Quarterly Report 1/2009 - Munich Re Group

Interim management report Business experience
Key reinsurance figures 1
10 Munich Re Group Quarterly Report 1/2009
Reinsurance
1 Previous year’s figures adjusted owing to first-time application of IFRS 8.
2 Adjusted pursuant to IAS 8.
– Satisfactory treaty renewals as at 1 January 2009;
further price increases expected
– Combined ratio of 97.3%
– Investment result of €0.9bn impacted by financial crisis
– Consolidated result of €0.7bn
Q1 2009 Q1 2008 2
Gross premiums written €bn 5.9 5.6
Loss ratio property-casualty % 68.9 74.8
Expense ratio property-casualty % 28.4 28.9
Combined ratio property-casualty % 97.3 103.7
Thereof natural catastrophes Percentage points 5.6 10.7
Technical result €m 315 303
Investment result €m 888 993
Operating result €m 851 844
Consolidated result €m 665 579
Thereof attributable to minority interests €m – –
31.3.2009 31.12.2008
Investments €bn 80.2 78.4
Net technical provisions €bn 58.5 55.8
The Munich Re Group’s reinsurance business performed satisfactorily overall
in the first quarter of 2009, as evidenced by the consolidated result of €665m
(579m). The operating result totalled €851m (844m). Thanks to our widely
diversified profitable book of business and the lower number of major losses,
our technical result in reinsurance for the period under review was satisfactory
at €315m (303m), with income from technical interest accounting for
€358m (494m). Our well-balanced investment policy enabled us to post a solid
investment result of €888m (993m) in reinsurance, despite the turbulence on
the financial markets.
By systematically developing our international business, we are further
enhancing Munich Re’s earnings potential. With the acquisition of the Hartford
Steam Boiler Group (HSB Group), which was agreed in December 2008
and concluded at the end of the first quarter of 2009, we consistently pursued
our US strategy of expanding our business further in profitable and highly
specialised niche segments. The core of the HSB Group is Hartford Steam
Boiler Inspection and Insurance Company (HSB). Headquartered in Hartford,
Connecticut, it is one of the largest insurance and inspection companies specialising
in engineering risks in the USA. HSB is a market leader in machinery/
plant and equipment breakdown insurance and also in providing inspection,
certification and engineering services. In 2008, the HSB Group posted a profit
of US$ 31m (188m) after tax, its gross premiums for 2008 totalling US$ 930m
(920m). All figures are based on US GAAP. The provisional purchase price for
100% of the HSB Group’s share capital, excluding incidental acquisition
expenses, was around US$ 739m (€555m).