Corporate governance 017 Report of the Supervisory Board 019 Corporate governance report 024
11 February 2013 Munich Re introduces groundbreaking insurance coverage in collaboration with a US LED module manufacturer that guarantees the luminous intensity and colour consistency of its LED modules for a period of five years. Under the agreement between the two companies, Munich Re assumes a portion of the financial risk entailed in the guarantee.
Torsten Jeworrek Chairman of the Reinsurance Committee Reinsurance Development Corporate Underwriting Corporate Claims (since 1 January 2014) Accounting, Controlling and Central Reserving for Reinsurance Information Technology Global Business Architecture Geo Risks Research/ Corporate Climate Centre
The European insurance sector continued the gratifying price performance begun in 2012 and reached a five-year high towards the end of the year. For the first time in the last 15 years, insurers bettered the performance of the European share price index for two successive years. They also outperformed the European bank index2 and the German DAX 30. Alongside lower risk spreads on government and corporate bonds, a key driver of this development was the US Federal Reserve’s announcement last summer that it would discontinue its low-interest-rate policy (“tapering”). In the second half of the year, this led to rising interest rates on long-term government bonds and expectations of a sustained interest-rate turnaround. Higher interest rates have a positive effect on insurance companies’ financial positions and results in the medium and long term. Given their long-term guarantees, life primary insurers benefited especially, with their share prices responding positively in 2013. Reinsurance companies’ shares profited from the comparatively low major-loss expenditure.
Around 177m Munich Re shares with a total value of around €24.8bn were traded on the German stock exchanges in the year under review, putting our shares in 14th place among the DAX stocks at year-end 2013. In terms of free-float market capitalisation, we also ranked 14th with around €25bn.
Special and Financial Risks (SFR) is in charge of the classes of credit, aviation and space, agriculture, enterprise and contingency risks, and of risk solutions for industrial clients. Insurance risk securitisation and risk transfer to the capital markets are handled by our Risk Trading Unit. In addition, the division is responsible for handling our own reinsurance requirements (retrocession). As part of the structural changes, central responsibility for marine business will be allocated to this division in a new divisional unit. The bundling of this business is intended to further enhance underwriting quality and service for clients worldwide, and also product development.
Current information is also provided at www.ergo.com 1 A detailed list of shareholdings can be found on page 276 ff. in the notes to the consolidated financial statements. 2 The companies listed are mainly subsidiaries and branches outside Germany with equity capital exceeding €5m. 3 Units that also transact business in Munich Health and are therefore allocated proportionately to reinsurance.
Objectives for the business fields – reinsurance – primary insurance – Munich Health Personal objectives Overall performance 0–200% (fully achieved = 100%)
Board members first appointed as from 1 April 2012 are entitled to an occupational pension on retiring from active service with the Company after reaching the age of 62 or, at the latest, at the end of the calendar year in which they turn 67.
Vested benefits under the German Employers’ Retirement Benefits Act (BetrAVG) Board members have vested benefits under the Employers’ Retirement Benefits Act if they leave the Company before reaching the age of 60 or 62 and the pension commitment has existed for at least five years previously.
Subsequently, surviving dependants of a Board member who dies during active service or after retirement receive the following benefits: — Widow(er)’s pension or pension for registered civil partner amounting to 60% of the defined benefit or insured occupational pension. If the spouse or registered civil partner is more than ten years younger than the Board member, the surviving dependant’s pension will be reduced by 2% for each year or part thereof of age difference, but not by more than 50%
— Surviving dependants’ pensions together may not exceed the occupational pension of the Board member. If necessary, the orphans’ pensions will be reduced proportionally
2 The remuneration set for multi­year performance for 2013 is payable in 2016, that for 2014 in 2017. 3 The information on the assessment bases and parameters on page 49 f. for the amounts set for 2013 also applies to the amounts set for 2014.
— Currency-related decline of 1.7% in gross premium income — Major-loss expenditure below the projected range — Decreased investment result — Return on risk-adjusted capital (RORAC) of 12.2% (13.2%) after tax — Proposed dividend increase to €7.25 (7.00) per share
The technical result totalled €370m (420m), meaning that we came gratifyingly close to our target of around €0.4bn. The operating result totalled €551m (721m) and the consolidated result €413m (496m).
Our branch in the United Kingdom, Munich Re, London (Life), kept its premium volume stable at €0.9bn (0.9bn), despite the highly competitive and stagnating market environ ment. Owing to an oversupply of reinsurance capacity, the pressure on the prices of pure mortality covers was unabated. Our business policy is strictly geared to writing business at risk-commensurate prices. Besides this, we are looking to expanding our range of products in order to tap new business potentials. One example is the assumption of longevity risks. We carefully started writing business in this segment in 2011 to diversify our portfolio even better. As in prior years, the technical result remained at a very good level.
Against this backdrop, it is to be considered positive that price levels for reinsurance cover remained stable overall in our portfolio. Rate increases were achieved in lossaffected segments – for instance in marine reinsurance, which was heavily impacted by Hurricane Sandy and the Costa Concordia disaster. In fire reinsurance business, Hurricane Sandy failed to bring about a broad hardening of the market, but at least prevented the slight erosion of prices anticipated in the USA.
Aggregate losses from natural catastrophes came to €764m (1,284m), representing 4.7 (7.7) percentage points of net earned premiums. The two largest individual claims in 2013 were the flooding in central Europe in early summer (€178m) and a hailstorm in southwestern Germany in July (€159m). Besides this, we were impacted by €151m in claims for Hurricanes Manuel and Ingrid, which raged almost simultaneously on the coasts of Mexico in September. In Europe, Windstorms Christian (€80m) and Xaver (€50m) gave rise to further losses. Another major loss event was the flooding in Canada in mid-June, for which €71m was reserved. Argentina was also hit by a flood catastrophe after heavy rains in April. The flood damage and weather-induced fire in a crude oil refinery cost Munich Re €64m. Haiyan, one of the most powerful tropical cyclones ever, caused €64m in damage in the Philippines, China and Vietnam.
Overall, we are consistently pursuing our strategy of seizing growth opportunities in these markets, but systematically reducing our portfolio where risk-commensurate prices, terms and conditions cannot be achieved. Notwithstanding the significant year-on-year increase in major-loss expenditure, we were thus able to record a very good combined ratio of 86.8% (84.5%), a development that was bolstered by the positive run-off of loss reserves for past underwriting years.
Key figures 2013 Prev. year Change % Gross premiums written €m 3,341 3,408 –2.0
Medicare business transacted by WHG after discontinuation of its loss-producing business with pure cost reimbursement products. If exchange rates had remained the same overall, Munich Health’s gross premiums in the reporting year would have increased by 1.4%.
In the course of the year, we reduced the duration of our fixed-interest investments in reinsurance both in absolute terms and relative to our technical liabilities. The reasons behind this were our tactical restraint on the bond market in anticipation of a slight rise in interest rates, and the release of an additional interest position which no longer needed to be held in reinsurance to compensate for an opposite position in life primary insurance. At the end of the year, the duration of fixed-interest investments in reinsurance was slightly below the duration of the technical liabilities. In primary insurance, the durations of fixed-interest investments have come into closer alignment with those of the technical liabilities. In an environment of slightly increasing interest rates, the duration of the liabilities decreased more than that of the fixed-interest investments. At Group level, the duration of our fixed-interest investments was slightly below the duration of our technical liabilities at the end of the year.
The structure of our technical provisions and other liabilities is the basis for Munich Re’s investment strategy, the main focus of which is asset-liability management (ALM). With ALM, we aim to ensure that macroeconomic factors influence the value of our investments and that of our technical provisions and liabilities in the same way. This stabilises our position against capital market fluctuations. For this purpose, we mirror important features of the liabilities – such as maturity patterns, currency structures and inflation sensitivities on the assets side of the balance sheet – by acquiring investments with similar characteristics, where possible.
The legal parameters for the appointment and dismissal of members of the Board of Management are specified in the Company’s co-determination agreement, Articles 13 and 16 of the Articles of Association, Sections 84 and 85 of the German Stock Corporation Act (AktG), and Section 121a para. 1 and 7a of the German Insurance Supervision Act (VAG). Munich Re’s co-determination agreement and Articles of Association have taken over the legal tenets of the German Co-Determination Act (MitbestG). Pursuant to Article 16 of the Articles of Association, the Board of Management must comprise a minimum of two persons; beyond this, the number of members is determined by the Supervisory Board. The Board of Management currently comprises eight members. The Supervisory Board appoints the members of the Board of Management pursuant to Section 84 of the Stock Corporation Act and may dismiss them at any time for good cause. On initial appointment, members of the Board of Management are usually given contracts for a term of between three and five years. Extensions of up to five years are possible. For the appointment or dismissal of members of the Board of Management, Article 13 para. 4 of the Articles of Association stipulates a two-thirds majority of the votes cast on the Supervisory Board. If the
In primary insurance, we attend to the needs of private, commercial and industrial clients, with private clients making up the bulk of our customers. ERGO offers them products and services in connection with old-age provision and saving schemes, protection of property, health, legal cover and travel insurance. Clients can contact us through a wide range of channels: via full-time self-employed agents, through brokers, via the internet, by phone for direct insurance, or via various sales partners.
In primary insurance, for example, we offer individual policies (for private individuals) and group policies (e.g. for companies, employees or public servants). In some cases, brokers help with selling products and client care. For providers that do not operate their own health business, such as banks, Munich Health develops health insurance products and handles their administration. Munich Health’s comprehensive core expertise in the health sector flows into the development of global offerings to meet current client requirements and address new trends. These include services for the management of severe medical conditions.
For this reason, we have extended our established programme of uniform succession planning set up in the previous year for our top managers. Greater emphasis is now placed on Group-wide uniform talent management for top management levels, with systematic development towards defined target positions. The resulting transparency also improves the potential for candidates to be appointed to positions across all the business segments.
In addition to corporate responsibility in core business, the topics of environment and social commitment constitute major elements of our corporate responsibility strategy.
Allocation of CO2 emissions in 2013 (data for Munich Re Munich)
(diesel, petrol, gas) Waste handling 1.1% Paper consumption 0.7% Water consumption 0.3%
Premium risk Line management has primary responsibility for controlling the premium risk. Line managers design internal processes in such a way as to ensure that quality requirements are met. In doing so, they take account of both the specific exposures in their business and the knowledge and experience of their staff.
Our reserves ceded to reinsurers and retrocessionaires were assignable to the following rating categories as at 31 December 2013: The shifts are mainly due to changes in the ratings of a small number of reinsurers and retrocessionaires.
The economic capital buffer is the amount by which the available financial resources exceed the economic risk capital. The economic solvency ratio is the ratio of the available financial resources (less announced but not yet completed capital measures such as the dividend payment for the year just ended) to the economic risk capital. The following table shows the changes in the figures: A detailed presentation of MCEV is available on our website at www.munichre.com/ embeddedvalue/de 5050 Available financial resources €bn 31.12.2013 Prev. year Change IFRS equity 26.2 27.4 –1.2 Off-balance-sheet unrealised gains and losses 1.3 1.2 0.1 Value adjustments for property-casualty and life and health1 9.1 5.3 3.8 Goodwill and other intangible assets –4.0 –4.1 0.1 Tax effects and other –0.2 –0.1 –0.1
The economic solvency ratio of 153% (129%) was up by 24 percentage points on the previous year, emphasising Munich Re’s financial strength. Munich Re’s economic risk capital, which is used to calculate the economic solvency ratio, corresponds to 1.75 times the capital that is likely to be necessary under Solvency II according to our internal risk model. Were we not to apply the safety cushion of 75% to the value at risk with a confidence level of 99.5% and merely to comply with the Solvency II standard, the economic solvency ratio would be 267% (225%).
Information on the treatment of goodwill can be found in the notes to the consolidated financial statements on page 166 and further information on the results of the impairment tests on page 186 ff.
In accordance with the prescribed processes, Munich Re’s Board committees explicitly defined the risk appetite for significant risk categories in the year under review, and quantified it with key figures. We determined and documented the risk appetite across the Group hierarchy and communicated it throughout Munich Re. During the whole of 2013, risk exposures were regularly quantified and compared with the risk appetite. We assess Munich Re’s risk situation to be manageable and under control.
Additional opportunities exist in attractive niche markets. Crop failure insurance, for example, is seeing strong growth based on public-private partnerships, since the provision of food to a growing world population and the consequences of climate change are increasing the need for farmers to protect themselves against financial risks. A market leader in this area, Munich Re has built up competence and established sustainable insurance concepts together with supervisory authorities and primary insurers. Munich Re is also carving out attractive niches in industrial insurance business, in areas where we can put our reinsurance business know-how to use, e.g. in connection with power generation and sophisticated large-scale engineering projects. This also applies to the acquisition of RenRe Energy Advisors Ltd. (REAL), a US specialist for weather risks. Under its new name of Munich Re Weather & Commodity Risk Advisors LLD, we are systematically expanding our expertise for assuming and trading such risks. Another example of the targeted development of attractive niches is the risk transfer solution we have provided together with our business partners GCube and Marsh for a large solar power plant in Morocco.
At €6.6bn, gross premiums were almost exactly at the forecast level of just over €6.5bn.
For 2014, we are aiming for a consolidated result of €3bn, some €0.3bn below the particularly good result in 2013. This profit guidance is subject to claims experience with regard to major losses being within normal bounds and to our income statement not being impacted by severe currency or capital market movements, significant changes in fiscal parameters, or other special factors. We anticipate that compared with last year, the effective tax rate will return to a normal range of 20–25%.
Assets A intangible assets 166 b investments 166 C investments for the benefit of life insurance policyholders who bear the investment risk 170 D Ceded share of technical provisions 171 e Receivables 171 F Cash at banks, cheques and cash in hand 171 g Deferred acquisition costs 171 h Deferred tax assets 172 i other assets 172 equity and liabilities A equity 173 b subordinated liabilities 173 C gross technical provisions 173 D gross technical provisions for life insurance policies where the investment risk is borne by the policyholders 176 e other accrued liabilities 176 F Liabilities 177 g Deferred tax liabilities 178
Notes 2013 Prev. year Change €m €m €m €m €m % Gross premiums written 51,060 51,969 –909 –1.7 2. Income from technical interest (31) 6,764 6,918 –154 –2.2 3. Expenses for claims and benefits (32) gross 40,698 41,842 –1,144 –2.7 Ceded share 782 846 –64 –7.6
Change resulting from cash flow hedges Gains (losses) recognised in equity –1 – Recognised in the consolidated income statement – 1
The amendments published as part of the IFRS Annual Improvement Process in May 2012 concern IFRS 1, First-time Adoption of International Financial Reporting Standards, which only includes rules for IFRS first-time users and is thus basically not relevant for Munich Re, as well as IAS 1, Presentation of Financial Statements, IAS 16, Property, Plant and Equipment, IAS 32, Financial Instruments: Presentation, IAS 34, Interim Financial Reporting, and the consequential amendment to the interpretation of IFRIC 2, Members’ Shares in Co-operative Entities and Similar Instruments. Only the amendment to IAS 1, Presentation of Financial Statements, is of practical significance for Munich Re, and this simplifies the rules currently in place. In the case of a retrospective change in accounting policies or a retrospective adjustment or reallocation of items under IAS 8, the publication of a binding third comparative balance sheet is only necessary if the change has a major impact. Where such a binding third comparative balance sheet has to be published, it is no longer necessary to make the relevant disclosures in the notes.
The effects on the consolidated income statement for the financial year 2012 are as follows: The relevant items of the segment information and notes for the previous year have been adjusted.
IFRIC Interpretation 21 (05/2013), Levies clarifies the point of recognition of a liability within the scope of IAS 37 for levies imposed by governments, other than income taxes, that do not fall within the scope of application of other IFRSs. As well as determining the point of recognition, the Interpretation clarifies how to interpret the definition of “present obligation” within the meaning of IAS 37 with respect to such levies. This interpretation has no practical relevance for Munich Re.
The balance sheet date of the consolidated companies is generally 31 December. Some of the special funds have other balance sheet dates. These funds are consolidated on the basis of interim accounts as at 31 December. Acquisitions are accounted for by the purchase method. In order to determine the equity capital at the time of acquisition, we measure the acquired identifiable assets and liabilities of the subsidiary or special purpose entity at fair value. The consideration transferred in exchange for the acquired shares is netted against the equity capital apportionable to the Group at the time of acquisition. Any residual positive amount is capitalised as goodwill. Profits earned by
Non-controlling interests are accounted for in the balance sheet as part of equity. These are the shares of third parties in the equity of subsidiaries that are not wholly owned directly or indirectly by Munich Reinsurance Company. Direct minority interests in special funds and in partnerships are recognised under “other liabilities”. The portion of the result attributable to non-controlling interests is shown in the consolidated result.
In primary insurance, measurement is generally carried out individually for each risk. For German life primary insurance, biometric actuarial assumptions based on the tables of the German Association of Actuaries are used. We also largely use the tables of the national actuarial associations for the rest of the primary insurance business. The actuarial interest rate employed for discounting in life primary insurance is limited by the respective maximum actuarial interest rate prescribed by the supervisory author ities. In health primary insurance, discount rates are chosen that reflect the best estimate of expected investment income, less a safety margin.
C. Investments for the benefit of life insurance policyholders who bear the investment risk – – – – 6,698 5,957 – – – – 1 1 – – 6,699 5,958 D. Ceded share of technical provisions 1,096 1,140 1,932 2,186 1,700 1,862 20 22 386 340 171 180 – – 5,305 5,730
Reinsurance Primary insurance Munich Health Asset management Total Life Property-casualty Life Health Property-casualty €m 2013 Prev. year 2013 Prev. year 2013 Prev. year 2013 Prev. year 2013 Prev. year 2013 Prev. year 2013 Prev. year 2013 Prev. year 3. Expenses for claims and benefits Gross 8,312 8,536 10,211 10,393 7,555 7,816 5,977 6,021 3,457 3,653 5,186 5,423 – – 40,698 41,842
Other investments – – – – Investments for the benefit of life insurance policyholders who bear the investment risk 5,958 – – 5,958 1 Including hedging derivatives of €229m (309m) accounted for under “other assets”. 2 As the requirement to provide information on investments not measured at fair value through profit or loss became mandatory for the first time with respect to the financial year 2013, there are no comparative figures for the previous year.
Gains (losses) recognised in the income statement –4 –8 –6 –2 Gains (losses) recognised in equity –11 38 –1 2
Munich Re Group Annual Report 2013 5 Investments in affiliated companies and associates
Accounted for using the equity method 1,291 1,267 Accounted for at fair value 9 16
Total weather risks Fair values – – – – – – – 6
Periods to maturity and amount of the hedged cash flows at the balance sheet date €m < 1 year 1–2 years 2–3 years 3–4 years 4–5 years > 5 years 31.12.2013 Prev. year Notional amounts of hedged transactions 25 – 25 25 – 314 389 389 8060Development of tangible assets in renewable energies €m 2013 Prev. year Gross carrying amount at 31 Dec. previous year 545 282 Accumulated depreciation and accumulated impairment losses at 31 Dec. previous year 45 22 Carrying amount at 31 Dec. previous year 500 260 Changes due to currency translation –3 – Additions
In the year under review, a total of €1,255m was distributed to Munich Reinsurance Company’s equity holders for the financial year 2012 in the form of a dividend of €7.00 per dividend-bearing share.
The ultimate loss of an accident year comprises all payments made for that accident year up to the reporting date, plus the claims reserve at the reporting date. Given complete information regarding all losses incurred up to the balance sheet date, the ultimate loss status for each accident-year period would remain the same. In practice, however, it may be assumed that the ultimate-loss status (based on estimates) is exposed to fluctuations that reflect the growth in knowledge about the claims cases. Changes in the consolidated group, especially new acquisitions or the composition of segments to be reported, can also have an influence on the ultimate-loss status.
% 2013 Prev. year Discount rate 3.6 3.1 Future increases in entitlement/salary 2.0 2.3 Future pension increases 1.5 1.6 Medical cost trend rate 3.9 4.1
The expenses are distributed between the functional areas and shown mainly under “operating expenses” and “expenses for claims and benefits” in the consolidated income statement.
Reinsurance Life Property-casualty €m 2013 Prev. year 2013 Prev. year Income from technical interest 683 658 1,183 1,323
The risks presented in this section concern business from the segments life and health primary insurance, life reinsurance and Munich Health. The Munich Health segment comprises primary insurance and reinsurance contracts. Since the disclosures are geared to the presentation of the relevant risks, Munich Health is not shown separately but reflected either in primary insurance or reinsurance, depending on the type of business involved.
If provisions are covered by deposits retained on assumed reinsurance, the interest is directly secured by an inflow of investment income generally guaranteed by the cedants. Consequently, for provisions for which at least the discount rate is guaranteed by the cedants, there is no interest-rate risk. For deposits amounting to €1,035m (1,078m), cedants do not provide any interest-rate guarantee. Therefore, for the remaining group of all provisions whose interest is not guaranteed by cedants, the application of the liability adequacy test as per IFRS 4 ensures that the expected income from the investments covering the technical provisions is sufficient to meet future obligations as a whole.
In primary insurance, there is substantial risk minimisation through product design. For the most part, prudent actuarial assumptions are used in fixing the guaranteed benefits, in addition to which policyholders are granted a performance-related participation in surplus. More than 96% (97%) of the amounts shown under (22) Provision for future policy benefits is apportionable to such contracts. Given the relevant margins in the actuarial assumptions, it is also possible to fulfil the future guaranteed obligations without adjusting the provisions in the case of moderate changes in assumptions. Of great significance for risk-balancing in the case of adverse developments are parts of 1 Premiums less benefits guaranteed at the balance sheet date and costs (excluding unit-linked products).
Change in the event of a sustained increase in interest rates of 100 BP –421 –503 1,229 2,298 Change in the event of a sustained decrease in interest rates of 100 BP 435 388 –1,727 –3,769 Change in the event of a 10% decrease in the value of equities and real estate –8 –9 –205 –176 Change in the event of an increase in mortality by 5% in the case of contracts mainly covering the mortality risk –1,449 –1,515 –26 –42 Change in the event of a decrease in mortality by 5% in the case of contracts mainly covering the longevity risk –80 –70 –93 –180 Change in the event of an increase in morbidity by 5% –286 –292 –41 –73 Change in the event of an increase in the lapse rate by 10% –252 –319 37 140
Information on the remuneration of Board members and transactions with these persons can be found in the remuneration report, starting on page 46 and under (47) Remuneration report. Transactions between Munich Reinsurance Company and subsidiaries that are to be deemed related parties have been eliminated in consolidation and are not disclosed in the notes. Business relations with unconsolidated subsidiaries are of subordinate importance as a whole; this also applies to business relations with associates.
Number of rights on 31 Dec. 2013 – 51,482 41,505 37,822 127,164 Exercisable at year-end – 51,482 41,505 37,822 127,164
Number of rights on 31 Dec. 2013 – 17,963 5,844 3,386 7,088 Exercisable at year-end – 17,963 5,844 3,386 7,088
The finance leases concern in particular rents for offices and business premises of the Group. They include extension options as well as restrictions regarding the agreement of subleases. The following table shows the future minimum lease payments and their present value at 31 December 2013.
Vorsorge Lebensversicherung Aktiengesellschaft, Düsseldorf3 100.0000 Vorsorge Luxemburg Lebensversicherung S.A., Munsbach 100.0000 Watkins Syndicate Hong Kong Limited, Hong Kong 67.0000 Watkins Syndicate Labuan Limited (WSLAB), Labuan 100.0000 Watkins Syndicate Middle East Limited, Dubai 100.0000 Watkins Syndicate Singapore Pte. Limited, Singapore 100.0000 welivit GmbH, Nuremberg 100.0000 welivit Solarfonds GmbH & Co. KG, Nuremberg 100.0000 welivit Solarfonds S.a.s. di welivit Solar Italia S.r.l., Bolzano 100.0000 WFB Stockholm Management AB, Stockholm4 50.0000 Wind Farms Götaland Svealand AB, Hässleholm 100.0000 Windpark MR-B GmbH & Co. KG, Bremen2 100.0000 Windpark MR-D GmbH & Co. KG, Bremen2 100.0000 Windpark MR-N gmbH & Co. KG, Bremen2 100.0000 Windpark MR-S GmbH & Co. KG, Bremen2 100.0000 Windpark MR-T GmbH & Co.KG, Bremen2 100.0000 Windsor Health Plan of Georgia, Inc., i.L., Atlanta, Georgia 100.0000 Windsor Health Plan of Louisiana, Inc., i.L., Lafayette Louisiana 100.0000 wse Solarpark Spanien 1 GmbH & Co. KG, Fürth 75.1243
Dr. Frank Ellenbürger Roland Hansen Wirtschaftsprüfer Wirtschaftsprüfer (Certified public accountant) (Certified public accountant)
Cycle management Continuously analysing and managing the course of a cycle. Insurance, reinsurance and retrocession markets are subject to global and regional cycles that may have external (interest-rate development, economic development, major losses, etc.) and internal causes (price competition, premium calculation methods, etc.). Managing the cycle means using an analysis to take pro active strategic measures and ensure risk-commensurate terms (prices, scope of cover, and conditions) in every phase.
Loss ratio Percentage ratio of net operating expenses to net earned premiums.
Net asset value Value of all tangible and intangible assets of a company minus its liabilities. It reflects a company’s fundamental value.
Middle East and Africa Munich Health Middle East and Africa Munich Re Underwriting Agents (DIFC) Ltd. Level 4, Unit 4, Currency House (Al Fatan) Dubai International Financial Center P.O.Box 506512 United Arab Emirates