Munich Re Group Changing Gear gg
Munich Re Group Changing Gear gg
Munich Re Group Changing Gear gg
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Sustainable profitability<br />
Significant reduction of asset exposure<br />
Equity gearing 1<br />
178<br />
Extended view 2<br />
% as at end of period % as at end of period<br />
110<br />
87<br />
72<br />
71<br />
51<br />
36<br />
2002 2003 2004 2005 2006 2007 Q1–2<br />
2008<br />
114<br />
<strong>Munich</strong> <strong>Re</strong> <strong>Group</strong><br />
1 Equity exposure (after hedges, net of tax and policyholder participation) divided by shareholders' capital (incl. net off-balance-sheet reserves, excl. goodwill).<br />
2 Incl. exposure in real estate, structured products and corporate bonds rated below AA. 3 After taking equity derivatives into account.<br />
Visible impact of derisking<br />
Cost of capital substantially reduced<br />
Investment risks<br />
Lowered equity gearing<br />
<strong>Re</strong>duced concentration risks<br />
Very moderate credit risk<br />
Asset-liability management<br />
State-of-the-art ALM<br />
Strong risk management<br />
Insurance risks<br />
Active cycle management<br />
High diversification<br />
Strong <strong>Group</strong> reserves<br />
Beta factor <strong>Munich</strong> <strong>Re</strong> and industry<br />
2.2<br />
20 2.0<br />
Source: Bloomberg raw beta to DJ Stoxx 600, total return, daily basis, 1-year. Status 31 July 2008.<br />
1.8<br />
1.6<br />
1.4<br />
1.2<br />
1.0<br />
0.8<br />
0.6<br />
90<br />
90<br />
2006 2007 Q1–2 2008<br />
Significantly<br />
reduced to<br />
below 0.8 for<br />
<strong>Munich</strong> <strong>Re</strong><br />
2004 2005 2006 2007 2008<br />
<strong>Munich</strong> <strong>Re</strong> DJ EuroStoxx Insurance<br />
Derisking reflected in significant<br />
reduction of cost of capital<br />
<strong>Munich</strong> <strong>Re</strong><br />
now well<br />
bbelow l industry<br />
i d t<br />
<strong>Munich</strong> <strong>Re</strong> <strong>Group</strong> – October 2008<br />
4<br />
<strong>Munich</strong> <strong>Re</strong> <strong>Group</strong> – October 2008<br />
5
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