannot rule it out. And it just feels good to be prepared for volatility by having the serving policy which brings us to the upper end of what the reasonable best estimate could be. And this is what we do, by the way, our book is also growing, so in relative terms the potency obviously needs to already be increased in order to maintain the relative potency, given that our book is significantly bigger this year now compared to a couple of years ago. So this also has to be kept in mind, not always only the absolute amount of prudency is relevant, but sometimes we're also looking at it in relative terms. In any case, we strengthen it significantly and it feels very comfortable when we feel very good about it. Solvency 287%, as mentioned before, it's clearly what we have in mind is also strategic optionality when we look at that number, what we do have in mind is that certain shock events could reduce the number. And on one of the slides you could see that an Atlantic hurricane event, a (inaudible) event would bring it down quite a bit. You know that we will have to deduct from that number the share buyback in Q1 anyway, so (inaudible) so that there is -- I mean there's reasons to believe for it will come down, but the most important element, how it will come down is obviously our repatriation strategy which is meant to sustainably reduce it but in a sustainable way without peaking in one year and reducing the payout in another year, but really sustainably increasing year on year. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 10:00AM, MUVGn.DE - Full Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call And then we'll get there and it will take some time, obviously given where we are, but on the other hand, I think this company and all its shareholders benefit from the really big and safe balance sheet we're having given our business model and again given the potential volatility which we shouldn't forget.

Question: Iain Pearce - BNP Paribas Exane - Analyst : Hi, morning, everyone. Thanks for taking my questions. The first one is just on the GSI growth outlook. You're guiding to some pretty strong growth in in GSI for next year. I was just wondering if you could give a bit more detail on sort of the split between, the different segments within GSI and particularly the split between rate and volume. I assume most of that's coming from volume so just why you feel confident about the volume growth you're anticipating there. And the second one is just on the renewals. Obviously shrinking the business outside of everything, outside of the proportional motor. I'm just wondering if you could talk about is this reflective of a of a lack of growth opportunity in some of those other lines where you would definitely say that rates are still above an adequate level. So if you just talk about the growth opportunity and does this also mean That we should not expect any growth in P&C reinsurance revenues this year when we think about the guidance of 5% growth combined with the GSI growth and life and Life & Health regrowth in insurance revenues we should expect. Thank you. Joachim Wenning - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chairman of the Management Board, Chief Executive Officer Thanks, Iain. This is Joachim. Thanks for asking questions that can be allocated to me, by the way. So one thing with regard to GSI growth outlook, I think -- if we think a couple of years ahead, we're not yet there defining ambition 2025 plus, but I think Taking into account that GSI has grown in the past four years by more than 10% every year. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 10:00AM, MUVGn.DE - Full Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call The question is, will they grow by another more than 10% going forward? Will it be slightly slower? On the cautious side, I would say we firmly believe it will be somewhere between 5% to 10%. So this is not an accurate estimate. It's just a statement that Maybe slightly slower than the organic growth that we have seen in the past four years. Which of the business legs will be outstanding with the single highest growth expectation for the time being? I would still expect this to be the Munich Re specialty business in North America. With regard to the renewal outcome in traditional P&C reinsurance, is there a lack of growth opportunities? No, there isn't, but let me specify this a little bit because it's right that volumes have come down 2.4% in the [1,1] renewal. And of course we have looked into the volumes that we have not renewed. And here's the analysis. So the volume decreases this they are related to a relatively small number of very large treaties or very high volume transactions, and here we considered the returns as unsatisfying, hence we didn't renew. But beyond this, we would have seen a flattish volume development. And this very nicely corresponds to the rate experience that we have had, which is a flattish, pretty flattish rate development, and then you see a pretty flattish volume reaction. This makes total sense to us. I could say, have you shown premium increases on 1,1 of 2%, 3%, 5%, 10%. You could have rightly challenged our cycle management rigor. How's the outlook for the remaining renewals in this year? Honestly, it would be speculative. We don't know, so for the time being, I think the best assumption is the one renewal has set the tone, and then we're going to see if there are any more, I would say short term impacts upwards or downwards for 14, 16 or 17. Thanks. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board All right, thank you.

Question: Ivan Bokhmat - Barclays - Analyst : Good morning. Thank you very much. My first question would be on GSI. It's -- slides mentioned that you, you're trying to limit exposure to weather losses through underwriting actions. Maybe you could expand a little bit on that. I mean, how exactly would you be reducing volatility? And also, with that perhaps might be interesting, of how the GSI portfolio, you think is performing year-to-date, especially through the wildfires. And the second question is also on P&C, it's actually on aviation, and probably a two part, one. One, we are starting to see some acceleration of settlements related to Russia and Ukraine. Maybe you could remind us how large are the reserves that you're still. And what the developments have been recently. And secondly, there's been also quite a lot of activity unfortunately in the hull and viability in Q1. So maybe you can comment anything on how you guys are trading through that. Thanks. Joachim Wenning - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chairman of the Management Board, Chief Executive Officer Thank you, Ivan. Let me take the first question, and Christoph will take the aviation one. So reducing the weather risk related exposure, how does it mean? It means that the business is exposed to those weather risks, that they are mapping their risks, I would say, more granularly at a micro REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 10:00AM, MUVGn.DE - Full Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call level. Making sure that they don't concentrate or accumulate in certain regions because that logically then would increase their exposure to one single weather related event. The other one is looking at harmonizing or homogenizing the limits that are out there, so avoiding any peak exposures. By limiting it, by sub-limiting it, it's simply by mapping more granularly what is sitting in the portfolio. Christoph? Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board On aviation, no big news in our view. The reserve level we have is a mid-triple digit number for the entire complex Russia, Ukraine. Not all of that is aviation, but obviously a significant part of that is aviation. We are still comfortable with our legal position and await the things how they will happen.

Question: Darius Satkauskas - Keefe, Bruyette & Woods Limited - Analyst : Hi, thank you for taking my questions. Apologies for coming back to the capital return. So, I'm just curious, do you have some sort of theoretical limit in your mind of the sort of total payout ratio, you would not want to cross in the medium term? I mean, is 90% feasible for instance, or is the low 80s the new norm? So that's the first question. And the second question, what sort of insured industry loss did you base your [EUR1.2 billion], California wildfires, estimate on, and do you think this event could lead to some sort of rising premium rates, in the higher layer cap or not? Thank you. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board I'll take the first one. Well, capital return, that's a bit of theoretical question what kind of payout ratio we think is possible. And as mentioned before, we'll speak about that in more detail in the capital market days. But what I can share with you is the way how we would look at it methodologically. So as you know, I talked about sustainably increasing the payout. So what we would do is for a new multi-year strategy, be three years, be it five years, whatever the number will be, we will look into our projection of the P&L and the capital over these five years. And if we then see that 80% is feasible, then why not 80%. But if a lower or even higher number would be possible, why not? So I don't see any theoretical limitation. But the sustainability of what we will be doing, this is absolutely key and for that we need multi-year projections supporting us in our belief that it will be possible to maintain something like that for a longer period of time. Joachim Wenning - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chairman of the Management Board, Chief Executive Officer And Darius with regard to what market loss scenario we have based our 1.2 billion wildfire estimate on is more built on analyzing our portfolio. Of what we have actually insured and how we consider this being exposed to losses than any of these various market loss estimates which practically vary between I don't know [32]. Was it up to [50 billion] or [45 billion] that matter is loss. So, it's more based on our own portfolio analysis. What rate impact might this wildfire loss have going forward? It will certainly have an impact, of course, on ensuring wildfires going forward, that's for sure. But beyond wildfire, I think it REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 10:00AM, MUVGn.DE - Full Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call would be highly speculative. You read voices that they say it should not have any impact. You see others that said it should have an impact, but this is all interest driven. Nobody knows we're going to see it.

Question: Shanti Kang - Bank of America - Analyst : Hi, good morning. Thank you for taking my questions, and congratulations on an impressive for your results update today. So I just noticed on, slide 72, the Atlantic hurricane aggregate, value at risk, component has risen year on year. And one of the reasons you cite is due to model assumption changes. So I was just curious if you can share what the assumption changes were and why this led to a marked increase in exposure. And then just on the second question was on, the new specialty lines businesses. Just curious to know how, these, the growth of these lines will impact your SCR going forward and if there's any particular lines that have a greater capital strain that we should be mindful of. That's all. Thank you. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board So thank you, Shanti. First one, Atlantic hurricane, a lot is FXs driven, as you do write a lot of obviously in US dollar and US dollar strengthen so much. What else is in there is just the regular portfolio update and obviously a model update wherever we updated the model given either model updates or assumptions updates in the course of our modeling. The specialty insurance on our [STI], the effect will be very neutral. I mean we do have a lot of that already. We have broadly diversified, very well diversified anyway, so I would expect any growth impact to be well absorbed by the diversification.

Question: Faizan Lakhani - HSBC - Analyst : Hi there. Once again, congratulations on a very strong set of results. I wanted to come back to the net income guidance 2025. I know you mentioned that there's a long way to go in the year, but assuming we get an in-line net cap loss for the rest of the three quarters, what tools do you have to offset some of that potential higher large loss burden? Could you potentially use the 500 million prudence that you put away at the end of this year? And the second question is on the GSI business. The combined ratio is running above the 90% in 2024, and you highlighted a few drivers of that. I just want to understand if you had a normal large loss burden and potentially no prudence added for casualty, what would the underlying combined ratio be? And could you also elaborate on what the underwriting actions taken in American modern would mean for the combined ratio? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 10:00AM, MUVGn.DE - Full Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board Okay, the first one on the guidance, I mean, the question you ask is a very theoretic one because what you're asking is that everything else would be 100% according to plan and only one single item, one single event would be deviating from the plan. I mean that's obviously never ever going to happen like that. So in reality, every single item we have is developing differently than how we planned it. And then the combination of all these smaller or bigger differences and also due to the fact that we are well diversified will lead to the fact that we are going to make the plan. I'm 100% convinced that this is going to be the case. What I cannot tell you is where the outperformance will come from in your theoretical scenario, but it will happen. I'm 100% certain about that. And this is the reason why I don't have to think about individual items like our reserve releases. It might happen elsewhere, maybe in the investment result, maybe in life as we, maybe ERGO, who knows, we'll see and we'll see together. More seriously, obviously having buffers in the reserves is meant to dampen volatility to some extent. But all you have to be careful because we have those buffers obviously not without any reason, so they are all allocated to certain perils and certain risks, so you can just take them out as you go to your draw and then take something out. It's a bit more complicated than that. But again, I don't think we're going to need that in any case. Like, can you remind me of the second question? (multiple speakers) So without buoyancy and more normal large losses, obviously we would be significantly closer to where our target is for this year. We still left ourselves some room for operational improvements. Targets need to be ambitious, but it would be significantly closer to the 90%. Thank you.

Question: Henry Heathfield - Morningstar - Analyst : Oh, good morning. Thank you for taking my question and also congrats on the results. Just one for me, if I could, just, if I could just ask a little bit on the result from insurance related financial instruments and the Life & Health reinsurance. Significant bump up year on year. Could you kind of just talk a little bit about what it is, what's driving it higher, and the FX impact. Thank you. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board Yeah, absolutely. I think that the dominating driver is really FX and we book FX in that line of business that we're going to change the accounting treatment going forward, but so far FXs booked in that line of business, which resulted in quite a bit of volatility also in the past this year it's in our favor, but ethics more generally spoken in our P&L is a bit of a volatile item. I mentioned earlier today that we benefited a bit from it now in the fourth quarter and so please all have in mind that it could also go the other way. Ethics is a bit volatile.

Question: Henry Heathfield - Morningstar - Analyst : Thank you very much.

Question: Chris Hartwell - Autonomous Research - Analyst : Good morning. A couple of just quick questions. I wanted to go back to the renewals experience. I guess it's difficult to sort of marry the comments you make on industry profitability with the sort of lack of new business growth and of course the very strong capital position that you're starting from. So I was wondering what. You know what if you could just give a little bit more color on what philosophy is there, but also I think importantly, I mean it's a good signal to the market, but is the rest of the market following your discipline, given the margin available? And secondly, just on motor, I see, I think on the ergo P&C side, the motor share has grown. And also motor stands out, within the reinsurance renewal. So I was wondering if you could, sort of update some of your thoughts on what you're seeing, and the trends and, sort of pricing broadly across, motor and in particular Germany. Thank you. Joachim Wenning - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chairman of the Management Board, Chief Executive Officer Thank you, Chris. This is Joachim. So on the P&C side, what is our philosophy? First of all, it is all based on technical assessment of the risks on technical pricing of the risks, and whatever conclusion then we draw technically translates into how we behave commercially. We have seen the market in 2023 and 2024 very disciplined, at least as we would describe it from our perspective, disciplined meaning employing capital into markets that made sense, charging risk premiums that at least seem making sense to us. So this is what we call a disciplined market. Do we have any evidence, not gossip, but any evidence that the market in 1,1 renewal has become undisciplined? No, I wouldn't go that far, but based on what we have heard, some of our peers reporting from their 1,1 renewals, we have heard that they not totally coincide with their rate experience and with regard to their actual growth that they show. So from there you have to make your own conclusions. Whether we walk our talk of being rigorous, even if it comes at letting some volume go away the best or not, this is our philosophy and where we cannot technically renew something meaningfully, we reduce it, we bind then and employ less risk capital because we would give up business, this would increase our excess capital and increase the new challenges to Christoph Jurecka with regard to how he's going to return all this, but we will not stay in the market employing risk capital desperately because we're sitting on excess. The motor business is standing out a little bit. It's not a phenomenon of original rate increases and sufficient original rate increases and growth across all geographies. So one geography that you mentioned more to Germany. I would explicitly take out of that equation, but we have seen single other markets where our motor exposure is more material where the original rate development is very healthy. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 10:00AM, MUVGn.DE - Full Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call

Question: Vinit Malhotra - Mediobanca - Analyst : Yes, good morning. So my two questions. First is on the large losses. The man-made was very high and apologies if you commented already, but is there anything you can add further to that? Is it somewhat linked to GSI, or anything else you can add, but also the nat cat, you mentioned (inaudible) releases already. If you could just provide any more color, in the same line, I would even sneak in one more that even in the life we've heard about these large claims, are they a worrying sign for and if I may allow second question on renewal, it's more a theoretical one, let's say (inaudible) the commentary about, maintain terms and conditions, so I noted that you've mentioned wording and such things, but isn't it also true that we are hearing from a lot of people and press releases, presentations that attachment points have been slipping a bit. How concerned are you about the attachment points? Are they much more important or in your view, they're one of many factors that drive P&C stability. I'm just curious to hear some thoughts on that. Thank you. Joachim Wenning - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chairman of the Management Board, Chief Executive Officer Thanks Vinit for your questions. This is again Joachim. So on the life insurance side, large losses there is no large loss development that is raising any [eyebrows]. It's slightly going up, slightly going down. It's all within expected ranges. You ask for the large loss exposure if I understood you correctly, with regard to GSI being exposed to this wildfire loss, it's a small chunk of the big number, the EUR1.2 billion. So GSI is carrying the far smallest part of that. And with regard to terms and conditions and attachment points, particularly, you mentioned that some in the market have been saying that it has been slipping. I cannot confirm that from our end.

Question: Vinit Malhotra - Mediobanca - Analyst : No, I mean -- Joachim Wenning - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chairman of the Management Board, Chief Executive Officer Are the large losses on P&C? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 10:00AM, MUVGn.DE - Full Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call

Question: Vinit Malhotra - Mediobanca - Analyst : (inaudible)

Question: Michael Huttner - Berenberg - Analyst : Thank you so much, and I joined all the others saying fantastic results. I had two questions. One's a very cheeky one. And the other one's just numbers. On the cheeky one, when you split GSI from P&C, are the two busses going to fight over the excess reserves? How are you going to deal with that? That was actually a big problem (inaudible) for many years, but in your case it makes no difference. And then the other more numbers question Joachim you very kindly said that the dividends covered by ERGO and (inaudible) I just wonder if you could also give us, and I know it's a little bit premature, but it would help so much, an indication of how much GSI kind of helps diversify P&C or profit. I mean just to give you a number, I was trying to work it out very roughly. I'm getting that GSI is about, I don't know. Operating profit somewhere between EUR700 million and (inaudible) billion out of the EUR4.7 billion P&C, but I don't know. Thank you. Joachim Wenning - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chairman of the Management Board, Chief Executive Officer So thank you very much for your question. I start with the second one, Christoph, if you can prepare for the first question. I mean, just add it up, ERGO take [0.9 billion] expected as a result for 2025, then end up, and I'm rounding now add up another [0.5 billion]. This is really net bottom line for GSI. I'm running the number again. The Life & Health reinsurance technical result, not net income, is supposed to end up [1.7 billion]. So how much of that will be net income if you add up these numbers, then you get to, I would say, the full potential of the less cyclical, non-volatile businesses. GSI over time is supposed to become, yes, an increasingly relevant third bit of stabilizing volatile P&C insurance results. Thank you. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board I take the first one and I understood that the question was how is the prudency in our reserves distributed between P&C reinsurance and between GSI. And I think that the answer is pretty straightforward. The opportunities to book conservatively are significantly higher in reinsurance as you have more long tail business, higher uncertainties. So therefore, also the possible range of this estimates is significantly higher in reinsurance than in primary insurance. That's something we see today already when we compare our reserving position. And with reinsurer is also very conservatively reserved, but still the amount of buffers in absolute terms is smaller because the uncertainties are also significantly smaller. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 10:00AM, MUVGn.DE - Full Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call So having said that, you should expect that a major part of our reserve prudency will sit in the reinsurance business also going forward. While the amount of excess reserves or potency reserves in GSI will be comparatively smaller. Having said that, it will be probably similar like what we do in ERGO. So a typical approach for a primary insurance business, whereas for reinsurance you have just other means how to run that.

Question: Roland Pfaender - Oddo BHF - Analyst : Yes, good morning. Thank you for taking my question. I would like to come back to Life & Health reinsurance and the growth outlook there for new business. What are your expectations regarding mortality and longevity, FinMoRe business, which are these pillars promise the best growth expectations. Thank you. Joachim Wenning - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chairman of the Management Board, Chief Executive Officer I think Roland, the best assumption going forward for life free and growth is that with regard to the bread and butter businesses and that is mortality business, that is living benefits businesses, if you just assume sort of a mid-single digit growth growing with the underlying regional markets, I think that would be a fair assumption, at least that's ours. On the longevity space, we have seen growth in the past years slightly above that level, mainly in the UK market, we have started with first steps expanding this line of business into non-UK market step by step, cautiously, so I would say longevity could be potentially growing more than the bread and butter business, but what for the time being is supposed to grow the most is what we call the very large transactions. They're mainly sitting in North America and they're really primarily in the US market. At some point they might spread into select Asian markets which we haven't yet seen, but that is the single largest thing, and these are block deals where incumbent direct insurers really outsource if you like, and see the way huge blocks of their biometric book where the asset management of the related asset is done by asset managers, third party asset managers, and where the biometric risks related to those blocks are ceded to reinsurance. And here we have, we are sitting in a (inaudible) position.

Question: James Shuck - Citi - Analyst : Oh thanks for the opportunity. On your target solvency range, can I just clarify my understanding? 175 to 220 is the optimal range. Will you actually run your business at any point in that range? I think the question came from earlier in terms of should we look at that as a post-stress kind of level, REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 10:00AM, MUVGn.DE - Full Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call so i.e., you'll be above it, but then you look at what your exposures are and you think, kind of, okay, post-tress, that's the kind of level that you want to be at. So you'll be consistently above that over any sensible time frame. That's my first question. And the second question again just on GSI. So the 90% combined ratio target for '25, but that hasn't actually changed from the previous guidance that you gave, and yet there is wildfire losses to come in that. I know you said that it's a relatively small part of the [1.2], but it will be a contributing factor. What is the clean number kind of ex wildfires if you like, and just trying to get a feel for the sustainable combined ratio target at GSI at this point. Thank you. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board James, the targets of the two ratio is meant as the targets of the two ratios, so we wouldn't be concerned at all if the number would be in that range. And it was historically not so long ago that we were in that range, so therefore, no problem with that. It's calibrated in the way that even if you were in that range, you would still be able to absorb the shock and continue to run the business as we do. So therefore I can only repeat it's a target range and the intention is not to long term stay above the target, but obviously for a shorter period of time, a few years, no problem, we can also stay above that. And sometimes, it feels quite good to be above it as well, given again strategic options or also large events or geopolitical uncertainties or whatever you look at. The GSI 90% target is the target for the full year. After the first couple of months now, I have nothing really to add to that. It's still early days and a lot of opportunities and all the risks obviously for GSI, but I'm pretty sure they'll make it. So nothing else to be mentioned here.

Question: Faizan Lakhani - HSBC - Analyst : Hi there, thank you for taking my follow-up questions. One is coming back to the normalized combined ratio for Q4. I mean, you're very clear that 82% is the right starting point, but just trying to tie that back to your comments, earlier on in the year where you had the potential headwind for motor proportional that just can't be seen once you adjust the 500 million prudence. And we just want to understand, is there any sort of volatile items in Q4 that we should sort of factor in, and I guess in part. The growth in motor proportional at January renewals, will that have an impact on the combined ratio. And secondly, one is sort of a clarification on slide 45 and 46 where you give the commentary around the runoff. It appears that all years are developing favorably, but then you have the negative runoff in the accidents in year 2023. Do we just square that up with prudence, if you could just explain that? Thank you. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board The second question first, that's a usual pattern we always have indeed this is potency, which usually in the first development year it hits us a bit, and the same this year as well. So yeah, potency is the right answer. On the normalized comment ratio and volatility, I just, I think we have to keep in mind the threshold for large losses is [30 million] in the meantime. So even in the basic losses, there is room for volatility. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 10:00AM, MUVGn.DE - Full Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call So it just makes a difference if you have a fuel claims worth [25 million] or not, and they would not even show up in the normalization and not even be visible in the 30 million threshold. I'm not aware of any specific event which would have increased the volatility, but it's more normal nowadays with these 30 million threshold that the single quarters also in the basic losses, they are a bit moving up and down more or less all the time. If you remember the first half of the year, I think particularly Q1 but also Q2, for example, quite good quarters when it comes to the basic losses. So it's not uncommon. We have that sometimes. On top of that there is of course this overlay of business mix effects you were also referring to, and this comes on top and sometimes it's more the business mixed effect you're seeing sometimes it's more the quarterly volatility, but I just want to make sure that we are all on the same page that from a quarter to another, given the size of our book but also given the threshold for large losses which is 30 million, there is some volatility always possible. It's not like that the basic losses are running without any ups and downs from one quarter to the other that shouldn't be expected. By the way, also an interest rate component. So we obviously we do have all these elements from discounting from those components. So it's probably fair to say that the basic losses are less stable now than they would they would have been in the past on the (inaudible)

Question: Michael Huttner - Berenberg - Analyst : I'm very lucky. Thank you so much. I've got two. One is kind of (inaudible) on you. I'm not sure whether you mentioned the room to change leverage. I'm sure you'll discuss that on the December 10, but any kind of thinking on that would be super interesting. And then the second, I think you mentioned many times the strategic optionality, and I'm just wondering whether you can give us a feel for is there anything in the pipeline or what you're thinking of or how big could it be any hints could be gratefully received. Thank you. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board Yeah, Michael, thank you for the question. I mean, the short answer for both questions would be nothing changed. A bit more a bit more elaborate. Obviously our leverage ratio is still very low in the industry comparison. We don't want it to be in the middle of where the others are, but over time, which means multiyear approaching the pack from the lower end, getting a bit closer to where the others are still seems to make sense. Sometimes it's a bit hard to get there once you're so profitable. But we're getting there. It just takes time. The other point, I forgot (inaudible) strategic optionality, as always, we were interested to grow our business, particularly in lines which would help us to even more stabilize our footprint. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 26, 2025 / 10:00AM, MUVGn.DE - Full Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call In that regard, we are open to options once they come up and would look into whatever target is presented to us. And if then the strategic fit, but also the financial details are attractive enough, then we would go into a transaction. Obviously it didn't happen so often, but still, I mean this is unchanged and this is how we look at it.