Munich Re Group Annual Report 2006 (PDF, 1.8

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Munich Re Group Annual Report 2006 The ratings for our subsidiaries on 28 February 2007 at a glance: Reinsurance group A.M. Best Fitch Moody’s S&P American Alternative Insurance Corporation Great Lakes Reinsurance A AA– (UK) PLC A+ AA– Münchener Rück Italia Munich American A+ AA– Reassurance Company Munich Mauritius A+ AA– Reinsurance Company Munich Reinsurance BBB America Munich Reinsurance A AA– Aa3 AA– Company of Africa Munich Reinsurance A– Company of Australasia Munich Reinsurance A+ AA– Company of Canada Munich Re A+ AA– Life E. E. C. A. New Reinsurance A2 Company Princeton Excess and Surplus A+ AA– Lines Insurance Company A AA– Temple Insurance Company A Primary insurance group A.M. Best Fitch Moody’s S&P DAS Legal Insurance Co. Ltd. DKV Deutsche Krankenver- A sicherung Aktiengesellschaft A+ AA– ERGO Previdenza SpA Hamburg-Mannheimer A Sachversicherungs-AG Hamburg-Mannheimer Versicherungs-Aktien- AA– Gesellschaft KarstadtQuelle LebensversicherungAktien- A+ Aa3 AA– gesellschaft Victoria Lebensversicherung BBB+ Aktiengesellschaft Victoria Versicherung A+ Aa3 AA– Aktiengesellschaft AA– 102 Management report_Financial situation Bonds and notes issued The bonds and notes issued by our Group are rated as follows: A.M. Best Fitch Moody’s S&P Munich Re Finance B.V., 6.75%, €3.0bn, Subordinated Bonds 2003/2023 Munich Re Finance B.V., 7.625%, £300m, Subordinated Bonds a A A2 A 2003/2028 Munich Re America Corporation a A A2 A * , 7.45%, US$ 500m, Senior Notes 1996/2026 bbb A2 A– * Formerly American Re Corporation. Analysis of the consolidated cash flow statement Our primary insurance and reinsurance operations have a significant influence on the cash flow of the Munich Re Group. We generally first collect the premiums for the risks assumed and do not make payments until later, in the event of loss. The cash flow statements of insurance companies are therefore of limited relevance. The cash flow statement is adjusted to eliminate the effects of fluctuations in exchange rates and changes in entities consolidated. Consolidated cash flow statement All figures in €m 2006 Prev. year * Cash flows from operating activities 6,886 6,119 Cash flows from investing activities –4,496 –2,928 Cash flows from financing activities –2,496 –2,901 Cash flows for the financial year –106 290 * Adjusted owing to first-time application of IAS 19 (rev. 2004). The strong cash inflows from operating activities are attributable to the highly satisfactory performance of these activities. The excellent consolidated result of €3,536m has been adjusted in the consolidated cash flow statement by €1,423m to take account of the change in technical provisions. There was an increase in provisions for future policy benefits at the Group’s primary insurers due to the continu-
Munich Re Group Annual Report 2006 Management report_Financial situation ing decline in policy terminations and to portfolio development and strong new business production, particularly at recently established companies abroad. Conversely, these provisions fell at our reinsurance companies as a result of our planned reduction in a high-volume quota share reinsurance treaty. The loss reserves at the reinsurers in the Munich Re Group declined primarily because of the settlement of a large number of claims from prior years in respect of which we had posted reserves, and the reduced need for new reserves due to the absence of severe natural catastrophes. The positive cash flow generated by the fall in the balance of other receivables and liabilities of €1,303m resulted from rearrangements of the investment portfolio. The net gains on the disposal of investments – which in adjusting the consolidated profit have to be deducted from the cash flows from operating activities – are essentially attributable to the disposal of securities available for sale. The cash outflows for investing activities were determined by payments for the acquisition of investments. These exceeded the inflows from the sale/maturity of investments by €4,157m. The inflows from the sale of consolidated companies include the ADA-HAS Group. The sales consideration of €10m was received in cash. In the financial year 2006, we acquired a 75% stake in the I . sviçre Insurance Group. We paid €211m of the purchase price in cash and offset this in the cash flow statement against the cash of €21m held by the subsidiaries acquired. The Munich Re Group additionally assumed a total of €124m in investments and €191m in technical provisions through acquisitions. The cash outflows for financing activities stem primarily from the dividend payment for 2005 of €723m and that part of the redemption of the ERGO International AG exchangeable bonds with impact on cash flow totalling €335m. The share buy-back resulted in a cash outflow of €259m. Overall, in the year under review cash – which includes cash at bank, cheques and cash in hand – fell slightly by €106m to €2,172m. 103
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Munich Re Group Annual Report 2006
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The Munich Re Group Our operations
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Munich Re Group in 2006 Tireless an
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Notable events in 2006 / Letter to
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Munich Re Group / Parameters / Busi
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Glossary / Index of key terms / Imp
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Quarterly figures Balance sheet 31.
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© 2007 Münchener Rückversicherun
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