MR Beteiligungen 2. EUR AG & Co. KG, Grünwald2 100.0000 MR Beteiligungen 3. EUR AG & Co. KG, Grünwald2 100.0000 MR Beteiligungen EUR AG & Co. KG, Grünwald2 100.0000 MR Beteiligungen GBP AG & Co. KG, Grünwald2 100.0000 MR Beteiligungen USD AG & Co. KG, Grünwald2 100.0000 MR Debt Finance GmbH, Munich 100.0000 MR Electra LP, Dover, Delaware 100.0000 MR ERGO Beteiligungen GmbH, Grünwald 100.0000 MR Infrastructure Investment GmbH, Munich 100.0000 MR Investment Inc., Dover, Delaware 100.0000 MR Jordan LP, Dover, Delaware 100.0000 MR RENT UK Investment Limited, London 100.0000 MR RENT-Investment GmbH, Munich3 100.0000 MR Solar GmbH & Co. KG, Nuremberg 100.0000 MR SOLAR SAS DER WELIVIT SOLAR ITALIA S.r.l., Bolzano 100.0000 MSP Underwriting Ltd., London 100.0000 MU068 MR Placem (FCP), Paris4 100.0000 Munich American Holding Corporation, Wilmington, Delaware 100.0000 Munich American Life Reinsurance Company, Atlanta, Georgia 100.0000 Munich American Reassurance Company, Atlanta, Georgia 100.0000 Munich Atlanta Financial Corporation, Atlanta, Georgia 100.0000 Munich Health Alpha GmbH, Munich3 100.0000 Munich Health Daman Holding Ltd., Abu Dhabi 51.0000 Munich Health Holding AG, Munich3 100.0000 Munich Health North America Inc., Wilmington, Delaware 100.0000 Munich Holdings Ltd., Toronto, Ontario 100.0000 Munich Holdings of Australasia Pty Ltd, Sydney 100.0000 Munich Life Management Corporation Ltd., Toronto, Ontario 100.0000 Munich Mauritius Reinsurance Co. Ltd., Port Louis 100.0000 Munich Re America Corporation, Wilmington, Delaware 100.0000 Munich Re America Services Inc., Wilmington, Delaware 100.0000 Munich Re Automation Solutions Limited, Dublin 100.0000 Munich Re Capital Limited, London 100.0000 Munich Re Digital Partners US Holding Corporation, Dover, Delaware 100.0000 Munich Re do Brasil Resseguradora SA, São Paulo 100.0000 Munich Re Life Insurance Company of Vermont, Burlington, Vermont 100.0000 Munich Re New Ventures Inc., Toronto, Ontario 100.0000 Munich Re of Malta Holding Limited, Ta’ Xbiex 100.0000 Munich Re of Malta p.l.c., Ta’ Xbiex 100.0000 Munich Re PCC Limited, Ta’ Xbiex 100.0000 Munich Re Reserve Risk Financing Inc., Dover, Delaware 100.0000 Munich Re Specialty Group Ltd., London 100.0000 Munich Re Stop Loss Inc., Wilmington, Delaware 100.0000 Munich Re Syndicate Hong Kong Ltd., Hong Kong 100.0000 Munich Re Syndicate Labuan Limited, Labuan 100.0000 Munich Re Syndicate Limited, London 100.0000 Munich Re Syndicate Middle East Ltd., Dubai 100.0000 Munich Re Syndicate Singapore Ltd., Singapore 100.0000
Euro-Center USA Inc., New York, New York 100.0000 Euro-Center Yerel Yardim Hizmetleri Ltd. Şti., Istanbul 100.0000 European Assistance Holding GmbH, Munich 100.0000 Evaluación Médica TUW S.L., Barcelona 100.0000 Exolvo GmbH, Hamburg 100.0000 Gamaponti 140014 S.L., Valencia 100.0000 GBG Vogelsanger Straße GmbH, Cologne 94.7826 Gebäude Service Gesellschaft Überseering 35 mbH, Hamburg 100.0000 goDentis – Gesellschaft für Innovation in der Zahnheilkunde mbH, Cologne 100.0000 GRANCAN Sun-Line S.L., Valencia 100.0000 Great Lakes Re Management Company (Belgium) S.A., Brussels 100.0000 Group Risk Technologies Ltd., London 100.0000 Guanzu 2002 S.L., Valencia 100.0000 Hamburger Hof Management GmbH, Hamburg 100.0000 Hamburg-Mannheimer ForsikringService A/S, Copenhagen 100.0000 Hansekuranz Kontor GmbH, Münster 51.0000 Hartford Steam Boiler Colombia Ltda, Bogotá 100.0000 Hartford Steam Boiler UK Limited, Salford 100.0000 Hestia Loss Control Sp. z o.o., Sopot 100.0000 Horbach GmbH Versicherungsvermittlung und Finanzdienstleistungen, Düsseldorf 70.1000 HSB Associates Inc., New York, New York 100.0000 HSB Ventures Inc., Dover, Delaware 100.0000 IDEENKAPITAL Anlagebetreuungs GmbH, Düsseldorf 100.0000 Ideenkapital Client Service GmbH, Düsseldorf 100.0000 Ideenkapital erste Investoren Service GmbH, Düsseldorf 100.0000 Ideenkapital Fonds Treuhand GmbH, Düsseldorf 100.0000 Ideenkapital Media Treuhand GmbH, Düsseldorf 100.0000 IDEENKAPITAL Metropolen Europa Verwaltungsgesellschaft mbH, Düsseldorf 100.0000 IDEENKAPITAL PRORENDITA EINS Treuhandgesellschaft mbH, Düsseldorf 100.0000 IDEENKAPITAL Schiffsfonds Treuhand GmbH, Düsseldorf 100.0000 Ideenkapital Treuhand US Real Estate eins GmbH, Düsseldorf 100.0000 IK Einkauf Objektverwaltungsgesellschaft mbH, Düsseldorf 100.0000 IK Einkaufsmärkte Deutschland Verwaltungsgesellschaft mbH, Düsseldorf 100.0000 IK FE Fonds Management GmbH, Düsseldorf 100.0000 IK Komp GmbH, Düsseldorf 100.0000 IK MEGA 4 Service GmbH, Düsseldorf 100.0000 IK Objekt Bensheim GmbH, Düsseldorf 100.0000 IK Objekt Frankfurt Theodor-Heuss-Allee GmbH, Düsseldorf 100.0000 IK Pflegezentrum Uelzen Verwaltungs-GmbH, Düsseldorf 100.0000 IK Property Eins Verwaltungsgesellschaft mbH, Hamburg 100.0000 IK Property Treuhand GmbH, Düsseldorf 100.0000 IK US Portfolio Invest DREI Verwaltungs-GmbH, Düsseldorf 100.0000 IK US Portfolio Invest Verwaltungs-GmbH, Düsseldorf 100.0000
IK US Portfolio Invest ZWEI Verwaltungs-GmbH, Düsseldorf 100.0000 Jogszerviz Kft, Budapest 100.0000 Junos Verwaltungs GmbH, Munich 100.0000 JUSTIS GmbH, Etoy 100.0000 K & P Objekt Hamburg Hamburger Straße GmbH, Düsseldorf 100.0000 K & P Objekt Hamburg Hamburger Straße Immobilienfonds GmbH & Co. KG, Düsseldorf4 36.6889 K & P Objekt München Hufelandstraße GmbH i. L., Düsseldorf 100.0000 KQV Solarpark Franken 1 GmbH & Co. KG, Düsseldorf 100.0000 Kuik & Partners Credit Management BVBA, Brussels 98.9000 Larus Vermögensverwaltungsgesellschaft mbH, Munich 100.0000 Legal Net GmbH, Munich 100.0000 Leggle B.V., Amsterdam 100.0000 m:editerran Power S.a.s. di welivit Solar Italia S.r.l., Bolzano 100.0000 Marbury Agency Inc., Amelia, Ohio 100.0000 MAYFAIR Financing GmbH, Munich 100.0000 MAYFAIR Holding GmbH i. L., Düsseldorf 100.0000 MEAG Center House S.A., Brussels 100.0000 MEAG Dividende (A+I Tranche), Munich4 88.9010 MEAG EM Rent Nachhaltigkeit (A+I Tranche), Munich4 98.7465 MEAG FlexConcept – EuroGrowth, Luxembourg4 100.0000 MEAG GlobalRent (A+I Tranche), Munich4 99.6325 MEAG Hong Kong Limited, Hong Kong4 100.0000 MEAG Luxembourg S.à r.l., Luxembourg4 100.0000 MEAG MultiSmart (A+I), Munich4 61.1256 MEAG Osteuropa A, Munich4 40.4926 MEAG Pension Rent, Munich4 100.0000 MEAG Pension Safe, Munich4 100.0000 MEAG Real Estate Erste Beteiligungsgesellschaft mbH i. L., Munich4 100.0000 MEAG RealReturn Inhaber-Anteile A, Munich4 47.5162 MEAG Short-Term High Yield, Munich4 100.0000 MEAG Vermögensanlage Komfort, Munich4 49.2109 MEAG Vermögensanlage Return (A+I Tranche), Munich4 72.7201 Mediastream Consulting GmbH, Grünwald 100.0000 Mediastream Dritte Film GmbH i. L., Grünwald 100.0000 Mediastream Film GmbH, Grünwald 100.0000 Mediastream Zweite Film GmbH, Grünwald 100.0000 MedNet Bahrain W.L.L., Manama 100.0000 MedNet Egypt LLC, Cairo 100.0000 MedNet Europa GmbH, Munich 100.0000 MedNet Global Healthcare Solutions LLC, Dubai 100.0000 MedNet Greece S.A., Athens 78.1419 MedNet International Ltd., Nicosia 100.0000 Mednet Jordan Co. W.L.L., Amman 100.0000 MedNet Saudi Arabia LLC, Riyadh 100.0000 MedNet UAE FZ LLC, Dubai 100.0000 MEGA 4 Management GmbH i. L., Düsseldorf 100.0000 MEGA 4 Treuhand GmbH, Düsseldorf 100.0000 miCura Pflegedienste Berlin GmbH, Berlin 100.0000 miCura Pflegedienste Bremen GmbH, Bremen 100.0000
Zacobu 110011 S.L., Valencia 100.0000 Zacuba 6006 S.L., Valencia 100.0000 Zacubacon 150015 S.L., Valencia 100.0000 Zafacesbe 120012 S.L., Valencia 100.0000 Zapacubi 8008 S.L., Valencia 100.0000 Zarzucolumbu 100010 S.L., Valencia 100.0000 Zetaza 4004 S.L., Valencia 100.0000 Zicobucar 140014 S.L., Valencia 100.0000 Zucaelo 130013 S.L., Valencia 100.0000 Zucampobi 3003 S.L., Valencia 100.0000 Zucarrobiso 2002 S.L., Valencia 100.0000 Zucobaco 7007 S.L., Valencia 100.0000 Zulazor 3003 S.L., Valencia 100.0000 Zumbicobi 5005 S.L., Valencia 100.0000 Zumcasba 1001 S.L., Valencia 100.0000 Zuncabu 4004 S.L., Valencia 100.0000 Zuncolubo 9009 S.L., Valencia 100.0000
Associates and joint ventures accounted for at fair value “PORT ELISABETH” GmbH & Co. KG, Bramstedt 31.9660 “PORT LOUIS” GmbH & Co. KG, Bramstedt 26.0495 “REISEGARANT” Gesellschaft für die Vermittlung von Insolvenzversicherungen mbH, Hamburg 24.0000 Agricultural Management Services S.r.l., Verona 33.3333 Allianz Pegasus Fonds, Frankfurt am Main 46.0000 Assistance Partner GmbH & Co. KG, Munich 21.6600 Augury Inc., Wilmington, Delaware5 12.7500 carexpert Kfz-Sachverständigen GmbH, Walluf 25.0000 Energie Kapital GmbH & Co. Solarfonds 2 KG, Düsseldorf 34.4234 Fernkälte Geschäftsstadt Nord Gesellschaft bürgerlichen Rechts, Hamburg 37.1275 Finsure Investments (Private) Limited, Harare 24.5000 GIG City Nord GmbH, Hamburg 20.0000 Hartford Research LLC, Lewes, Delaware 41.7500 IK Objektgesellschaft Frankfurt Theodor-Heuss-Allee GmbH & Co. KG, Düsseldorf 47.4000 LCM Logistic Center Management GmbH, Hamburg 50.0000 MCAF Management GmbH i. L., Düsseldorf 50.0000 Neos Ventures Limited, London5 9.4700 PERILS AG, Zurich5 10.0000 POOL Sp. z o.o., Warsaw 33.7500 Relayr Inc., Wilmington, Delaware5 14.7800 Residential Builders Underwriting Agency Pty Ltd, Sydney 20.0000 Rural Affinity Insurance Agency Pty Ltd, Sydney 50.0000 Sekundi CVBA, Brussels 33.3333 SIP Social Impact Partners GmbH, Munich 50.0000 Super Home Inc., Wilmington, Delaware5 16.8200 Teko – Technisches Kontor für Versicherungen Gesellschaft mit beschränkter Haftung, Düsseldorf 30.0000 vers.diagnose GmbH, Hanover 49.0000 Verwaltungsgesellschaft “PORT ELISABETH” mbH, Bramstedt 50.0000 Verwaltungsgesellschaft “PORT KELANG” mbH, Bramstedt 50.0000 Verwaltungsgesellschaft “PORT LOUIS” mbH, Bramstedt 50.0000 Verwaltungsgesellschaft “PORT MAUBERT” mbH, Bramstedt 50.0000
T&R GP Management GmbH, Bonn (equity: €25k; result for year: –€2k) 10.0020 T&R MLP GmbH, Bonn (equity: €25k; result for year: –€3k) 10.0020 T&R Real Estate GmbH, Bonn (equity: €140,841k; result for year: –€26k) 10.0020 Trov Inc., Dover, Delaware (equity: €36,548k; result for year: €---) 4.7200 Umspannwerk Hellberge GmbH & Co. KG, Treuenbrietzen (equity: –€2,043k; result for year: –€135k) 6.9000 welivit TOP SOLAR GmbH & Co. KG, Düsseldorf (equity: €75k; result for year: €41k) 0.0000 1 Not currently utilised.
3 This fully consolidated German subsidiary intends to fulfil the conditions required in Section 264(3) of the German Commercial Code (HGB) and, in the 2017 financial year, to avail itself of the relevant provision exempting it from preparing annual financial statements.
6 No significant influence, as there are no close links with Munich Re of the kind defined in IAS 28.6.
(equity: €41,667k; result for year: €4,896k) 31.9361 Hancock Timberland XII LP, Wilmington, Delaware (equity: €214,136k; result for year: €11,540k) 15.1500 Helium Systems Inc., Dover, Delaware12
Key Audit Matters in the Audit of the Consolidated Financial Statements Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements for the financial year from 1 January to 31 December 2017. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.
The financial statement risk The provision for outstanding claims at the reporting date was €45,004m in the property-casualty reinsurance segment and €4,483m in the property-casualty German primary insurance segment. In the ERGO International segment, a major part of the provision for outstanding claims of €2,849m refers to property-casualty business. Major losses from natural catastrophes had an impact of €3,678m on the year, of which €2,744m resulted from Hurricanes Harvey, Irma and Maria.
Opinions We have audited the consolidated financial statements of Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München, Munich, and its subsidiaries (the Group), which comprise the consolidated balance sheet as at 31 December 2017, and the consolidated income statement, the statement of recognised income and expense, Group statement of changes in equity and consolidated cash flow statement for the financial year from 1 January to 31 December 2017, and notes to the consolidated financial statements, including a summary of significant accounting policies. In addition, we have audited the combined management report at Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München, Munich, for the financial year from 1 January to 31 December 2017.
− the accompanying consolidated financial statements comply, in all material respects, with the IFRSs as adopted by the EU, and the additional requirements of German commercial law pursuant to Section 315e(1) of the German Commercial Code [Handelsgesetzbuch: HGB] and, in compliance with these requirements, give a true and fair view of the assets, liabilities, and financial position of the Group as of 31 December 2017, and of its financial performance for the financial year from 1 January to 31 December 2017, and
− We assessed the actual development of the provision for outstanding claims set for the previous year on the basis of run-off results in order to draw a conclusion about the reliability of the estimates.
− We assessed whether the disclosures in the notes, particularly the run-off triangles, were correctly derived from the accounting system and evaluated them for completeness.
Our observations The valuation process for the provision for outstanding claims in property-casualty business is appropriate, and the valuation assumptions, including those for major losses, are reasonable and balanced. In the segments that we audited, the provisions set aside fall within the range we calculated independently. The explanatory notes and disclosures in the notes to the consolidated financial statements are complete and appropriate.
Valuation of provision for future policy benefits, provision for outstanding claims, and deferred acquisition costs in life and health
With respect to the accounting policies, we refer to explanations in the notes to the consolidated financial statements on pages 112–113, and to the explanations about the use of estimates and assumptions on page 99. Further information about the line items in the financial statements can be found on pages 137 and 145. Risk information can be found on pages 159–161 of the notes to the financial statements, and on page 71–72 of the combined management report.
The notes to the financial statements must include extensive information about the provision for outstanding claims, including run-off triangles in particular.
− Substantive audit procedures on major losses were mainly made on the basis of selected specific items, whereby we drew concludsions about the appropriateness of key assumptions used on the basis of available external information.
− With respect to losses from the hurricanes Harvey, Irma and Maria, we audited the assumptions of losses on the basis of inquiries and inspections of documents and – where possible – compared these with available external information. We also inspected selected claims notifications in the affected units and assessed whether these matched up to the Company’s estimates.
Valuation of the provision for future policy benefits is necessarily dependent on a number of assumptions. These refer in particular to discount rates, mortality and morbidity assumptions, acquisition and administration expenses, and calculated lapse rates. In accordance with applicable accounting regulations, these assumptions are determined at the start of a contract and are only adjusted if there is a significant deterioration. As the assumptions are generally not observable in the market, the determination or adjustment of these assumptions are subject to uncertainty and judgement.
Deferred acquisition costs are amortised over the duration of the contracts. Depending on the type of contract, this is made proportionally to the premium or proportionally to the expected gross profit margins.
− We assessed the appropriateness of key assumptions by analysing the actuarial methods used to derive those assumptions. We placed particular emphasis on the reasonable and standard compliant use of discount rates.
Our observations The valuation method used for the provision for future policy benefits, the provision for outstanding claims, and deferred acquisition costs in life and health is appropriate. Valuation assumptions are adequate and balanced. The explanatory notes and disclosures in the notes to the consolidated financial statements are complete and appropriate.
The financial statement risk The carrying amount of total investments was €217,562m, and the fair value was €243,309m.
The valuation of investments whose fair values are determined on the basis of valuation models or values assessed by third parties is subject to uncertainty. Measurement carried out on the basis of valuation methods that use inputs observable in the market particularly affects non-listed securities, infrastructure loans, other loans and derivatives. The greater the number of input factors used that are not observable in the market but are based on internal estimates, the greater the scope for judgement. Judgement is especially necessary in measuring land and buildings, real estate funds, private equity funds, and investments in affiliated companies and associates. The fair value of investments determined on the basis of valuation models or values assessed by third parties is allocated to valuation categories level 2 and level 3 of the fair value hierarchy of IFRS 13.
− On the basis of the fair values determined by the Company, we have ascertained that the subsequent accounting measurement and the impact on profit or loss are correct. In this context, we have assessed whether write-ups and write-downs were appropriate and whether the result from the fair value measurement and disposals of derivatives was appropriately determined.
Responsibilities of Management and the Supervisory Board for the Consolidated Financial Statements and the Combined Management Report Management is responsible for the preparation of the consolidated financial statements that comply, in all material respects, with IFRSs as adopted by the EU and the additional requirements of German commercial law pursuant to Section 315e(1) HGB and that the consolidated financial statements, in compliance with these requirements, give a true and fair view of the assets, liabilities, financial position, and financial performance of the Group. In addition, management is responsible for such internal control as they have determined necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern. They also have the responsibility for disclosing, as applicable, matters related to going concern. In addition, they are responsible for financial reporting based on the going concern basis of accounting unless there is an intention to liquidate the Group or to cease operations, or there is no realistic alternative but to do so.
Furthermore, management is responsible for the preparation of the combined management report that, as a whole, provides an appropriate view of the Group’s position and is, in all material respects, consistent with the consolidated financial statements, complies with German legal requirements, and appropriately presents the opportunities and risks of future development. In addition, management is responsible for such arrangements and measures (systems) as they have considered necessary to enable the preparation of a combined management report that is in accordance with the applicable German legal requirements, and to be able to provide sufficient appropriate evidence for the assertions in the combined management report.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements and of the Combined Management Report Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and whether the combined management report as a whole provides an appropriate view of the Group’s position and, in all material respects, is consistent with the consolidated financial statements and the knowledge obtained in the audit, complies with the German legal requirements and appropriately presents the opportunities and risks of future development, as well as to issue an auditor’s report that includes our opinions on the consolidated financial statements and on the combined management report.
We exercise professional judgement and maintain professional scepticism throughout the audit. We also: − Identify and assess the risks of material misstatement of the consolidated financial statements and of the combined management report, whether due to fraud or error, design and perform audit procedures responsive
Independent auditor’s report to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
− Obtain an understanding of internal control relevant to the audit of the consolidated financial statements and of arrangements and measures (systems) relevant to the audit of the combined management report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of these systems.
− Perform audit procedures on the prospective information presented by management in the combined management report. On the basis of sufficient appropriate audit evidence we evaluate, in particular, the significant assumptions used by management as a basis for the prospective information, and evaluate the proper derivation of the prospective information from these assumptions. We do not express a separate opinion on the prospective information and on the assumptions used as a basis. There is a substantial unavoidable risk that future events will differ materially from the prospective information.
Dr. Ellenbürger Voß Wirtschaftsprüfer Wirtschaftsprüferin (German Public Auditor) (German Public Auditor)
© 2018 Münchener Rückversicherungs-Gesellschaft Königinstrasse 107 80802 München Germany www.munichre.com www.twitter.com/munichre www.munichre.com/facebook
Editorial deadline: 1 March 2018 Online publication date: 15 March 2018 Print publication date: 3 April 2018
Printed by Gotteswinter und Aumaier GmbH Joseph-Dollinger-Bogen 22 80807 München Germany
Balance sheet Investments (incl. insurance-related investments) €m 227,226 227,118 227,402 232,340
Munich Reinsurance Company’s market capitalisation €bn 28.0 28.0 27.4 29.5 Other Combined ratio
Thereof: Income from associates accounted for using the equity method 145 55 29 24 37 9. Other operating expenses –924 –258 –218 –213 –234 10. Deduction of income from technical interest –6,376 –1,634 –1,331 –1,442 –1,969 13. Other non-operating result –926 –266 –243 –264 –153 14. Impairment losses on goodwill –9 –4 –6 0 0 15. Net finance costs –211 –52 –53 –52 –54 16. Taxes on income 298 –4 597 –108 –188
Thereof: Attributable to Munich Reinsurance Company equity holders 375 530 –1,438 729 554 Attributable to non-controlling interests 17 8 2 3 4