Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (ETR:MUV2)

Earnings Call: Q4 2025

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Feb 26, 2026

Good morning, ladies and gentlemen. Good afternoon even to those of you who have joined us from Asia today. Welcome to Munich Re's media conference, in which we will focus on the results of the 2025 financial year. Thank you for joining us and for spending the next 90 minutes or so with us. This event is being broadcast live on munichre.com. A recording will be available there later today. You can find both the media release and the presentation on our website. I'm joined here today by our Chief Executive Officer, Christoph Jurecka, and by the group's Chief Financial Officer, Andrew Buchanan. This morning, we announced another record year, exceeding our annual target for a fifth time in a row. Mr. Jurecka will describe the major building blocks which explain how we got there. He will also give an insight into the Property and Casualty reinsurance renewals from the 1st of January. He will explain how the foundation we have built will support our plans for the current financial year. Andrew Buchanan will continue to explain our financial results and our financial position in more detail. At the end of these presentations, we will have sufficient time for your questions. You will have the ability to ask your questions by video or in writing. I will explain the process in more detail when we get there. With that, I would like to hand it over to Christoph. Christoph, please. Thank you very much, Roman. Good morning also from my side. Let me briefly recap our Ambition 2025, which we concluded last year. It has been a great success, marked by strong progress year after year. We have surpassed every single financial and non-financial target and thereby created substantial value for all of our stakeholders. Over the 5-year period, we more than doubled our net earnings. We also significantly increased our return on equity to 18.3%, which is an exceptional result compared with industry peers and clearly above our cost of capital. This success was primarily driven by disciplined underwriting and active investment management based on our strong client orientation and the excellent capabilities of our employees and our business partner worldwide. Our shareholders participated in this success to a significant extent. Dividend per share growth was even higher than the increase in earnings per share. Ultimately, both metrics grew at nearly 4 times the pledged 5% per year. What's more, we remain very comfortably capitalized, despite materially increased capital returns. This gives us considerable strategic flexibility as we embark on our new multi-year ambition, Ambition 2030. In short, Ambition 2025 successfully accomplished, and we over-delivered on all our targets, also by concluding another record year for Munich Re. Thanks to a strong operating performance across all segments and a pleasing investment return, we exceeded our profit target for the fifth consecutive year. Net earnings increased by almost 8% to EUR 6.1 billion, and our result would have been even higher had we not deliberately strengthened our balance sheet and future earnings power. We could implement these measures without compromising our financial targets, enhancing our resilience in an environment shaped by geopolitical tensions, by capital market volatility, and by continuously increasing insurance risks. At the same time, we want our shareholders to once more participate in our strong financial performance. We have decided to increase the dividend per share substantially again by another 20% to EUR 24. Additionally, we continue with share buybacks, also on a larger scale of EUR 2.25 billion until the AGM next year. Altogether, we will return almost 90% of our earnings, very much in line with our commitment for our Ambition 2030. This strong capital return is well supported by earnings contributions from beyond the more cyclical P&C reinsurance segment. While this P&C reinsurance segment remains our largest earnings contributor, the combined contribution from Global Specialty Insurance, from Life Reinsurance, and from ERGO is nearly as significant and covers the dividend to a large extent. Our highly diversified business model is paying off. On slide six, a bit more on our earnings profile. Our combination of a global reinsurer and a primary insurer at scale gives us a competitive edge in maintaining a high profitability throughout the cycle in P&C reinsurance. Before I delve into the specifics of the individual segments, allow me to provide you with a high-level overview of these segments. Global Specialty Insurance has been growing for quite a while. We focus on structuring the portfolio in such a way that it generates robust and increasing returns in attractive specialty markets in the United States and increasingly also worldwide. Life Reinsurance has delivered a strong earnings trajectory over the past years. A well-performing in-force book, free of legacy issues, and strong new business growth have been the key drivers. ERGO continues to deliver like a clockwork. With a rising earnings share from international operations, the business is becoming more diversified. Taking these segments together makes us less dependent on the P&C Reinsurance cycle. P&C Reinsurance, on the other hand, continues to be the strong backbone of Munich Re Group. The rising contribution from our non-P&C Reinsurance segments allows us to manage the cycle with discipline and achieve still attractive profitability levels. This brings me to the general, January renewals, which had a good outcome given price competition. Despite abundant capacity in the market, the discipline regarding terms and conditions was steadfast. The high quality of our portfolio was maintained with largely unchanged terms and conditions, as well as also the structures. The main battleground in this renewal was on pricing, reflected in a price decline in our portfolio of 2.5%, still within the range of our expectations. As always, this price change is fully risk-adjusted, which means that conservative inflation and other loss trend assumptions, as well as model changes, are fully taken into account. Either way, coming off very high levels, the margins remain healthy. Consistent with our underwriting DNA, we were prepared to walk away from business which failed to meet our risk return requirements. Selective growth in certain casualty markets and in credit business offset this only partially. Overall, we actively reduced our renewed treaty volume by nearly 8%, with around three-quarters of the decline driven by proportional business, which has limited impact on the bottom line. Now, looking at the individual lines of business. The bubble chart on this page illustrates our consistent approach: protecting the technical profitability and the pricing adequacy by giving up business where necessary. Rigorous underwriting and strict portfolio management remain essential to safeguarding attractive profitability in our portfolio. After several years of steady rate increases, the pressure was greatest in Property XL, primarily in nat cat. Prices declined by 6% in that business, yet the margins remain attractive, similar to levels seen three or four years ago. Still, to maintain high returns, we gave up a meaningful amount of business. Proportional business showed a more mixed picture. We reduced positions that no longer met our criteria, while we selectively expanded in areas such as casualty in Europe and Latin America. Let's turn to the individual segments, and let's start with Global Specialty Insurance on this slide. Bringing our specialty insurance operations under one roof is paying off, increasingly recognized also by clients and by brokers. GSI benefits from a large, diversified portfolio across specialty lines, and while it is still U.S.-focused, further international expansion will enhance the diversification. As regards bottom line, GSI achieved an excellent performance in 2025. To some extent, this was supported by below-average major losses, but even more so, it was the result of a very strong underlying performance of all business units, while strictly adhering to our prudent reserving practices. Building on this success, we continue to emphasize on underwriting and claims excellence, which is the basis to effectively manage the different cycles in specialty markets and also manage the P&L volatility in the portfolio. At the same time, maintaining cost rigor remains an important lever to deliver the combined ratio targets. GSI has grown by roughly 10% annually in recent years. In 2025, growth continued, but was dampened by a weak US dollar. Looking ahead, I expect a compound annual growth rate of 5%-9%, while always prioritizing profitability and underwriting discipline. Turning to Life Re on slide 10, and Life and Health Re has reached significantly higher earnings compared to the start of Ambition 2025. The strong new business momentum also continues to support the CSM, so the contractual service margin, which is a measure for the value of the in-force book we have. This CSM now stands at above EUR 15 billion, despite adverse currency effects, which is an impressive increase of roughly 40% since its introduction in the year 2022. With around 7% released to earnings annually, this creates a predictable income stream for many years to come. More recently, significant tailwind came from large transactions. The global Life and Health reinsurance market is rapidly transforming, expanding from traditional biometric reinsurance into transactional business. Since 2022, large transactions have pushed new business CSM and operating changes by more than EUR 3 billion. We are anticipating a healthy pipeline going forward. In addition, a significant share of the positive development came from Fin Re business, or financially motivated reinsurance business. Additionally, we also see very good opportunities to expand our longevity business in the course of Ambition 2030. This year, we expect the total technical result to increase by more than 10% to EUR 1.9 billion. I would like to conclude my remarks on the segments with ERGO. ERGO overall, once again, met its guidance with strong net earnings. On this slide 11, I start with the German business. The German business continues to deliver profitable growth. Adjusted for the one-off impact of the German corporate income tax reform, also, the earnings improved. In PNC, the top-line momentum paused as ERGO prioritized technical performance improvements. Among other measures, one focus was on improving the profitability of the motor business, and these efforts are reflected in a strong combined ratio of 89%. Life and Health also performed well, supported by top-rated products. Technical profitability improved, while the run-off of the life book and the migration to the new platform continue as planned. ERGO's international business is growing faster than its German operations, with dynamic improvements in both the revenue as well as earnings, organically and through acquisitions. The segment now accounts for 30% of revenue, and this share continues to rise. With the acquisition of NEXT Insurance, ERGO expanded its international footprint to the world's largest insurance market, the United States. Entering the U.S. small and medium enterprises market provides very attractive growth opportunities, while at the same time giving us access to purely digital business models and underwriting processes. The unit is developing exactly as expected, both financially as well as operationally. Despite the strong expansion, we maintained an attractive combined ratio in ERGO International. Altogether, ERGO's domestic and international developments give me a great confidence in its contributions towards Ambition 2030, always based on technical excellence and on rigorous cost control. Slide 13 covers the investment result. Beyond insurance business, also, the capital markets continue to provide tailwinds to our results. The investment income is gradually rising as we reinvest at attractive yields. Additionally, we aim to unlock earnings potential through active investment management. We closely monitor financial markets to capture short-term opportunities. In 2025, we deliberately accepted EUR 0.8 billion in disposal losses in the reinsurance fixed income portfolio to shift capital into higher-yielding assets. We also captured opportunities in commodities and in global equities. Over the longer term, we continue to build exposure to alternative investments to earn illiquidity and complexity premium. Our ambition is to meaningfully increase the contribution from active management to our return on investment, in 2025, this approach once again paid off, adding more than 30 basis points to the group ROI. Importantly, we do not intend to materially increase our risk appetite going forward. On slide 14, I'll talk a bit about capital repatriation. When we presented Ambition 2030, we emphasized that capital repatriation is a key lever in managing capital efficiently and to support our return on equity targets. In this respect, dividend growth is particularly close to our hearts. Over the past 5 years, our dividend per share has more than doubled, and Munich Re has not cut its dividend in over 50 years, even during crises. Following a more than 30% dividend increase for 2024, we now propose a further 20% increase for 2025. Thus, the dividend increase again surpasses earnings growth, underscoring our confidence in the sustainability of our earnings and future dividend potential. This confidence is strengthened by the high share of earnings coming from less volatile and less cyclical segments. We also continue to use share buybacks as a flexible capital management tool. Following last year's increase, we are again raising the amount to EUR 2.25 billion. On slide 15, a few words on the non-financial targets. We have also exceeded our Ambition 2025 in the non-financial target space. We have set clear targets, as you know, in all these dimensions, and have a roadmap for reducing our greenhouse gases and outperformed in all three core areas, which are investments, insurance, and own operations. Our climate strategy is effectively yielding results. The same applies to our social targets. We're committed to achieving 40% of women in leadership positions across the Munich Re Group by 2025, and we reached 40.5%. Building on this success with Ambition 2030, Munich Re remains committed to even further reducing greenhouse gas emissions, in line with our long-term aim of achieving a net zero by 2050. We will also remain fully committed to striving for balanced teams across all aspects of difference globally, reflecting the diversity of the clients and communities we are working with and for. To conclude, we confirm the financial targets for 2026 presented at our Capital Market Day last December. With projected net income of EUR 6.3 billion, we are again on track for another record result. In line with our strategy, the expected earning increase will be driven by the less cyclical segments: Life and Health reinsurance, Global Specialty Insurance and AGOR, and the investments. While we expect a more muted development in P&C Reinsurance, given the competitive market environment. My last slide reminds all of us on our financial targets for Ambition 2030, and 2026 is shaping up to be a strong start into that Ambition 2030. Our Solvency II ratio remains well above 200%. We clearly delivered a payout ratio of above 80%. Net income growth, coupled with increased share buybacks, should support an earnings per share CAGR of more than 8%, we enter the new ambition period with an expected return on equity of above 18%. With that, I hand over to Andrew, who will lead you through the financials in more detail. Thank you very much, Christoph, and good morning to you all, also from me. Indeed, 2025 was another very successful year for Munich Re, as you will see on the first slide that I have to present in my section. Starting at the top left, strong financial performance across all lines of business led to net earnings of EUR 6.1 billion, slightly above our EUR 6 billion target, as has already been mentioned. In short, a low major loss burden was roughly offset by significant currency losses, while pressure from a lower-than-planned top line was compensated for by higher investment income. Overall, the result was firmly supported by strong underlying performance across all business segments. I'm also particularly pleased by the quality of the result. As already indicated back at our Q3 earnings release last year, we used the stronger-than-expected financial performance opportunistically to strengthen the balance sheet in Q4, supporting a steadily rising and more stable earnings trajectory. In line with this long-term steering approach, we deliberately realized disposal losses in our fixed income portfolio to support the running yield and further enhanced our claims reserve prudence, placing us on an even more cautious level. From an economic perspective, our Solvency II ratio increased further to almost 300%, driven by strong operating performance, reflecting new business growth in life reinsurance and also lower capital requirements. At this strong level, we could comfortably afford to increase the dividend sustainably or substantially in the way that Christoph described a few minutes ago. We also chose to implement a new higher buyback program for 2026 and 2027. Before moving to the full year view, let's briefly look at the Q4 isolated result on my next slide. In light of the balance sheet strengthening measures, which also contributed to slightly lower ERGO earnings, by the way, we expected Q4 to fall short of the exceptionally high earnings of the previous 2 quarters. This was already implied by the Q3 guidance update for the full year being maintained at the EUR 6 billion level for the group. Against this backdrop, net earnings of around EUR 0.9 billion again benefited from strong operational performance across the group. In P&C Reinsurance, underlying profitability remained strong despite a higher headline combined ratio of 85.3%. The underlying movements merit closer examination. As part of our customary annual reserve review, we reassessed all of our reserves bottom up. While our actual versus expected analysis once more confirmed a very favorable overall reserving trend, we used the strong financial performance and the benefit of lower large losses to further reinforce reserve prudence. This affected three key components of the combined ratio. Number one was additional prudence in new business. We booked the new business in contract year 2025 at the very upper end of the best estimate range, which overall added roughly 1 percentage point above the usual level of prudence. This fully explains the elevated normalized combined ratio of 83.6 in Q4 and the full year figure of 80.1%, which is a bit above the guidance of 79% that may have been expected. Number two was lower reserve releases, and here I'm referring to releases for prior accident years. Our cautious response had a similar magnitude of impact as for new business, resulting in lower than planned reserve releases of 1.8% in Q4 and 5.0% for the full year, instead of the approximately 6% that we usually expect. The third component I would like to mention is higher man-made losses in the outlier category. These clearly exceeded expectations in Q4 as we proactively addressed reserve uncertainties in several long-tail casualty lines. This caused also an increase in the discount rate to 13% in the quarter, which is above the typical level of 4%, above the typical level by 4%, apologies, in the quarter standalone, and about 1% above the typical level for the full year. Those percentages, as always, are expressed in terms of combined ratio points. Global Specialty Insurance likewise benefited from a quiet major loss Q4, producing a better-than-expected combined ratio of 86.4%. The full year combined ratio, the 85.9%, outperformed expectations as well, about 1%, 1% better than the revised outlook of 87% that we issued at Q3. Life & Health Reinsurance delivered a positive Q4 performance, meeting the full-year guidance for the total technical result, which is the most important KPI we tend to look at for Life & Health Reinsurance. Biometric experience was favorable, and both CSM release and the result from insurance-related financial instruments developed as expected. Turning briefly to ERGO, as mentioned, we used the favorable claims development at ERGO Germany to strengthen reserve prudency. Overall, the combined ratio in Q4 and the full year met guidance. In the international business, the combined ratio was slightly elevated as the pleasing development in major European markets was counteracted by higher claims in legal protection business and in Thailand, as well as the combined ratio of NEXT Insurance reflected in our numbers for the first time. Temporarily higher project costs in several entities and costs for M&A activities impacted the net result. Coming back to the group level now and the investment result. Overall, we delivered a solid return on investment of 2.8% in the last quarter. We once more incurred disposal losses, approximately EUR 0.8 billion across the three reinsurance segments to support future regular income, we benefited from almost the same amount in fair value gains, which were mostly booked in the PNC Reinsurance segment. The same pattern is reflected at full year level. Positive fair value changes from supportive capital markets were offset by deliberate disposal losses. The full year investment return of 3.2% was pleasing relative to our guidance of at least 3%. At year end 2025, the reinvestment yield declined to 3.8% due to reinvestment into shorter maturities at lower yields. Before turning to the 2025 full year financial development of the two business fields in more detail, first, allow me a few more remarks on the top line. We missed our insurance revenue guidance for the group of initially EUR 64 billion by EUR 3 billion. To a large extent, this was driven by technical factors like currency effects, especially the weakening of the US dollar and premium adjustments, including changes in the so-called NDIC or NDIC calculation, which I remind you, does not affect the bottom line. It was also the result of active portfolio management decisions, deliberately giving up business no longer meeting our return requirements. These effects were almost exclusively limited to PNC Reinsurance. Thanks to our strong underlying profitability in all segments, we were able to fully mitigate the top-line pressure and over-deliver on our net income target. Let's take a closer look at the full year financials, starting with ERGO, where both segments contributed to the strong bottom line performance and successfully achieved all of their financial goals. In Germany, the increase in insurance revenue was largely driven by the life and health business, where technical profitability improved thanks to strong contributions from the short-term health and travel business. In PNC, the combined ratio remained at last year's very good level as a benign major loss development, together with an improved cost development, was used to increase reserve prudence. In contrast, net profit decreased due to a significant one-off item related to the future reduction of the corporate income tax rate in Germany. On an adjusted basis, removing that special effect, the net result increased year-on-year. At ERGO International, we experienced substantial growth driven by organic expansion, particularly in Poland, Belgium, and Thailand, complemented by the first-time consolidation of NEXT Insurance and Norway Health. Profitable growth, coupled with a higher CSM release, along with favorable claims experience, resulted in a strong technical performance in major markets. The combined ratio improved by almost 2 percentage points. The net result in ERGO International benefited from a significant positive one-off effect related to the first-time consolidation of NEXT Insurance. Let's move on to reinsurance. Life & Health Reinsurance met its guidance with a total technical result of EUR 1.7 billion. Performance was strong overall, with releases of the CSM and the risk adjustment in line with expectations and very healthy new business generation. Finmo Re business also developed very positively. Experience variances were volatile throughout the year, slightly negative overall, but within the range of normal expectations. At GSI, underlying growth was unfortunately held back by the weakening US dollar, the segment benefited from low major losses and solid reserve releases, resulting in an excellent combined ratio of 85.9%. With around EUR 560 million in net income, GSI contributed meaningfully to the group result. In PNC Reinsurance, the headline combined ratio improved to an all-time low of 73.5%, supported by very benign major losses. Adjusted for additional prudence, the normalized combined ratio was fully in line with the original expectation of 79%, as mentioned. This brings me to the topic of reserving. Our reserving position remains very comfortable. High reserve releases were possible, despite a cautious reaction to loss trends, in particular, US liability business, where social inflation remains elevated. Overall, the outcome of the reserve review was again positive. The actual versus expected analysis has now shown consistently favorable indications for 14 consecutive years. Property was the largest source of releases, where the favorable market environment was felt most strongly in the recent contract years. Casualty overall, we acted cautiously despite favorable indications. Our strong reserving position would, of course, have allowed us a higher release for prior years, perhaps the 6% in PNC insurance that we would often see. As mentioned, we decided to use the overall strong financial performance in 2025 to reinforce our prudency, resulting in a slightly lower release of 5%. Turning now to the economic disclosure, capital generation on the Solvency II basis was strong, and our solvency ratio remained at a very comfortable level of 298%, driven by strong operating performance and lower required capital. This ratio already fully reflects the proposed dividend for financial year 2025, while the deduction of the proposed share buyback program will follow in Q1. Our resilience remains very high, as you can see with the sensitivities on the right-hand side of the slide. Even after significant stress events, we would remain far above our target capitalization level. The well-balanced risk profile and the strong Solvency II position gives us significant strategic flexibility to continue developing the group, while continuing the disciplined repatriation of earnings. Concluding with our third capital metric, HGB or German GAAP, the improved EUR 5.5 billion result reflects the strong business performance described earlier. It does also reflect some positive one-off effects from the release of equalization provision and currency movements. More important than the result in any one year is the stock of distributable earnings, which at more than EUR 10 billion, provides a very robust starting point for continued attractive capital returns. With these final remarks, Christoph and I look forward to your questions. First, I will hand back to Roman. Thank you very much, both, Andrew and Christoph, for your very detailed explanations. Seems like good news all around. We now have a good 45 minutes left for your questions. Your questions may be asked in either German or English, they will be translated into the other language, as will be the answers. If you would like to submit your question in writing, please use the Q&A functions in your team's toolbar. You will find the Q&A function next to the chat function. The chat function itself is disabled for this conference. For video questions, kindly raise your hand virtually. I will then call on you by name, at that point, I would ask you to please switch on your camera and your microphone. Let's begin with the first question, I can already see one by Mr. Huebner. Mr. Huebner, please. I have no camera available at the moment because of the wobbly connection. One question for understanding on the outlook of 2026. I don't see any concrete outlook for the Global Specialty Insurance business as the reinsurance business and ERGO already sum up to the EUR 6.3 billion that you're expecting. Can you elaborate a bit on this? Hello, do you hear me We can hear you. Hello? Mr. Huebner, we can hear you. Hello. We can hear you very well. Okay. Yeah, this, in fact, was my question already. Herr Huebner, good morning, and good to hear you. I think I can very easily answer that question. If the definition of our business fields, in the definition of our business fields, GSI is part of the reinsurance business field. If you look at the outlook number, which has reinsurance in the top line, the net result guidance of EUR 5.4 billion, that number would include also Global Specialty Insurance. Is this a reversal of that split that you did to form a Global Specialty Insurance as a separate business? No, not at all. We have two levels. If you look at this, how we split our earnings overall, we first split it into what we call the Reinsurance business field and the ERGO business field. On the second level, we split reinsurance out into Life and Health reinsurance, into Property and Casualty reinsurance, and into Global Specialty Insurance. We split ERGO into ERGO Germany and ERGO International. It's five segments, two business fields, and one group result. What you can see on the slide is that, for example, for the combined ratio, we decided to have an individual target for GSI. There, there you see a 90% target for GSI. While on the net result level, we didn't want to have our targets too detailed, and therefore, on the net result level, there is one target for the reinsurance and specialty business together. Okay. Thank you. The next question will be from the German stream, Frau Krieger, bitte. Hello, guten morgen. Yes, hello, and good morning. I'm going to ask my question in German. Reinsurance 2026, result EUR 5.4 billion is shown. Where does this come from? You know, prices, volumes, also in property and casualty insurance. You know, here, the results are going down. You know, we can hope that the activities will reach a normal level like in the past. Well, Mrs. Krieger, good morning. I try to answer this question. Now, it's a bit more technical. I'd like to ask Andrew to give more of the technical details. Let me start with the strategy. You know, the target, EUR 5.4 billion, this is what we just mentioned. This is the target of the business field reinsurance, and in addition to Property Casualty, this also includes health, life, and health, and it also includes Global Specialty Insurance. We start, and I believe we showed you this, in all of these segments, in all of these business fields, we start from a position of strength. This means we come from a very good level. Now, with the renewals, and this is what we've shown, the margins in Property Casualty are going down slightly. Therefore, the contribution of Property Casualty will be a bit more muted than in the past. This is the good thing about our business model. We've got four pillars, Property Casualty, Life, Health, and, you know, we've got these four pillars, and therefore, we've got this privileged situation that the declines, which we have in the classical Property Casualty insurance, we can overcompensate them, say, in Life and Health at ERGO and Global Specialty Insurance. This means all in all, the result is growth. Here you are right, this is not based on Property and Casualty reinsurance alone. No, it covers the entire spectrum of our business model. Yes, thank you. Just one more question, completely different issue. ERGO migration of contracts to the new platform, how much progress have you made so far? Well, I mentioned it in the beginning. All this is going according to plan. I touched on it in my brief presentation, I should say that we are really making progress, but it is a very complex and long-term project. Having said that, I can say things are really, you know, moving forward. What I can say is that the technical platform and the architecture and infrastructure have been set up completely, and any components related to collective bargaining are being worked in, and of course, the migration to the new platform is just going on at present. 1 million contracts have been migrated successfully already, and they are being administered on the new platform already. As I said, it's a long-term process. It lasts for quite some time, and we talk about large portfolios in this respect. Okay, Frau Krieger, we now change back to the English channel, to Ben Dyson from S&P Global. Ben, please. Hi, yeah, good morning. I just had a question on PNC Re and the reserving prudency that you're building in there. I just wondered if you could give an idea of the actual quantum of that and, you know, what it's for. I know some of that's for U.S. casualty business. Actually, the reason I'm asking is that it seems like it's coming from two places or so showing up in two places. One of that is a lower reserve release, and the other is higher man-made catastrophes. Higher man-made losses, sorry. The second sort of point relates to that is just, would you, well, given that the... You're reporting higher man-made loss ratio, is how much of that is down to prudency, and how is there also any indication that there are an elevated level of man-made losses? If you could say what those are, please, that would be, that'd be really helpful. Thank you. Maybe I take that one. Good morning, Ben. It's Andrew Buchanan here. You asked about reserve prudency, and I would actually invite you to split it into 3 buckets, I think, rather than 2. The first thing I would say to you is look at the reserve releases of basic losses for prior accident years. That's where we released the 5%, where usually we would expect, and we would guide towards a number of around 6%. You know, in the calculation of the normalized combined ratio, we usually use the 6% because that's what we would typically expect. If you're trying to quantify the impact. That's the first part. It's just the 5% versus the 6%, so it's a 1% difference. That's the first thing. The second bucket, I would say, is we did also look at the newly booked losses for the current accident year. I mean, when I say the current accident year, it's 2025 we're talking about here. There we also were, I would say, even more than usually prudent, so we were really going to the top of the plausible best estimate range, and that is the thing that drove the normalized combined ratio being at about 80% rather than 79. That's about another 1% right there that I think you can, that you can take into account. The third bucket is, let's say, a little bit less precisely defined, but this is in the outlier category, where you're right. We had an interesting mix of outlier losses last year. There was more focus on man-made events, and less focus on nat cat, where it was a pretty benign year, as we all know. What I would be able to offer you by way of quantification is that we said, by having to, or by choosing to strengthen reserves, in particular for man-made outlier events, that drove the discounting benefits in the combined ratio higher. Because a lot of these events being man-made, take more years to settle, to run off than a typical property loss, you have cash flows further out into the future, and discounting is a bigger topic there. That's why we said the discounting benefit embedded in the combined ratio, expressed in combined ratio points, was 13% in Q4 standalone, so pretty high. I mean, 4% above the... let's call it the baseline level of 9%. If you spread that across the entire year, it's 1% in the combined ratio over the entire year. That was just the discounting effect. I haven't exactly answered your question, but that's the best I can do for you there on quantification. Qualitatively, and I think this is now more the second part of your question, is what kind of things are we talking about? you know, we are aware of, and we are monitoring risk scenarios out there in the world. If I offer you some examples that are quite widely discussed in the public domain, there's so-called PFAS, P-F-A-S, which are also sometimes known by their nickname of forever chemicals. That's a loss complex we're monitoring. There are also other events out there in the world, like sexual abuse and molestation. Then even the old classics like asbestos, we still need to keep an eye on, because claims do also there continue to come in. That hopefully gives you a flavor of the kind of things we're talking about. Thank you very much. Okay, we now turn to a question that came in in writing. It comes from Thomas List of the German Börsen-Zeitung. Thomas asks to please explain the lower Life and Health reinsurance net result, 2025 net result compared to 2024. Andrew? Yes, happy to do that. Thank you for the question. The first thing to say is, and perhaps what's driving your question, is that at the level of the total technical result, which is a KPI that we really care about for life and health reinsurance, we exceeded guidance modestly. The result was EUR 1,715 million, modestly exceeded the guidance of EUR 1.7 billion. You would therefore say that actually in the underlying insurance and reinsurance business of life health, we delivered very solidly. Coming to your question of, why is the net result lower? Well, the main reason is that the financial result, in particular the investment result, is lower than we would ordinarily expect. I mentioned earlier in my comments, that we engaged in significant trading of the portfolio, we realized significant losses across all three of the segments within the reinsurance field of business, in order to prepare ourselves to earn higher yields in future. Actually, in Life and Health, that was even reinforced by some special large transactions we did, which led to some losses being crystallized on the asset side. It's, it's purely an asset side story, nothing to do with the technical performance of the business. Andrew, the mid- and long-term outlook, is very much about growth, right? Absolutely. We see a strong and reasonably full pipeline, particularly in the field of large transactions, which is one of the main things driving growth of Life and Health reinsurance. The other one I will mention for completeness is expansion of our longevity business, which has been very successful over the last decade. Those trends and that momentum is undiminished. The fact that the net result in 2025 was lower, really has no bearing on that. Thank you very much. We have another question in writing, this time from Rachel Dalton of the Insurance Insider. Rachel says: "I note that in the fourth quarter for the PNC reinsurance unit, major losses this year were almost double what they were in the same period last year at EUR 588 million. Can you tell us more about what constituted these losses? I'll do it very briefly, and then please let us know if you would like to hear more details. The biggest event was Hurricane Melissa, which contributed largely to that number, to a large extent to that number, and then also the reserve strengthening Andrew was just talking about in the man-made space, is also reflected in the number here. Then, as always, the number also includes some positive runoff, so it's a net number, including losses, but also the runoff. I think that's what we can say on that question. Thank you, Christoph. We move back to the German channel. We have a question by Maximilian Foltz of Platow. Herr Foltz, bitte. Hello, thank you for taking my question. We see a beautiful background, but we don't see you. 2026 profit target. Oh! Sorry, I forgot to open my camera. Sorry. Your 2026 profit target is only slightly higher than last year's result, which would have been better without the balance sheet strengthening. Where does this caution come from? Are you taking a caution approach to your target in your first year as CEO? Herr Foltz, vielen dank. Ich mache mal auf Deutsch. Yes, Mr. Foltz, I'm going to answer in German. It is very good that you call this target a prudent or cautious one. I do not contradict you. I should say that this is a very ambitious target, actually, depending on which perspective you take. What is the reason for that? We've got different perceptions, I admit. The reason is the highly competitive market in the property casualty market. The point of departure is a very high figure. We exceeded it EUR 1.6 billion. Look at the earnings results five years ago of Munich Re. These are enormous increases, which we've seen over time. We've reached a very high, attractive level. From there, and increase it even further from there, here you might say, this is really bold. At least it is audacious, but at least it is very ambitious. Of course, the more competitive market in the Property Casualty market has to be added, and you've seen in the renewals, prices have come down, and then other things have also gone down. What will happen is that all the other segments will cushion this or balance this out. That is, the decreases which we see in the loss Property and Casualty business, and we do so, we accept it, you know, very consciously, and as I said, it is an ambitious target. We stay in the German channel. There is a question by Archibald Preuschat of Frankfurter Allgemeine Zeitung. Herr Preuschat, bitte. Yeah, good morning, yeah. Yes, good morning. I've got one of those, what happens if we've got the nat cat, our core business, now, despite ERGO, despite Global Specialty, things are as they are. Now, would you have been in a position to have a new record result if you hadn't had an disproportionately low development of the nat cat losses? The second question, which I have, 7.8% volume, which you took out or singled out, what were the focal points? What were the areas where you've retreated, in which regions? Thank you. Thank you. Thank you very much for this question. It's a hypothetical question, which is not easy to answer, because we do not look at individual driving forces or parameters. There are several, and some of these parameters are not known at the time of planning. If you look at the figures, we certainly benefited, you know, the nat cat, the losses came in less so than expected, and we had another burden because of the currency exchange fluctuations. These things cannot be known in the beginning of the year. If you look at the orders of magnitude, you can compare the two. I could go on, you know, the movements in one or the other direction, but I'm not going to do that because this will be very, very technical. What I want to say, the beauty of our business is that we've got a wide diversification of our portfolio, and this means we can really cushion or balance out any fluctuations in one or the other direction, and that's our target. You know, despite these fluctuations, we still want to achieve our targets and, you know, give reliable payouts to our shareholders. We've done so over the last 50 years, also share buybacks. You know, we want to have a steadily growing earnings trajectory. This is our ability, our art, so to speak, to cushion all these fluctuations, but it goes in both directions. There are many moving parts which result in some deviations, you know, from the things which we planned in the beginning. Then renewals, where did we give up business? Well, I would classify it according to the type of business. Three-quarters of the declines refers to proportional business, and to some extent, structural proportional business. These are businesses or business where customers gave us, say, a share in the yields of their portfolios. In this case, in this business, the margin is very low. We gave up volume and the effect, the impact of the margin, well, it is easy to see. The other decline, driven by the nat cat business, and this is, you know, this has been discussed in the run-up to the 1/1 renewals. Some of the business is declining because of the lower number of nat cat losses. We can confirm that, this meant the prices went down, and you see it on my bubble chart, about 6% price decline in this nat cat business. You know, in reinsurance, this is not an ongoing development or trend, our price ideas, well, didn't come through in this respect. We gave them up in order to achieve the profitability across our entire portfolio. I would like to say that there is a smaller renewal around in April, and in summer, things will be a bit more interesting, particularly in the United States. In January, you've seen a trend. Do you think that this trend will continue? Well, of course, we are not crystal gazing or crystal ball gazing, and we cannot do so, and I want to be, say, very cautious in what I say. It is clear, and everyone in this marketplace knows the market environment. In addition, you know, it depends on the market, depends on the loss experience, depends on the customers, and you cannot simply generalize things in this respect. 1/4 in Japan, this is the renewal round, and prices have gone down in Japan already. The point of departure is a bit different over there, but nevertheless, I can say that the global development is very well known, and, you know, in Japan, we haven't seen any major losses over there. Thank you. Thank you, Herr Proescholdt. We move back to a question that came in in writing by Glenn Turpa of The Intelligent Insurer. He says: "Please discuss your treaty shares on deals that you did like and were not inclined to prune at the renewals. Cedants didn't plow savings back into recouping retentions or other lucid terms and conditions, but there is some indication in the market that they chose to build panels. How much of this have you seen, and how did that impact your shares? Yeah, let me try this one. I mean, this is a very specific one, and I'm not sure if this is something we are very happy to comment on as all these individual and individual developments we have in several markets. Some of them are very specific. Again, our book is broadly diversified. Therefore, many individual developments which have been commented on, sometimes they affect us, sometimes they don't. Sometimes they are a small part in our book, sometimes they are a bigger part in our book. They are in only very rare cases, representative of what is going on in our book, across the entire book, and therefore, I would rather not comment on individual facts from renewals in one or the other market. Glenn, as this was a very detailed question, you might still try to contact our media colleagues after the conference. We have another question in writing, this time in German, from Sebastian Hölzle of the local Münchner Merkur. Just a question to understand more about ERGO. How is it possible that a tax decrease in the future leads to less earnings in the present? Active latent taxes, yes? Yes. Okay. Herr Hölzle, vielen Dank für die Frage. Mr. Hölzle, I'm going to answer this question in English to better express myself. I hope you understand. Your question is very justified because it's not intuitive at first sight that a reduction in the tax rate, the so-called Körperschaftsteuer Satz, in Germany, which is supposed to start happening in 2028 in a succession of steps, how this could actually be negative for us. The answer is hinted at already by my colleague, Roman, is that it relates to the fact that we have deferred tax assets in our accounts already, the latente Steuer position. Of course, these are calculated on the basis of tax rates. If you have, let's say, losses that you can carry forward, the value of those losses depends on the tax rate. When the tax rate is supposed to reduce, those deferred tax assets become less valuable. That is immediately visible in our accounts, which is why we take the hit already in 2025. Of course, in the medium to long term, a reduction in the tax rate is a positive thing for us because it means that profits that we will earn in the future will be taxed at a lower rate. The issue is that you don't see that yet. That only comes later. Thank you, Andrew. We move back to, well, we stay in Germany, but we move back to video. Ms. Krieger has another question. Frau Krieger, bitte. Right. Thank you. I just wanted to get back to the reduction in jobs at ERGO. Can you already gauge how that is going to impact your numbers in any way? Yeah, das können wir natürlich sehr gut. Yes. Of course, we can very well gauge that, Ms. Krieger, because if you remember, in the framework of our Ambition 2030 planning, we of course, also showed that on a group level, we are going to have a positive result impact due to cost savings. This impact is contributed by all business fields and all companies around the globe, but of course, also ERGO. For that reason, all of this is also fully included in our planning. Thank you. Sorry, a follow-up question: How much is ERGO actually going to contribute to that? Out of these EUR 600 million, that's what we're speaking of. That's right. I'm speaking of the EUR 600 million. That's in fact, right. Of course, we specifically decided to only give you the number on a group level and not break it down any further, because going forward, that is going to allow us for a little bit of flexibility. Please, I hope you understand that we don't take a deeper dive in that. That's a number that we'll only give you on a group level. Okay, we have another question, that came in in writing by Martin Assmann of Insurance ERM. The question is in German. Munich Re had. Just recently, Munich Re communicated a strategic realignment in which efficiency gains by way of artificial intelligence should play a big role. Also recently, in the ERGO Group, there were reports on connected HR reduction measures. How can you align these AI efficiency initiatives with the overall Munich Re strategy? Which clear timeframe do you see for the implementation, as well as for preliminary tangible impact, both operationally as well as financially within the Munich Re organization? Yeah, Assmann, vielen dank. Right, Mr. Assmann, thank you so very much. AI. Natürlich, eine wirklich. That is, of course, a truly revolutionary technology that is available. That is also, of course, going to, you know, continue developing very, very quickly. We are going to be using that even more. We're already using it. We're going to be using it even more going forward. Many things that we see from the Ambition 2030 is based on this particular technology and how we use it. It includes efficiency initiatives, it includes efficiency gains. Efficiency basically just means that things will be more efficient, of course, that basically the cost can be reduced without doing many things very differently. With, you know, efficiency, we also think that we can do things differently, that we get better with those things that we already do. On both sides of that spectrum, we have the respective projects already ongoing. In ERGO, this is more efficiency-driven. In reinsurance, it's a little bit differently oriented, but both, of course, represent a central lever in the strategy. The timeframe, well, this is all in the Ambition 2030, in the strategy there, but I'm sure you'll also understand that the short-term steps that we want to take are significantly more specific than everything that we're going to be doing closer to 2030. With technologies that develop so quickly, that just makes sense, and certainly nobody will be able to tell today what this technology can do in two, three, four years down the line. For that very reason, it's very important for us to stick as close to the technology as possible in order to really stay with what's current at the moment, to be able to use the technology when it's available, as it's available, while at the same time being creative, staying creative, and of course, always at an intellectually very high level, to really tap into the maximum utilization in order to ensure that we can support our reinsurance and primary insurance business acumen. Darüber hinausgehen nicht weit. Beyond that, I'm unable to specify any further, because as I said, with a technology that develops at this particular speed, I think it's impossible to, you know, specify it even more as to what we are gonna do in 2, 3, 4 years down the line. Okay. It would seem that we currently have no further questions. We still have a few minutes left. Are there any more questions? Yeah, Herr Preuschat, noch eine Frage. Herr Preuschat, bitte. Ja, wenn wir noch ein paar Minuten haben, dann. Well, since we still have a few minutes, maybe a more ethical question to the board of management. Job cuts at ERGO, ever-increasing profits, 90% payouts to the shareholders. How does that all go together? Naya, Herr Preuschat. Well, Mr. Preuschat, I think we have to, of course, see we are faced with competition. We're not alone in this world. Therefore, of course, we also have to do certain things that will allow us to continue to have a very solid competitive position. If you look at today's record levels. As of today, that's of course fantastic, but it is anything but assured that we will simply be able to achieve this without really putting in the work. For that reason, we have set out our Ambition 2030, and the corresponding strategy with the expectation that we are going to remain an attractive partner for all stakeholders. We did really put a lot of thought into how we position ourselves between these different stakeholders. However, competitiveness is central to this, and I think it also belongs in that consideration, you know, in terms of the responsibility we have to the employees, we have to the shareholders, we have to the group. I think that is everything that we have to align in the bigger picture. That balance, that equilibrium, also includes cost measures, while at the same time also involving investment, and we feel really good with this equilibrium that we struck. Thank you. One kind of them summation- We could also add to that the Verdi negotiating partner said that this agreement could be a potential blueprint for other insurance companies. That being said, any other questions? At the moment, we don't see any. Nine? No. Sorry, I said, asked. Okay, that got translated anyway. There don't seem to be any more questions at the moment, which would mean that we are coming to the end of this conference. If you have any follow-up questions, more detailed questions, our media team are, of course, available for you, for the rest of today and of course, also tomorrow. You will find their contacts at the end of the media release and obviously also on our website. Lastly, I would like to remind you of two important upcoming dates. The first one relates to our annual report, which will be published on the 18th of March, and in which we will make available even more detailed information. Secondly, of course, our annual general meeting, which will take place on the 29th of April. This brings us to the end of today's conference. Again, I would like to thank you very much for your interest and for spending time with us today. Goodbye, auf Wiedersehen, and speak soon. Bye-bye.

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