Image: Getty Images/fStop Shaping change in insurance Analysts' conference 2017 Munich, 15 March 2017 Agenda 1 Shaping change in insurance 4 ERGO Nikolaus von Bomhard Markus Rieß 2 29 2 Group Finance 5 Reinsurance Property-casualty Jörg Schneider Torsten Jeworrek 13 43 3 Risk management 6 Reinsurance Life Bernhard Kaufmann Joachim Wenning 22 55 7 Additional information 61 Analysts' conference 2017 2 Shaping change in insurance Munich Re delivers financial stability IFRS net income HGB distributable earnings Dividend per share1 2.6 4.2 8.60 € € € bn bn Meeting guidance Safeguards +4.2% capital repatriation Solvency II ratio Debt leverage Goodwill 267 12.6 8.9 % % % Well above One of the lowest in the Moderate in relation to target capitalisation insurance industry shareholders’ equity 1 Subject to approval of AGM. Analysts' conference 2017 3 Shaping change in insurance Shaping change in insurance – Seizing long-term opportunities while managing short-term pressure Changing competitive landscape Digitalisation Macroeconomic/political risks  Emergence of new players and  New technologies and partnerships  Persistently low interest rates business models  Dramatically enhanced availability  Reflation  Proliferation of “alternative” capital of data and analysis tools  Global political uncertainty  Transformation of traditional  Changing customer expectations value chain Source: Shutterstock[M] GOAL GOAL GOAL Agile business model Fostering innovation Dampening volatility Analysts' conference 2017 4 Shaping change in insurance Was 2016 the turning point for interest rates and inflation? – Uncertainty remains, while Munich Re is well positioned for all scenarios Political uncertainty … recent pick-up in … which have pushed up a major driver of … inflation expectations1 … government bond yields2 UK 4 4 Brexit negotiations 3 3 USA Fiscal stimulus, shift towards 2 protectionism 2 1 Eurozone 1 Several elections in 2017 UK 0 UK USA with uncertain outcome USA Eurozone Germany 0 –1 2014 2015 2016 2017 2014 2015 2016 2017 Limit downside – diversification Prudent reserving approach Positive for economic risk capital and strict risk management safeguards resilience and reinvestment yields Source: Bloomberg, Munich Re Economic Research. Data until 28.2.2017. 1 5yr/5yr breakeven rates. 2 10-year government bond yields. Analysts' conference 2017 5 Shaping change in insurance Predictable results despite underlying earnings pressure Predictability Low interest rates Actual net result vs. guidance €bn Attrition of running yield –Munich Re (Group) Guidance Actual Disposal 3.6% 3.2 3.3 3.2 Result gains 3.1 impact1 without 2.6 2.8% aggressive approx. harvesting –€0.7bn 2012 2016 Competition in P-C reinsurance Increasing normalised combined ratio Reserve ~100% Result releases impact1 without ~94% approx. weakening reserve strength –€0.7bn 2012 2013 2014 2015 2016 2012 2016 1 Impact on IFRS net result from 2012 until 2016. Rough estimate based on simplified assumption on policyholder participation and tax effects. Analysts' conference 2017 6 Shaping change in insurance Strong balance sheet supports sound profitability, … Medium Strong capitalisation RoE exceeds cost of capital % Low High according to all metrics 16 Value creation 12 8  Rock-solid Average cost of capital reserving position 4 0 2005 2016 28 10.7 8 € bn ~ % > ~ % unrealised investment gains1 12-year average RoE Average cost of capital 1 As at 31.12.2016. Analysts' conference 2017 7 Shaping change in insurance … facilitating attractive shareholder returns Further dividend increase, continuation of €1bn buy-back until AGM 2018 Continuous growth of dividend per share Outperforming major peers and insurance index2 % CAGR: 9.7% €8.60 Total shareholder return (p.a.) 18 Peer 3 3.10 15 12 2005 20161 9 Peer 1 Peer 4 Peer 6 23 >€ bn 6 Index Peer 5 Total pay-out since 2005 3 (dividend and share buy-back) 0 Peer 2 74 50.9 million > million –3 20 25 30 35 40 45 Shares repurchased Shares issued in 2003 Volatility of total shareholder return (p.a.) since 2006 (capital increase) 1 Subject to approval of AGM. 2 Annualisedtotal shareholder return defined as price performance plus dividend yield over the period from 1.1.2005 until 28.2.2017; based on Datastreamtotal return Analysts' conference 2017 8 indices in local currency; volatility calculation with 250 trading days per year. Peers: Allianz, Axa, Generali, Hannover Re, Swiss Re, ZIG, StoxxEurope 600 Insurance (“index”). Shaping change in insurance Reinsurance – Well positioned to manage the current market environment and drive innovative solutions ILLUSTRATIVE w Traditional reinsurance e N TOTAL1,2 Solutions Successfully managing €23 for emerging bn Emerging risks the soft cycle markets New products/ risk-related Risk services ste Solutions Risk Solutions kr Tailor-made TOTAL1 a Continuous growth in M solutions €4.8bn specialty and niche business Under- insurance in developed markets Incremental Innovation d Traditional innovations ehsilb reinsurance Steady expansion of ~€TO6T5AL01,3m a ts innovative products/solutions E Established Products New 1 Premiums as at 31.12.2016. 2 Life (traditional and strategic initiatives): €10bn, traditional P-C: €13bn. 3 Munich Re (Group); indirect effects on traditional business not included. Analysts' conference 2017 9 Shaping change in insurance ERGO – Turnaround initiated, well on track to become a significant earnings contributor ERGO Strategy Programme/International Strategy Increasing IFRS net profit1 €m ~600+ Fit Digital Successful! 530 150–200 Leaner and Transforming Convincing solutions, more efficient the business committed to structures model profitable growth –40 2016 2017 … 2020 2021 1 From 2017, figures include primary insurance business of Munich Health. Analysts' conference 2017 10