Half 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: Tryfonas Spyrou - Berenberg Capital Markets LLC - Analyst : Hi. Hello there. And well done on a really strong first half. I guess, first question on capital returns. I appreciate maybe a little bit too early for this. But with the solvency level, at the level it is and the ratio of earnings momentum year to date, I was wondering how should we be thinking about the scope for capital returns for this year, and whether the 75% pair ratio over the last couple of years is a good starting point to have in mind, even on a much higher earnings base. The second one is on GSI. I guess, you highlighted once again, this is becoming a key driver of the group in (inaudible). I was wondering if you can share some additional thoughts on the performance of these units here today in terms of premium growth and underwriting profitability. And I appreciate you don't have (inaudible) numbers. But any rapid indication on what would be the contribution of GSI to the overall P&C re-operating result? Thank you. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board Well, Tryf, good morning. Capital return, I don't think there's so much news today. I mean, our commitment is very clear that with higher earnings, also higher repatriation. It is absolutely not only necessary but also something we are really willing to commit to. But as always, we await year-end until we'll finally make decisions on how much capital really is going to be repatriated and in which way. But as you can see at our earnings level, we have probably doubled the size of our company five years ago. And very obviously then if it continues like that, then also the repatriation numbers necessarily will have to go up. But for everything else, I think our commitment is very clear. For everything else, I can only refer to the year-end. And then our decisions, finally, will be taken in the first quarter next 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. AUGUST 08, 2024 / 9:00AM, MUVGn.DE - Half Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call Joachim Wenning - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chairman of the Management Board, Chief Executive Officer And this is Joachim. With regard to how pleasing the earnings growth or the earnings growth is going in specialty insurance, I can say in Q2 the earnings were not as good as in Q1. The reason simply being is everywhere else with direct writers that there was some nat cat related losses that also GSI had to absorb with regard to volume growth or premium growth. It's on target, and it's on target to what I said we think might achieve a EUR10 billion top line by end of 2025, which would mean 25% increase compared to end of 2023. If we look not quarter by quarter, but year by year, or in two years' period, three years' time period, GSI is fully on track.

Question: Will Hardcastle - UBS - Analyst : Yeah. Just first of all, just linked with the July volume reduction. Thanks for giving us the color on where that's coming through. Very helpful. I guess, on the casualty just making sure that's not a -- or just checking in really -- that's not a reaction to some adverse data that you're seeing on your side. It's just a matter of purely pricing on our new business. Is this -- were you competing for this price and it got taken off you, or was it just you chose to structurally step away from that particular business? Presumably as well, that's from an absolute profit perspective that's relatively low because that would be weaker margin business. Second of all, just coming back on the life and health re, we're seeing a bit of a track record building on experience variances. Just trying to understand how we should be thinking that on a forward basis. We see PYD coming through on a regular basis in your P&C re side of things. Is there a potential that we start thinking about that from a life and health re side, or would you very much steer clear of us doing that at this stage? Thanks. Joachim Wenning - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chairman of the Management Board, Chief Executive Officer Okay, let me -- Will, this is Joachim. So let me start with your first question. I can very firmly state that the reduction in the casualty volumes on our hand was not a reaction to anything adverse that is new. But it is just, I would say, a response to not finding enough profitable business opportunities. Or in other words, the markets could trade at terms that we consider unattractive. Life re is you, Christoph? Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board Yeah. And I think your question, specifically, was the PYD development in life re and what assumptions to put in going forward or what to believe going forward. And obviously, I cannot tell you what you should believe going forward. I can tell you what we think is adequate. Kidding aside, we saw two quarters now in a row with very positive PYD, which is really pleasing in particular, as we also saw some more difficult development in the last couple of years, especially after COVID in the US mortality space. So therefore that's very positive. But also in the past, I mean, PYD is always depending on the actual development and of the assumptions you did set in the past. And our assumptions, I think in life re, what they are, is they are cautiously conservative but clearly in our view, different from what we do in P&C. We deliberately put in a significant margin which we would then see developing over time and then coming out of the business then again years later. The approach in life re clearly is in our view, significantly closer -- much, much closer to our best estimate approach. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 9:00AM, MUVGn.DE - Half Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call And as you know, our best estimates always tend to be -- have a bit of conservativism in them, but it's significantly closer to best estimate. So therefore, I would be very careful personally projecting a positive PYD into the future. It can go either way going forward. Having said that, our assumptions tend to be a bit conservative again. And there is no concern at all on our side that the assumptions would not be adequate. That also has to be underlined.

Question: Kamran Hossain - JPMorgan - Analyst : Hi, morning. Two questions for me. The first one is just on the life and health guidance and just why maybe you haven't moved it up at this stage. I appreciate, for the group, hurricane season is a material issue if something goes wrong. But for the life and health side, I'm not sure why you wouldn't change it now. Were there any kind of good news, one-offs in that number? I think at Q1, you said everything went well. The business, was it the same again? Just interested in why you wouldn't change that piece of guidance right now. The second question is on the underlying or the normalized combined ratio. You've basically seen -- within that, you've explained that some of it's like the earning of most of business and so that it probably does provide a little bit of a drag on that number. Is the difference between the Q1 and Q2 normalized combined ratios just motor? And do you expect to get to 82 over the course of the year as more of the motor comes through? Or even taking that into account, are things still running best in expected? Just interested in kind of more color there. Thank you. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board Yeah. Thank you, Kamran. I'll take over your questions. I mean, the life and health guidance -- don't interpret too much into it. This is clearly -- I mean, for the (inaudible), we try to be consistent in our overall table of outlook numbers. And if you don't change the net income numbers, basically, you cannot change any other numbers. Because otherwise, mechanically, the net income number would also go up. And by only increasing life health -- to keep the net income stable, we would have to take down the P&C re number. But there's no indication at all that this number should be any lower. So therefore, just take it as a mechanical necessity, given the fact that we didn't want to increase the overall net income number at this stage. So no intelligence at all in it. And by the way, for the entire guidance, it's true -- what I'm now emphasizing again -- that we do not have any knowledge of any drag on our earnings in the second half of the year at this point in time. It's just the usual, Munich Re conservatism ahead of the hurricane season, that we do not increase the guidance right now. Nothing else and nothing to be interpreted into that fact. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 9:00AM, MUVGn.DE - Half Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call The second point, the underlying normalized combined ratio and the trend. Obviously, business mix is always a significant driver and also was a driver in the development between Q1 and Q2. And this is what we have been guiding towards the year-end, that we will finally be a bit closer to the 82 number. I think we commented in Q1 that we had -- a few exceptionally good developments in Q1, which are maybe also related a bit to the arbitrary fluctuations you can have one quarter to the other in your claims development. And we normalize for the large losses, but our large loss threshold is EUR30 million. So if you have a few EUR25 million losses or not, that can make a significant difference. So therefore, I would still say Q1 was also just the usual fluctuations which you can have in a book like that, probably a bit lower than what the long-term average should have been. On top of that, we have the big system exchange towards Q2. And then, finally, we end up where we are in Q2. By the way, there's also quite a difference in the discount ratio., a few of us have noticed probably. So there's also these kind of elements also playing a role in the overall transition from one quarter to the other.

Question: James Shuck - Citi - Analyst : Thank you, and good morning, everyone. My first question is on the life and health re book. Just asking if you could flesh out some of your explanation around the US mortality development. And I suppose it was actually in a little bit last year and into this year. To what extent has that been driven by kind of lapse variances versus biometric changes, please? Any insights to that would be helpful. And then secondly, just in terms of the cycle outlook, we've seen this big shift away from the lower-return periods up until kind of [through the towers] and moving away from the frequency of losses. How do you see pricing evolving in those low-return periods at this point? At what point do you see that pricing will be adequate? You can start moving back into those frequency layers because you're actually generating the returns that you would expect. Thank you. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board James, thank you. I'll take the first question. It took us a while to sort out who's going to take which questions. Sorry for the short delay. I'll take the first one. So the positive experience we are seeing goes more or less across all risks. So mortality is clearly contributing significantly. But also on the life side, nothing negative to report. It also contributes positively to the overall positive experience.

Question: James Shuck - Citi - Analyst : Okay. Thank you. Joachim Wenning - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chairman of the Management Board, Chief Executive Officer Wait, wait, wait. I'm sorry to interrupt. There was a second question from James that was on the lower layers. Maybe I can -- James, I can differentiate a little bit. There is top layers, mid-layers, and low layers. The top layers have been priced attractive, and they are partly under a little bit of more pressure these times. The mid-layers, very stable, if not positive, in their development. And the lower layers are those that the reinsurance industry or we are less engaged in or not engaged in. They fall into the retention of the direct writers. What is the outlook there? Difficult to say, but they are not attractive to be written by reinsurers at this point in time. Will the rates go up there? No, but if they should be reassured, they would need to go up.

Question: Ivan Bokhmat - Barclays - Analyst : Hi, good morning. Thank you very much. I've got -- my first question would be on the life and health earnings. I mean, firstly, maybe you could elaborate a little bit more about the CSM release. You suggested that 7% and not 8% is rather the more appropriate guidance. Is that driven by the strong new business growth? What exactly leads to lower emergence? Maybe you can also talk about the pipeline for that new business. And my second question is about GSI and the nat cat experience. Maybe within your total nat cat for the first half, could you share how much was related to the GSI losses, how much was traditional insurance? And perhaps in the light of your intention to have it as a separate division next year, could you advise how much reinsurance are you using right now? Do you intend to use more, and will that be more internal reinsurance or external? Thank you. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board Ivan, the first one, very simple answer. It's business mix driven, and the business mix is, of course, heavily impacted by the large portion of new business we have been writing in the last couple of quarters. And as an outcome from that business mix shift and the significant new business, we guide no other 7% and 8%. So no other signs behind that. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 9:00AM, MUVGn.DE - Half Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call On the GSI side, I mean, we'll start reporting details only beginning of next year. Currently, GSI does have a significant -- quite a bit of internal reinsurance and also takes out some, but very limited, external reinsurance. This is our reinsurance strategy in GSI. So in a way, they pick up some losses also in lower layers, which in reinsurance, we would not pick up. So that's part of the large loss development also in the first half-year. So there are our two -- let's say, P&C reinsurance segments behave a bit differently.

Question: Ivan Bokhmat - Barclays - Analyst : Thank you.

Question: Ismael Dabo - Morgan Stanley & Co. International Plc - Analyst : Hi, good morning, and congrats on a good quarter. I believe last quarter, you mentioned that you could possibly realize bottom losses if the net result gets exceedingly high. Well, I guess the question is, number one, what would you consider exceedingly high, given you're well above your run rate? And my second question is on the July renewals. Obviously, you reduced your casualty proportion of portfolio significantly, while you increase the casualty XL notably. So I was just wondering if you could talk about the dynamics between the two types of treaties and also maybe even discuss a little bit more around casualty (inaudible), given that we've seen some US insurers report some adverse trends in more recent acts in the years, not the traditional [vintage years] of 15, 16. Thank you. Joachim Wenning - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chairman of the Management Board, Chief Executive Officer Ismael, thank you. Let me start with question one, and please be prepared. We didn't understand your question one, which you could then repeat. Let me start with response two. So the July renewals, what should you read into casualty non-proportional, and what can you read into casualty proportional? The casualty non-proportional benefited from original rate increases that were very material in [17]. So we grew through this, but we didn't actually write new business on casualty non-proportional basis. And the casualty proportional is one where we simply, in quite a number of cases, we didn't consider the proportional rate increases as sufficient, and we stepped out of that. If you would be so kind to just repeat your question one, please. Sorry that we didn't get 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. AUGUST 08, 2024 / 9:00AM, MUVGn.DE - Half Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call

Question: Ismael Dabo - Morgan Stanley & Co. International Plc - Analyst : Great. Thank you.

Question: Vinit Malhotra - Mediobanca - Analyst : Yes, good morning. Yes, so my two questions. So first one is, Joachim, just picking up on your commentary that in July renewals, the terms and conditions were defended very well. And I think that's also very important, not just the pricing. So when you said the market could moderate, will you -- and obviously, you have a strategy around it. But in that moderation comment, would you say that the terms and conditions could help margin be defended better? So just curious on this comment around terms and conditions and the margin impact this could have as we see a slight reduction in pricing. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 9:00AM, MUVGn.DE - Half Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call So that's the first question, please. Second question is just on the life and health insurance. So this very, very high technical result. I'm just trying to get a sense of the big picture down as in -- is this super strong because there is some -- one of which demands in the market either because of competitive reasons or because of some other factors? Or is it because mortality is so good because you mentioned experience variances are pretty positive in mortality as well? Is it because that post-COVID mortality has been very low? I'm just looking for some (inaudible) rationale for this very high level, also with the motivation to understand how to think of the future. But yeah, at the moment, even if you comment, please, on what's driving this strong level. I know there's FX and other things, but just any top-down drivers, please. Thank you. Joachim Wenning - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chairman of the Management Board, Chief Executive Officer Thank you, Vinit. This is Joachim. Good morning. So with regard to your question [17] renewal terms and conditions. In hardening market environments, it's not only rates going up typically. It's also that terms and conditions are being modified, all of them with the intention of creating a better interest alignment between the cedent company and the reinsurer. I mean, in the end, it's all about having aligned interest. And this, the reinsurance industry has achieved in the last years. And even going forward, we should not only look at rates, but we should also look at what is the quality of the terms and conditions that we apply the rates to. And my comment just meant we, on a risk adjusted basis, in [17], we could increase rates by 0.6% without jeopardizing or not at the expense of weaker terms and conditions, but at terms and conditions that were as stable as the year before. That was meant to be said. In life reinsurance, the question that you ask is, where actually is the market growth coming from? Fundamentally, if you look into our book, both the in-force but also the new business, there is -- the bread and butter business that you're aware of, and there is what we call the financially motivated reinsurance business. It is more or less standardized capital relief transactions. It is financing the new business volumes of our clients or financing the embedded values of our clients. This is not new. What is triggering and fueling the recent growth and very materially, is huge blocks that get traded to improve the financials, mostly the ROEs of cedent companies. And often asset managers are involved in that to take care of the related investments of those blocks, and they would then cede all the biometric risk to a reinsurer. And we as a large reinsurer, we are, of course, able to take it all when we like it. So when such a huge block transaction materializes and we are the reinsurance counterparty, then it's a massive new business volume that we are writing. This is the windows of opportunity that we are seeing now for some time. It will remain for some time. How sustainable that is into 5 or 10 years to come, nobody knows.

Question: Vinit Malhotra - Mediobanca - Analyst : Thank you very much.

Question: Faizan Lakhani - HSBC - Analyst : Hi, thank you for taking my question. The first one is coming back to the combined ratio mix. You've reduced your casualty quota share, which it seems is lower margin, and you're pivoting towards excess loss. What does that do to your underlying combined ratio in 2025? And I guess, linked to that as well, you're growing your specialty business very strongly. Cross-cycle, it's a low volatility business by CMA has a higher combined ratio. What would that mean for your sort of blended combined ratio going forward on that as well? And my next question comes back to your special problem that you mentioned. With yields potentially falling and given the fact your reinsurance book has quite a short duration, does that leave you a great deal of room to realize further fixed income losses by year-end? Or do you still believe you have significant room, though? Thank you. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board Faizan, we again had a bit of debate who is going to take the questions. I'll take both of them in this case. The combined ratio, I think I commented already. I think we had a very good Q1. Q2 was also still below our targeted profitability, despite some effect already also from business mix. Motor proportional was mentioned in that regard. And towards year-end, we expected to -- full year to be below 82, but trend somewhat higher. And this is a guidance which encompasses both the traditional reinsurance as well as GSI. At this point, we wouldn't differentiate any further, but the business makes shift, you were mentioning. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 9:00AM, MUVGn.DE - Half Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call So the significant growth in GSI is obviously incorporated in that number and has also an impact. So therefore, it's all included in there. But I cannot give you a separate number for GSI and a separate number for the traditional reinsurance. This is a debate we can -- I'm very happy to have in a year from now when we have a separate segment and also for GSI. The question with the unrealized losses and if the development of interest rates would change our potential, I think there's plenty of potential for realizing losses and in our book still, independently of the near-term interest rate development. So I don't see any restrictions in that regard.

Question: Faizan Lakhani - HSBC - Analyst : Thanks very much.

Question: Freya Kong - BofA Global Research - Analyst : Hi, thank you for taking my questions. I'm just curious to get your current views on cyber, given the weaker primary rates we've seen. But generally, you are quite supportive of the market longer term. And I noticed some of the business that you cut in casualty included cyber. So just curious of your thoughts there. And then secondly, just on life and health. After stripping out the FX, the underlying fee income is still quite strong and it's really hard to get a sense of the trajectory of that business. Were there any one-offs in that we should be aware of? Thank you. Joachim Wenning - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chairman of the Management Board, Chief Executive Officer Hello, Freya. Thank you. I take the cyber question. The original market is growing. It's growing double digit. That has been going on for many years, and our best forecast is this is not going to change as the need for cyber insurance is growing in the world. The primary rates, the pure rates development in the recent years, one or two years, has been slightly, I would say, not discouraging, not disappointing, but rather slowing down a little bit. Not bad, but not great. So okay-ish, and in some cases, not good enough. The volume cuts that you see at our ends in 2024, they go back to a very firm position that we have taken on terms and conditions in the cyber business. We absolutely want to make sure that we do everything possible that the conditions are as accurate as possible legally to exclude systemic cyber risk because that cannot be absorbed by risk areas. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 9:00AM, MUVGn.DE - Half Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call And cedents who did not follow this route or couldn't follow this route so quickly, they couldn't renew with us. That is our volume reaction. But we already see the first of them coming back after having taken condition actions. So I think we took a small volume dip in 2024. And my best guess is, whether we fully catch up next year or just half of that, I don't know, but we will go back on to a growth slope, I guess. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board The second question was on the IFRS 9 business, the FinMoRe business, if there is any one-offs in these numbers, that's not the case. It's just very positive operating developments, which you also see in that number.

Question: Darius Satkauskas - Keefe, Bruyette & Woods Limited - Analyst : Hi, thank you for taking my question. Sorry to come back to a few points that were already made. So the first one is on the sort of, what is -- I appreciate this is volatility -- but what is management's expectation for what would be a normal sort of annual FinMoRe contribution to the life and health technical result? What would you expect in a pretty average year in the medium term? And the second question is just on the combined ratio. So I think on the first-quarter conference call, you suggested that you were somewhat surprised how good the normalized combined ratio was, and it seems that it remains good. So my question is really, is your qualitative guidance, second half, should be higher? Is it based on you taking a closer look at why it was so good so far, or is it purely driven by conservatism? Thank you. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board Let me start with the second one. So I mentioned business mix already that that was one of the reasons why the NCR would be a bit higher in the second half of the year. And no, it has nothing to do with the one-offs in the first quarter. But business mix is one thing. And then generally, we are probably a bit cautious, but we'll see where we get. And that's it, I think. On the FinMoRe, I think the best estimate for now is really just taking out the capital market-related effects. They are mentioned on the slide anyway. And if you normalize for them, I think that's, as of now, the best estimate what to expect in the quarter. Obviously, it always depends a bit on interest rate movements. Because it's IFRS 9 business, so we account for it also, mark to market, according to IFRS 9. But I think the best approach is really to normalize for interest and FX effects, as I just said. And the numbers are on the slide, and then take it from there.

Question: Roland Fender - Auto BH - Analyst : Yes, good morning. Two questions from my side, please. First of all, coming back to your primary specialty business, you stated that you want to develop it into a more worldwide business. So that would mean there are some maybe internationalization steps ahead. Could you maybe explain the strategy? Is it more organic? Would it be external growth? Or what are your targets there? Secondly, terms and conditions in P&C reinsurance, in which business lines do you see in the market most pressure on terms and conditions, so to say? Thank you. Joachim Wenning - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chairman of the Management Board, Chief Executive Officer Roland, thanks for both questions, which I'm happy to take. Let me start with the second one. Where do we see most pressure on terms and conditions? If I say nowhere, it would not be real. But broadly, there is no pressure on terms and conditions. So the market is behaving disciplined enough to keep terms and conditions at the good quality level that it is today. The second question is, are global speciality insurance strategy and ambition going forward to make it a worldwide proposition, where today in reality it is mainly a US proposition and maybe a small UK proposition but mainly US? At this point in time, it's too early stages to even comment on any worldwide strategy going forward. We just reserve ourselves the option to say, if we are good in the US market, wouldn't it make sense that we try to sort of export those capabilities into other markets as well? Then our answer is yes. Do we have well-worked out plans in place and strategies in place in which market concretely? I would say on an experimental basis, yes, but yet not nothing material. And everything is based organic at this point in time. The inorganic appetite would rather and, unsurprisingly, be in the US at this point in time.

Question: Kamran Hossain - JPMorgan - Analyst : Hi, thanks for taking my follow-up. Just a very brief one. Could you maybe talk about the development of the German GAAP earnings year to date? Obviously, the IFRS 17 looks very positive to some cedents, if that translates into good or as strong German GAAP earnings. And then just on the comment that you made around the business being double the size it was a few years ago, does that mean at some point that the capital returns will also double in size, too? 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. AUGUST 08, 2024 / 9:00AM, MUVGn.DE - Half 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 Yeah, Kamran, I'll take both of them. I start with the second one. I was a bit cautious how to phrase my answer. I did say we doubled the size of our business, which was a rough approximation. I did not say we doubled our capital repatriation. But I said we are committed to substantially increase it following the growth. I mean, any details and whatever you read into my messages, I'm sorry, we have to decide that later on. But a significant portion, obviously, of the higher earnings will be repatriated. Traditionally, our payout ratio always has been very high. It will continue to be very high. So rest assured, we will continue our repatriation strategy as we did it for decades already. And this will not change. And the bigger size of our company will be clearly reflected also in the amounts we are going to pay back to shareholders. And in the light of that answer, I think it's all the good news what I can report on the German GAAP side. We do not do full closings at half year or at Q1 and Q3. So what we do is projections. But all these projections as we do them are currently indicating that we would not run into any shortfalls, any restrictions from a local GAAP perspective in light of potential repatriation strategies going forward.

Question: Tryfonas Spyrou - Berenberg Capital Markets LLC - Analyst : Hi there. Thank you for the opportunity. It's just a very quick one on the impact of interest rates. Clearly, we saw large movements over the last couple of weeks. I just wanted to check how much flexibility do you have in managing any earnings volatility due to the timing differences of discounting any fee over the next few months. Maybe another way to ask the question is, how much interest rates do have to move for these to have a visible impact on the group earnings? Thank you. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board Thanks for the question. I think we had the discussion half a year ago already when the last time the market was discussing interest rate cuts and the potential impact. The general answer is unchanged. I think we are so broadly diversified. And there are so many sources of earnings which would react differently to changed interest rates that at least, short term, I would not see any need to even think about a different earnings level. And we can -- happy to go into any more detail. But the broad answer is, really, well diversified, different earnings components, it will all balance out. Long term, obviously, lower interest rates are kind of a burden because the more money we make on the asset side, clearly it supports the overall net income. So long term, it's a bit of a different picture, but short term, we would be clearly unaffected by that. By the way, the realization of losses and reinvesting early now, what we discussed just before, is also to be seen in the light of a potential cut of central banks. And as you can see, we always try to optimize ourselves also against the current environment and try to make out -- make the best decisions in light of also potential rate action as it might happen or not. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 9:00AM, MUVGn.DE - Half Year 2024 Muenchener Rueckversicherungs Gesellschaft in Muenchen AG Earnings Call

Question: Ivan Bokhmat - Barclays - Analyst : Thank you very much. I'll be brief. One question is about the PMLs, just in the light of your renewals and in the light of some of the comments you made about cyber. Could you perhaps refresh our memory? If we think about, let's say, a cyber, 1 in 200 scenario, would that have been materially changed? I think last time we've discussed this, it was about EUR3 billion on the gross basis. And maybe same about the cuts, the Atlantic hurricane and so on, you mentioned you've increased the property exposure a bit. Would that have moved the PMLs substantially? Thank you. Christoph Jurecka - Muenchener Rueckversicherungs Gesellschaft in Muenchen AG - Chief Financial Officer, Member of the Management Board Yeah. Well, thanks Ivan for the question. First of all, EUR3 billion is not a number, I think, we ever communicated. The EUR3 billion is clearly too high. I think In the past couple of years ago, if you look at our annual publication in light of our analyst conference, you would have seen a cyber scenario in the top five PML scenarios in our slide deck. This was no longer the case this year, as the cut scenarios were bigger than the biggest cyber scenario. And this also had to do with the reduction of exposure we had following the discussion on the war exclusion clause. So therefore, our cyber exposure is a bit more muted than what it was, also in comparison to other scenarios than what it was two years ago, maybe, or three. On the cut side, also nothing significant really to report. All very stable or slightly lower even, but that's very much an FX-driven development. So all very much in the same ballpark, I think. So I would just recommend you to look into the slide deck from our annual analyst conference from earlier this year. I think it was in February this year. I think what you see in there is quite a good approximation still for what our book is looking like currently.

Question: Freya Kong - BofA Global Research - Analyst : Hi. Thanks for the follow-up. I just wanted to ask why the standalone discount rate for P&C re was so high in the quarter. Were there any one-offs in that? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 9:00AM, MUVGn.DE - Half 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 Yeah, Freya, thanks for that question. The discount, obviously, first of all, would change from one quarter to other following the interest rate development in the market. Interest rates went up slightly in Q2, but there's also a second effect in there. The discount rate always depends also on the business and where we have which claims, which losses, depending on currency, for example. Different currencies have different discount rates. That would be one example. Or also then the distribution of losses between basic losses and large losses. Some large losses have clearly longer durations, so longer payout pattern than some of the basic losses. So a higher level of large losses usually would come with a higher impact from the discount rate.