1、Munich Re Group Annual Report 2001 EnglishInterested in more?Please send meMunich Re Group Annual Report 2001in GermanEnglishSpanishMunich Reinsurance Company Annual Report 2001 in GermanEnglishSpanishPortrait 2002in GermanEnglishSpanishFrenchItalianMMnchener RckMunich Re Group!_This Munich Re annua
2、l report differs in appearance from any of itspredecessors,with a cover full of questions.Most of them are notfundamentally new,but they have acquired a new urgency after 11th September 2001.The list culminates in one central issue:How much risk can the world take?This question reflects the general
3、vulnerability of our systems as mani-fested in many fields of risk genetic engineering,communicationstechnology,the effects of globalization,to name but a few.Munich Reis directly in touch with these risk worlds.As leading risk carriers,wesee it as our task to find answers to the questions that have
4、 beenraised.Consequently,in the magazine part of the annual report,suchissues are dealt with in question-and-answer format by Munich Respecialists,who also offer perspectives on the future.01 _“The world will never be the same again.”Has this proved true after 11th September?(p.64)02 _ How do insure
5、rs cope with events like 11th September?(p.68)03 _ How are insurers and reinsurers dealing withterrorism risks?(p.70)04 _ How do you see the state of aviation one year on from 11th September?(p.74)05 _ What are potentially the most vulnerable points of our information networks?(p.75)06 _ Havent the
6、international agreements on climate protection come much too late?(p.78)07 _ How can Munich Res clientsbenefit from the Centre of Competence for Life Sciences?(p.82)08 _ What risks has genetic engineeringproduced in agriculture?(p.86)09 _ Is environmental awareness still“in”?(p.87)10 _ Does a reinsu
7、rer need a high market capitalization?(p.90)11 _ How does Munich Re safeguard its financial strength?(p.94)12 _ What resources are decisive for securing market leadership?(p.98)13 _ Will health insurance become aprivilege of the better-off?(p.99)Will the world ever be the same again?How do insurers
8、cope with events like 11th September?How are insurers and reinsurers dealing with terrorism risks?How do you see the state of aviation one year on from 11th September?What are potentially the most vulnerable points of our information networks?Havent the international agreements on climate protection
9、 come much too late?How can Munich Res clients benefit from the Centre of Competence for Life Sciences?What risks has genetic engineering produced in agriculture?Is environmental awareness still“in”?Does a reinsurer need a high market capitalization?How does Munich Re safeguard its financial strengt
10、h?What resources are decisive for securing market leadership?Will health insurance become a privilege of the better-off?Has Munich Res share price always been near its fair value?How prepared was Munich Re for 11th September?What makes Munich Re a preferred partner in risk?Has the restructuring of M
11、unich Res operations been successful?How is the market environment developing in primary insurance and what are the implications for Munich Re?Has MEAG passed the test?How do insurers perform the double act of taking on risks and getting a return?Do we need a new system of accounting?MMnchener RckMu
12、nich Re GroupMunich Re GroupAnnual Report 2001How much risk can the world take?Munich Re Group Annual Report 2001 EnglishInterested in more?Please send meMunich Re Group Annual Report 2001in GermanEnglishSpanishMunich Reinsurance Company Annual Report 2001 in GermanEnglishSpanishPortrait 2002in Germ
13、anEnglishSpanishFrenchItalianMMnchener RckMunich Re Group!_This Munich Re annual report differs in appearance from any of itspredecessors,with a cover full of questions.Most of them are notfundamentally new,but they have acquired a new urgency after 11th September 2001.The list culminates in one cen
14、tral issue:How much risk can the world take?This question reflects the general vulnerability of our systems as mani-fested in many fields of risk genetic engineering,communicationstechnology,the effects of globalization,to name but a few.Munich Reis directly in touch with these risk worlds.As leadin
15、g risk carriers,wesee it as our task to find answers to the questions that have beenraised.Consequently,in the magazine part of the annual report,suchissues are dealt with in question-and-answer format by Munich Respecialists,who also offer perspectives on the future.01 _“The world will never be the
16、 same again.”Has this proved true after 11th September?(p.64)02 _ How do insurers cope with events like 11th September?(p.68)03 _ How are insurers and reinsurers dealing withterrorism risks?(p.70)04 _ How do you see the state of aviation one year on from 11th September?(p.74)05 _ What are potentiall
17、y the most vulnerable points of our information networks?(p.75)06 _ Havent the international agreements on climate protection come much too late?(p.78)07 _ How can Munich Res clientsbenefit from the Centre of Competence for Life Sciences?(p.82)08 _ What risks has genetic engineeringproduced in agric
18、ulture?(p.86)09 _ Is environmental awareness still“in”?(p.87)10 _ Does a reinsurer need a high market capitalization?(p.90)11 _ How does Munich Re safeguard its financial strength?(p.94)12 _ What resources are decisive for securing market leadership?(p.98)13 _ Will health insurance become aprivilege
19、 of the better-off?(p.99)Will the world ever be the same again?How do insurers cope with events like 11th September?How are insurers and reinsurers dealing with terrorism risks?How do you see the state of aviation one year on from 11th September?What are potentially the most vulnerable points of our
20、 information networks?Havent the international agreements on climate protection come much too late?How can Munich Res clients benefit from the Centre of Competence for Life Sciences?What risks has genetic engineering produced in agriculture?Is environmental awareness still“in”?Does a reinsurer need
21、a high market capitalization?How does Munich Re safeguard its financial strength?What resources are decisive for securing market leadership?Will health insurance become a privilege of the better-off?Has Munich Res share price always been near its fair value?How prepared was Munich Re for 11th Septem
22、ber?What makes Munich Re a preferred partner in risk?Has the restructuring of Munich Res operations been successful?How is the market environment developing in primary insurance and what are the implications for Munich Re?Has MEAG passed the test?How do insurers perform the double act of taking on r
23、isks and getting a return?Do we need a new system of accounting?MMnchener RckMunich Re GroupMunich Re GroupAnnual Report 2001How much risk can the world take?2001Prev.yearChangein%Earnings per share1.419.8985.7Dividend per share1.251.25Amount distributedm221221Share price at 31st December305.0380.01
24、9.7Munich Res marketcapitalization at 31st Decemberbn54.067.219.8 June 2002Mnchener Rckversicherungs-GesellschaftCentral Division:CorporateCommunicationsKniginstrasse 10780802 MnchenGermanyhttp:/Order number:302-02954Editorial deadline:13th May 2002Concept and design:Claus Koch CorporateCommunicatio
25、ns,DsseldorfPicture creditsActionpress,Hamburg,cover flap,pp.17,33,43,53,61,65(left),122J.H.Darchinger,Bonn,p.6dpa,Frankfurt am Main,cover(left),pp.1,12,15,27,35,47,50,59,60,63,65(4 x right),67,100Focus,Hamburg,p.84Getty Images/Tony Stone,Munich,cover(right),pp.73,80,93,96Thomas Mayfried,Munich,pp.4
26、,5,64,66,68,70,72,74,75,76,78,81,82,85,86,87,88,90,92,94,97,98,99Munich Re archives,p.65(bottom)Sigrid Reinichs,Munich,p.89Reuters,Hamburg,pp.19,62,114,117,121Marek Vogel,Munich,p.77SenderName:Street:Town/city:Country:Firm:Tel.:Fax:E-mail:Munich Re80791 MnchenGermanyThe Munich Re Group value-oriente
27、d and with strong growthAs a Group we aspire to be one of the leading risk carriers and providers of financial services.We create lasting value by systematically building on our strengths:the competence and skills of our staffour global knowledge baseour financial strengthpartnership and trust withi
28、n our business relationshipsReinsurance,primary insurance and asset management complement each other in our Group in anoptimum way.Reinsurance:Since 1880 Munich Re has embodied competence in handling risks to an extent virtuallyunparalleled worldwide.5,000 insurance companies in around 150 countries
29、 rely on our expertise andfinancial strength.We assume a part of their risk and find solutions for the whole spectrum of riskmanagement.Primary insurance:Our primary insurers ERGO,Karlsruher and Europische Reiseversicherung offerthe highest degree of security and service to their more than 27 millio
30、n clients.Having a strong footingin primary insurance,especially personal lines business,is an important part of our strategy.Givencurrent demographic trends,there is great potential for growth in insurances of the person in particular.Asset management:MEAG,established in 1999,offers its investment
31、products and its services toinstitutional investors primarily other insurance companies and to private clients.We are developingMEAG into one of the top asset management companies.2001Prev.yearChangein%Gross premiums writtenbn36.131.116.1Result before amortization of goodwillm4152,615115.9Taxm1,0403
32、99360.7Minority interests in earningsm14532154.8Profit for the yearm2501,75085.7Investmentsbn162.0159.41.6Shareholders equitybn19.423.618.0Net underwriting provisionsbn138.6131.55.4Staff at 31st December38,31736,4815.0Munich Re Group 2001Key figures(IAS)A.M.Best,Fitch,Moodys and Standard&Poors have
33、each awarded the Munich Re Group their toprating.Our sharesC Ca al le en nd da ar r.The reader willbe accompanied through thisannual report by referencesto the year 2001 in theform of“margin notes”.Thepictures are snapshots of ayear which,though over-shadowed by the event of11th September,was in oth
34、erways a completely normalrisk year.1 1s st t J Ja an nu ua ar ry y 2 20 00 01 1L Li ig gh ht ts s o ou ut t.The two largestUS energy providers areinsolvent,and Californiaspower supply breaks down.The crisis is blamed on theliberalization of the USelectricity market.1 17 7t th h J Ja an nu ua ar ry
35、y 2 20 00 01 1C Ca at ta as st tr ro op ph he e.A severeearthquake of magnitude 7.7 claims the lives of atleast 14,000 people in theState of Gujarat,India,and damages more than onemillion buildings.Theeconomic loss amounts toUS$4.5bn.2 26 6t th h J Ja an nu ua ar ry y 2 20 00 01 1M Me el li is ss sa
36、 a.A new version ofthe computer worm thatcaused damage of US$1.1bnback in 1999 spreads likewildfire over the Internet.It paralyses many thousandsof computers,networks ande-mail systems,in somecases putting them out of action for days.1 18 8t th h J Ja an nu ua ar ry y 2 20 00 01 1T Th he e e ea ar r
37、t th h t tr re em mb bl le es s.Anearthquake of magnitude 7.7 triggers thousands oflandslides in El Salvador,burying hundreds of people.Altogether,there are 845fatalities.3 3r rd d J Ja an nu ua ar ry y 2 20 00 01 12001Prev.yearChangein%Earnings per share1.419.8985.7Dividend per share1.251.25Amount
38、distributedm221221Share price at 31st December305.00380.0019.7Munich Res marketcapitalization at 31st Decemberbn54.067.219.8 June 2002Mnchener Rckversicherungs-GesellschaftCentral Division:CorporateCommunicationsKniginstrasse 10780802 MnchenGermanyhttp:/Order number:302-02954Editorial deadline:13th
39、May 2002Concept and design:Claus Koch CorporateCommunications,DsseldorfPicture creditsActionpress,Hamburg,cover flap,pp.17,33,43,53,61,65(left),122J.H.Darchinger,Bonn,p.6dpa,Frankfurt am Main,cover(left),pp.1,12,15,27,35,47,50,59,60,63,65(4 x right),67,100Focus,Hamburg,p.84Getty Images/Tony Stone,Mu
40、nich,cover(right),pp.73,80,93,96Thomas Mayfried,Munich,pp.4,5,64,66,68,70,72,74,75,76,78,81,82,85,86,87,88,90,92,94,97,98,99Munich Re archives,p.65(bottom)Sigrid Reinichs,Munich,p.89Reuters,Hamburg,pp.19,62,114,117,121Marek Vogel,Munich,p.77SenderName:Street:Town/city:Country:Firm:Tel.:Fax:E-mail:Mu
41、nich Re80791 MnchenGermanyThe Munich Re Group value-oriented and with strong growthAs a Group we aspire to be one of the leading risk carriers and providers of financial services.We create lasting value by systematically building on our strengths:the competence and skills of our staffour global know
42、ledge baseour financial strengthpartnership and trust within our business relationshipsReinsurance,primary insurance and asset management complement each other in our Group in anoptimum way.Reinsurance:Since 1880 Munich Re has embodied competence in handling risks to an extent virtuallyunparalleled
43、worldwide.5,000 insurance companies in around 150 countries rely on our expertise andfinancial strength.We assume a part of their risk and find solutions for the whole spectrum of riskmanagement.Primary insurance:Our primary insurers ERGO,Karlsruher and Europische Reiseversicherung offerthe highest
44、degree of security and service to their more than 27 million clients.Having a strong footingin primary insurance,especially personal lines business,is an important part of our strategy.Givencurrent demographic trends,there is great potential for growth in insurances of the person in particular.Asset
45、 management:MEAG,established in 1999,offers its investment products and its services toinstitutional investors primarily other insurance companies and to private clients.We are developingMEAG into one of the top asset management companies.2001Prev.yearChangein%Gross premiums writtenbn36.131.116.1Res
46、ult before amortization of goodwillm4152,615115.9Taxm1,040399360.7Minority interests in earningsm14532154.8Profit for the yearm2501,75085.7Investmentsbn162.0159.41.6Shareholders equitybn19.423.618.0Net underwriting provisionsbn138.6131.55.4Staff at 31st December38,31736,4815.0Munich Re Group 2001Key
47、 figures(IAS)A.M.Best,Fitch,Moodys and Standard&Poors have each awarded the Munich Re Group their toprating.Our sharesC Ca al le en nd da ar r.The reader willbe accompanied through thisannual report by referencesto the year 2001 in theform of“margin notes”.Thepictures are snapshots of ayear which,th
48、ough over-shadowed by the event of11th September,was in otherways a completely normalrisk year.1 1s st t J Ja an nu ua ar ry y 2 20 00 01 1L Li ig gh ht ts s o ou ut t.The two largestUS energy providers areinsolvent,and Californiaspower supply breaks down.The crisis is blamed on theliberalization of
49、 the USelectricity market.1 17 7t th h J Ja an nu ua ar ry y 2 20 00 01 1C Ca at ta as st tr ro op ph he e.A severeearthquake of magnitude 7.7 claims the lives of atleast 14,000 people in theState of Gujarat,India,and damages more than onemillion buildings.Theeconomic loss amounts toUS$4.5bn.2 26 6t
50、 th h J Ja an nu ua ar ry y 2 20 00 01 1M Me el li is ss sa a.A new version ofthe computer worm thatcaused damage of US$1.1bnback in 1999 spreads likewildfire over the Internet.It paralyses many thousandsof computers,networks ande-mail systems,in somecases putting them out of action for days.1 18 8t
51、 th h J Ja an nu ua ar ry y 2 20 00 01 1T Th he e e ea ar rt th h t tr re em mb bl le es s.Anearthquake of magnitude 7.7 triggers thousands oflandslides in El Salvador,burying hundreds of people.Altogether,there are 845fatalities.3 3r rd d J Ja an nu ua ar ry y 2 20 00 01 11BOARD OF MANAGEMENTTo our
52、 shareholdersMembers of the Board of ManagementSUPERVISORY BOARDReport of the Supervisory BoardMembers of the Supervisory BoardMUNICH RE SHARESECONOMIC PARAMETERSOverall economic developmentOverall economic outlookMANAGEMENT REPORTThe business year 2001 Reinsurance Primary insurance Asset management
53、Prospects for 2002 Risk reportCorporate governanceMAGAZINEHow much risk can the world take?CONSOLIDATED FINANCIAL STATEMENTS 2001Consolidated balance sheetConsolidated income statementConsolidated cash flow statementSegment reportingNotes to the consolidated financial statementsAuditors reportFURTHE
54、R INFORMATIONRatingQuarterly figures and multi-year overviewImportant addressesAffiliated enterprises,participating interestsOther seats held by Board membersGlossaryIndex of key termsImportant dates246810161720222324404650526263631011021041051061141531541541551601621651691741760102030405060708PAGEC
55、ONTENTSMunich Re GroupReport for the 122nd year of business1st January 2001 to 31st December 2001In the magazine welook at questionsraised by the year2001.01 BOARD OF MANAGEMENT2To our shareholdersDear Shareholders,The claims burdens for the Munich Re Group from the terrorist attack of 11th Septembe
56、r 2001 amounted to the biggest single loss in Munich Res 122-year history.As the atrocity also led to price slumps on the capitalmarkets,we were severely tested in the investment sector as well.On the dayin question,Munich Re shares lost almost one third of their value,althoughafter the announcement
57、 of our first loss estimate they quickly recovered totheir former level.This reflects the confidence that you,ladies and gentlemen,showed in Munich Re,which we greatly appreciate.Despite the drastic reduction in our profit,we still propose paying a dividendof 1.25 per share for the business year 200
58、1 in other words,maintaininglast years substantial dividend increase.We see this as a signal for the currentyear:all the indicators at present point to a successful business year 2002,inwhich we can resume the trend set by the very good Group result for 2000.Our reinsurance result was shaped by thre
59、e factors which are typical of ourbusiness but which have rarely accumulated so massively:The risk of change had a dramatic impact on insurers and reinsurers in theyear under review.A terrorist attack with such catastrophic consequencesfor many classes of insurance simultaneously was inconceivable p
60、rior to11th September.And where policyholders,insurers and reinsurers do notperceive a risk,it follows that this cannot be reflected in prices and condi-tions.Our logical conclusion has been to adopt a new model for classifyingand evaluating terrorism risks,which we have been implementing sinceOctob
61、er.Another manifestation of the risk of change was the need to sub-stantially strengthen reserves for long-tail claims in our US business.The second factor that affected us much more strongly last year than in thelong-term average was the risk of random fluctuations.Claims experiencein the year unde
62、r review was characterized by an exceptional accumulationof large and very large losses.The third factor was the negative effects of 11th September on the capitalmarkets,which brought us considerable losses in the investment sector.The events of 11th September accelerated the return to reason in the
63、 insur-ance markets and really brought home to cedants the need for reinsurancewith top security.For 2002 we have terminated a substantial volume of loss-producing reinsur-ance treaties,which underscores our determination to carry on working for areturn to appropriate prices in reinsurance.We have n
64、ot reached our goal yet.In the treaty renewals for 2003 we need further adjustments in prices andconditions to reflect both the actual risk situation and the financial costs wehave to reckon with in future.01 BOARD OF MANAGEMENT3We continue to see the focus of our primary insurance operations as bei
65、ng inpersonal lines business.In this sector particularly,we aim to go on increasingthe share of ERGOs premium income from foreign business,which rose to19%in 2001.Of course,this does not rule out our seizing opportunities inGermany to expand and augment our business as well.Thus in March thisyear we
66、 concluded a strategic partnership between ERGO and KarstadtQuelleAG,which opens up further very promising avenues for us in primary insur-ance and other financial services.As part of this partnership,ERGO acquiredQuelle Versicherungen Holding,which is the third-largest German direct in-surer.This g
67、ives us an additional distribution channel:the direct selling ofinsurance products and financial services.Given the persistent weakness of the capital markets,2001 was not a goodyear for asset management and the sale of investment fund products.MEAGsbusiness with private and institutional clients wa
68、s also adversely affected.We are adhering to our objective of growth in all fields of our business,coupled with sustained optimization of profitability.Despite the setbacks wesuffered in 2001,we are convinced that we are on the right track.Insuranceand reinsurance are growth markets,and there is no
69、sign of an end to thegrowth:risks are continuing to increase worldwide,and with them the needfor cover and security.In 2002 we intend to take full advantage of the many different opportunities for strategic cooperation between the Munich Re Group and the HVB Group.Together we are forging a European
70、financial alliance that offers its clients abroad range of financial services.Another word on Munich Re shares:in 2001 they performed in line with theDAX.We are not satisfied with this,of course,given that on the basis ofnearly all longer performance review periods the price of our shares hasconstan
71、tly risen more strongly than the index.My colleagues and I had set ourselves ambitious objectives for the past year,and we are naturally disappointed with the poor result.This was certainly not due to a lack of dedication on the part of our staff:in this year of majorchange and quite exceptional cha
72、llenges,their efforts on behalf of your com-pany merit special recognition.In the future,too,with their commitment andtheir skills,they will do their part to make sure that you as shareholderscontinue to get the best out of your Munich Re shares.Yours sincerely,01 BOARD OF MANAGEMENT4Board of Manage
73、ment(from left to right)Dr.Hans-Wilmar von Stockhausen(until 30th June 2002)Europe 1together with Christian KlugeEurope 2 and Latin Americatogether withDr.Nikolaus von BomhardDr.Nikolaus von BomhardEurope 2 and Latin Americatogether withDr.Hans-Wilmar von StockhausenChristian KlugeEurope 1 together
74、withDr.Hans-Wilmar von StockhausenCorporate CommunicationsDr.Heiner HasfordFinanceGeneral ServicesCompany Structure and OrganizationKarl Wittmann Asia,Australasia,AfricaDr.Detlef SchneidawindLife and HealthHuman Resources01 BOARD OF MANAGEMENT5Dr.Hans-Jrgen Schinzler(Chairman of the Board of Managem
75、ent)Executive OfficesPressInternal AuditingDr.Jrg SchneiderAccountingControllingTaxesInformation TechnologyJohn Phelan(from 1st April 2002)North AmericaDivision of responsibilities as from 1st April 2002.Stefan HeydCorporate Underwriting/Global Clientstogether with Dr.Wolf Otto BauerClement BoothSpe
76、cial and Financial RisksInvestor RelationsStrategic PlanningDr.Wolf Otto Bauer(until 30th June 2002)Corporate Underwriting/Global Clientstogether with Stefan Heyd02 SUPERVISORY BOARD6Report of the Supervisory BoardLadies and gentlemen,The terrorist attack of 11th September gave rise to extremely hig
77、h losses inthe business year 2001,deeply impacting Munich Res results.However,thanks to its solid financial foundations,the company was able to close with a positive result for the year and even to consolidate and extend its position in the insurance and reinsurance markets.Meetings of the Superviso
78、ry BoardAt four meetings in the business year 2001,the Supervisory Board obtaineddetailed information from the Board of Management on the situation in themost important insurance and reinsurance markets,the development of busi-ness,and the position of the company and its main affiliates.The Board of
79、Managements reports on business experience,future planning,questions ofrisk management and significant individual measures were all discussedintensively.Between the meetings,the Chairman of the Supervisory Boardremained in close contact with the Chairman of the Board of Management and obtained ongoi
80、ng information on all important business transactions.The Board of Management kept us briefed on the restructuring measuresimplemented on 1st July 2001,which will further enhance Munich Resefficiency and competitiveness.We were also regularly informed by the Board about the Holocaust issue and the s
81、tate of considerations with regard to corporate governance.The second half-year was dominated by the effects of the terrorist attack on11th September.The Board of Management put us clearly and fully in thepicture about this loss,by far the biggest in Munich Res history.We conse-quently examined,amon
82、g other things,the new risk management concept for limiting terrorism coverage which the Board of Management presented tous in detail.Furthermore,we discussed at length the Board of Managementsdecision to give Munich Re subsidiary American Re a capital injection of overUS$1bn.The members of the Supe
83、rvisory Board were also notified without delay inbetween the meetings about all transactions that were of fundamentalsignificance for the further development of the Group,in particularthe restructuring of Munich Res shareholdings in the insurance andbanking sectors,decided on in the first half of th
84、e year;the combined public purchase and exchange offer to ERGO shareholders;the cooperation between the HVB Group and the Munich Re Group.The Annual General Meeting on 18th July 2001 adopted a number of amend-ments to the Articles of Association.In preparation for this,the SupervisoryBoard discussed
85、 in particular the authorization to increase the companysshare capital in order to issue employee shares and the authorization to buyback shares.Supervisory Board committeesThe Standing Committee met four times in 2001.Its work included matters forwhich the Supervisory Boards approval was required u
86、nder the internal rulesof procedure.The Board of Management Committee also met three times inorder to deal with personnel matters involving members of the Board ofManagement.No meeting of the Conference Committee was required.02 SUPERVISORY BOARD7Annual financial statementsKPMG Bayerische Treuhandge
87、sellschaft Aktiengesellschaft Wirtschaftsprfungs-gesellschaft audited the following documents and gave them an unqualifiedauditors opinion:the Munich Reinsurance Companys bookkeeping,itscompany financial statements and the consolidated financial statements as at31st December 2001,plus the management
88、 reports for the company and theGroup.The auditors reports were promptly given to all the members of theSupervisory Board.After a detailed discussion between the Chairman of theSupervisory Board and the auditor,there was also extensive consideration ofthe company financial statements and the consoli
89、dated financial statements,the management reports and the auditors reports at the meeting of theSupervisory Board on 23rd May 2002,at which the auditor was present.The Supervisory Board checked the company financial statements,the con-solidated financial statements,the management reports and the pro
90、posal ofthe Board of Management for appropriation of the balance sheet profit.Thisexamination did not result in any adverse findings.At the balance sheet meeting of the Supervisory Board,we approved andadopted the annual financial statements drawn up by the Board of Manage-ment.We agree to the Board
91、 of Managements proposal for the appropriationof the balance sheet profit,which provides for an unchanged dividend of1.25 per share.Corporate governanceThe Supervisory Board welcomes the German Code of Corporate Governanceadopted in February 2002,which sets out standards of good and responsiblecorpo
92、rate management and control.Munich Re already meets many of thesestandards.We will be looking at the Codes other recommendations with theBoard of Management shortly.PersonaliaWith effect from 1st April 2002 we appointed Mr.John Phelan(55)a memberof the Board of Management.Mr.Phelan joined Munich Rei
93、nsurance Companyof Canada(MROC)in 1973,where he became President and Director in 1986.Since 9th March 2002 he has been President,Chief Executive Officer andChairman of the Board of American Re Corporation(ARC).There has also been a change on the Supervisory Board.One of the share-holders representat
94、ives,Dr.Ferdinand Pich,left the Board on 16th April 2002.As his successor with effect from 17th April 2002,the Registry Court hasappointed Dr.Bernd Pischetsrieder;this appointment is scheduled to be rati-fied by the AGM on 17th July.We thank Dr.Pich for the valuable contributionhe made during his ti
95、me as member of our Supervisory Board.The great dedication shown by the members of the Board of Management andthe staff of the individual Group companies was again a significant factor inthe Munich Re Groups performance in the year under review.The SupervisoryBoard wishes to thank them for their har
96、d work and commitment on behalf ofthe company.Munich,23rd May 2002For the Supervisory BoardUlrich HartmannChairman02 SUPERVISORY BOARD8Members of the Supervisory BoardCHAIRMANUlrich HartmannChairman of the Board of Management of E.ON AGDEPUTY CHAIRMANHerbert BachEmployee of the Munich Reinsurance Co
97、mpany DEPUTY CHAIRMANDr.jur.Henning Schulte-NoelleChairman of the Board of Management of Allianz AGHans-Georg AppelEmployee of the Munich Reinsurance Company Klaus Peter BiebrachEmployee of the Munich Reinsurance Company Dr.jur.Rolf-E.Breuer Spokesman of the Board of Management of Deutsche Bank AGPe
98、ter BurgmayrEmployee of the Munich Reinsurance CompanyRudolf Ficker Former Member of the Board of Management of the Munich ReinsuranceCompanyProf.Dr.rer.nat.Henning KagermannCo-Chairman of the Executive Board and Chief Executive Officer of SAP AGGertraud KppenEmployee of the Munich Reinsurance Compa
99、ny Dr.techn.h.c.Dipl.-Ing.ETH Ferdinand Pich(until 16th April 2002)Chairman of the Supervisory Board of Volkswagen AG 02 SUPERVISORY BOARD9Dr.jur.Dr.-Ing.E.h.Heinrich von PiererPresident and Chief Executive Officer of Siemens AGDr.e.h.Dipl.-Ing.Bernd Pischetsrieder(from 17th April 2002)Chairman of t
100、he Board of Management of Volkswagen AGDr.jur.Albrecht SchmidtSpokesman of the Board of Management of Bayerische Hypo-und Vereinsbank AGDr.rer.nat.Klaus SchumannEmployee of the Munich Reinsurance CompanyDr.phil.Ron Sommer Chairman of the Board of Management of Deutsche Telekom AGWolfgang StgbauerEmp
101、loyee of the Munich Reinsurance CompanyJosef SlEmployee of the Munich Reinsurance CompanyDr.rer.pol.Alfons TitzrathFormer Member of the Board of Management of Dresdner Bank AGJudy VEmployee of the Munich Reinsurance CompanyLudwig WegmannEmployee of the Munich Reinsurance Company For seats held on ot
102、her supervisory boards and comparable bodies see page 165f.03 MUNICH RE SHARES10HAS MUNICH RES SHARE PRICE ALWAYS BEEN NEAR ITS FAIR VALUE?!_Certainly not.Experience has shown that the maxim“to err ishuman”applies on the capital markets as well.A classic example is what happened to Munich Res share
103、price on 11th and 12th September and in the days afterwards.Directly following the World Trade Center tragedy,we wereflooded with telephone calls asking for estimates of our shareof the loss.Like the others involved,we were not able to givean answer so soon.What occurred next might be termed“negativ
104、e fantasy”:speculation led to our share price of 285going through the floor.At 12.30 hrs on 12th September itreached a low of 207,wiping off over 14bn or nearly onethird of Munich Res market value all within the space of lessthan 24 hours.What we needed to do was convince analysts and investorsthat
105、even such a mega-catastrophe could not reduce MunichRes value by anything like that amount.On 12th September,at 15.00 hrs,we announced our initial estimate of Munich Restotal claims burden,and this brought the turnaround.We werethe first to quantify the losses and thus helped to provide ayardstick f
106、or an appropriate assessment of the event on themarket.The negative speculation was gradually replaced by a reverse trend towards fair value.Despite this,our InvestorRelations team remained on 24-hour call.By the end ofSeptember the share price had recovered to its old level.Clement Booth,Member of
107、the Board of Management03 MUNICH RE SHARES11Munich Re sharesThe stock market year 2001 crisis,crash and catharsisBusiness headlines in the past year were largely dominated by profit warnings.Blue chips experienced some substantial falls in share prices.The New Marketwas particularly badly affected,w
108、ith the NEMAX 50 suffering an erosion ofaround 60%.Shares of many media and IT firms are now only penny stocks.In this generally crisis-ridden environment,11th September provided a dramaticwatershed:the attack on the World Trade Center unnerved the financial marketsworldwide and led to a crash withi
109、n a few hours.The DAX plummeted by11%.In the following days it fell further and reached its year low of 3,787 on21st September.In the fourth quarter,share prices recovered and largely made up for whatthey had lost in the September crash.The autumn rally brought some stocks aplus of up to 50%.The DAX
110、 closed the year at 5,160 points,nearly 20%lowerthan at year-end 2000.Munich Re shares volatileThe performance of Munich Re shares largely matched the development of themost important share price indices in 2001.Our shares began the new year at379.00.Proceeding from this level,they followed the gene
111、ral downtrend until aroundthe middle of March.There was then a short recovery phase up to the begin-ning of April.At first the share price was unable to profit from the announce-ment of the disentangling of shareholdings with Allianz and the restructuringof the remaining portfolio.Munich Re sharesGe
112、rman share price index(DAX)Morgan-Stanley insurance index(in)Status:7th May 2002Share performance1st January 2001=100H Hu um ma an n g ge en no om me e.The sequencingof the human genome islargely complete.Two com-peting teams one inter-national and financed withpublic money,the other a US firm prese
113、nt thegenetic blueprint for humanbeings.1 15 5t th h a an nd d 1 16 6t th h F Fe eb br ru ua ar ry y 2 20 00 01 111010510095908580757065601101051009590858075706560JFMAMJJASONDJFMAM03 MUNICH RE SHARES12From May to July ERGO shareholders were able to exchange their stock forMunich Re shares at a ratio
114、 of 2:1 and a cash payment of 9 per ERGO share.This offer met with a very positive response and the transaction proved a suc-cess.Munich Res stake in ERGO rose from 62.9%to 91.7%,and our shareprice increased substantially.However,from July onwards it again followedthe generally accelerating downtren
115、d on the stock markets.The atrocity of 11th September triggered the absolute low point in the perform-ance of our shares in 2001.However,our policy of intensive communicationwith the financial markets in the immediate aftermath contributed significantlyto stabilizing the market situation.The transpa
116、rency,speed and credibility ofthe information we provided was rewarded,and succeeded in counteringnegative speculation.In the days that followed,the situation gradually returned to normal,and from21st September onwards our share price outperformed the DAX and otherinsurance stocks again.It closed th
117、e year at 305.00,giving us a marketcapitalization of 54.0bn.Key figures for our shares2001Prev.yearNumber of shares at 31st Decemberm176.9176.9Year high385.00391.00Year low232.00237.00Year-end closing price305.00380.00Annual performance%19.750.9Market capitalization at 31st Decemberbn54.067.2Average
118、 daily turnover in Xetra trading000724462Price/earnings ratio at 31st December216.338.4Earnings per share1.419.89Dividend per share1.251.25Tax credit per share(for German shareholders)*0.54Dividend yield at 31st December%0.40.3Overall dividend amountm221221*Owing to a change in corporation tax law,t
119、his credit now no longer applies.Munich Re shares are no-par-value registered shares.They are traded on allthe German stock exchanges and are also included in Xetra computer trading.Additional data and news are provided on our website().Besides this,of course,information can be obtained from the dai
120、ly papers orfrom specialist providers of financial market data.ReutersMUVGnBloombergMUV2WKN843002ISINDE 0008430026S St te ee el l m me er rg ge er r.Arbed,Aceraliaand Usinor merge to becomeNewCo,the worlds largeststeel group,with headquar-ters in Luxembourg.1 19 9t th h F Fe eb br ru ua ar ry y 2 20
121、 00 01 103 MUNICH RE SHARES13DAX 306.96Euro STOXX 501.56FTSE4GoodGlobal 1000.36FTSE EURO TOP 1000.61MSCI1.60S&P Europe 3500.52STOXX 500.91Shareholder profileMunich Res most important shareholder continues to be Allianz,with a stakeof 24.8%,followed by HypoVereinsbank with 13.3%and Deutsche Bank with
122、5.5%.Our free float amounts to 56.4%.Around half the increase in the numberof Munich Re shareholders to the current total of almost 100,000 is attributableto the share exchange with which we increased our shareholding in the ERGOInsurance Group.Dividend developmentEven after such turbulent events as
123、 those that hit us in the 2001,we continueto pursue a policy of continuity with regard to dividends.We again propose topay our shareholders a dividend of 1.25 per share for the year under review.The overall amount distributed will thus total 221m.Investor relationsThe continual expansion of our inve
124、stor relations activities proved its worth inthe year under review,particularly in the critical period following 11th Septem-ber.Our policy of actively informing analysts and fund managers with full andprompt reports helped to curb the speculative downslide in our share price.We also attach importan
125、ce to being represented at important national andinternational conferences of the insurance industry and to systematicallyexpanding bilateral contacts.At our last AGM the attendance rate amounted to 65.6%of the share capital,afigure which clearly reflects the interest of the public and the quality o
126、f theevent.This attendance substantially exceeded the average attendance rate ofDAX companies as a whole.Performance of a specimen portfolioMunich Re shares represent an attractive investment with a well-above-aver-age return for the long-term investor.In the ten-year period from 1992 to 2001the sha
127、re price rose on average by 19.8%annually,compared with growth ofonly 12.6%in the DAX.Our shares continue to be among the winners withinthe insurance sector as well.This is shown by a comparison with the MorganStanley insurance index,whose average annual increase in the same periodwas 14.2%.At the e
128、nd of 1992,with the share price at DM 2,600(=1,329.36),a portfolioof 100 Munich Re registered shares with a par value of DM 100(=51.13)required a total investment of 132,936(excluding transaction costs).After the two stock splits in August 1997 and January 1999,this investment todayamounts to a port
129、folio of 2,000 no-par-value registered shares.By reinvesting dividends to purchase further shares and making use of opr-ation blanche(i.e.reinvesting the proceeds of subscription rights),a Germanshareholder would have been able to add a total of 470 no-par-value sharesand 16 warrants to the portfoli
130、o.Index weighting in%Status:7th May 2002BanksInsurance companiesInvestment companiesOther institutional investorsPrivate individualsGermanyRest of EuropeNorth AmericaOther regionsInvestor groups50%29%9%7%5%Regional distribution64%27%9%1%03 MUNICH RE SHARES14On the basis of a price of 266.50 per shar
131、e and 50.60 per warrant on 7th May 2002,the value of the portfolio amounts to 659,065,equivalent to anincrease of 396%.According to the internal rate of return method,this worksout at an average annual return of 18.7%.Performance of a specimen portfolioas from 30th December 1992 in 000Status:7th May
132、 2002Other capital market instrumentsOther securities issued by the Munich Re Group are the Munich Re warrants98/02,exchangeable bonds on Allianz shares and two natural catastrophebonds.During the exercise period,bearers of the warrants are entitled to subscribefor one Munich Re registered share for
133、 every two warrants held,at a strikeprice of 163.61.In the year 2001 the warrants decreased in value by 34.7%to 70.50.Of the original 3,500,000 warrants,a total of 68,218 had beenexercised up to 7th May 2002.The exercise period will expire on 3rd June 2002.As the current share priceis well above the
134、 strike price,we expect virtually all the warrants to beexercised.ReutersDE 843009BloombergMUVAWKN843009ISINDE 000843009130.12.199230.12.199330.12.199430.12.199530.12.199630.12.199730.12.199830.12.199930.12.200030.12.20017.5.200213319416218722742151261793575465903 MUNICH RE SHARES15ReutersDE 0111539
135、68=BloombergMUNREWKN245254ISINDE 0002452547The exchangeable bonds were issued in May 2000 with an annual couponpayment of 1%on the face value.Investors are entitled to convert each of their exchangeable bonds into Allianz shares,so that the investmentrepresents a combination of bond and call option.
136、The bonds volume totals1.15bn or around 1%of Allianzs share capital.At the end of the year theystood at 98.32%.Their term ends on 8th June 2005 with a redemption rateof approximately 108.6%.For institutional investors we also placed two natural catastrophe bondswith a total value of US$300m in Decem
137、ber 2000;their three-year termbegan on 1st January 2001 and ends on 31st December 2003.E Ea ar rt th hq qu ua ak ke e.The inhabitantsof Seattle experience theworst quake for 50 years,with a magnitude of 6.8.It causes insured losses ofUS$300m and economic lossesof US$2bn.2 28 8t th h F Fe eb br ru ua
138、 ar ry y 2 20 00 01G Gl lo ob ba al l c cu ul lt tu ur ra al l i in nh he er ri it ta an nc ce e.The radical Islamic Talibanblow up the world-famousBuddha statues inAfghanistan,which date back to the 4th and 6thcenturies.1 1s st t M Ma ar rc ch h 2 20 00 01 111TH SEPTEMBER WAS A SHOCK.HOW PREPARED W
139、AS MUNICH RE FOR IT?!_The destruction of the World Trade Center in New York broughtgreat suffering to many people and had direct political conse-quences that are still with us.The insurance industry was hitextremely hard by this event in two respects:Not only was there the unprecedented extent of ma
140、terialdamage caused by a terrorist attack across all classes of insur-ance,but the industry was also painfully confronted with thefar-reaching influence of this loss event on the development ofthe global economy,including stock prices.Even though we atMunich Re had not imagined a terrorist act of th
141、ese dimen-sions,our other extreme scenarios had included loss eventsthat would have a knock-on effect on the financial markets.This meant we were adequately prepared for the loss in termsof capital resources.In other words,we had made assumptionswhich despite 11th September and its exceptional losse
142、s ultimately proved sufficient,even though the impact on ourfinancial statements cannot be denied.Dr.Nikolaus von Bomhard,Member of the Board of Management04 ECONOMIC PARAMETERS162001:Marked slowdown in the global economyChange in real GDP in%04 ECONOMIC PARAMETERS17The US,which had been the startin
143、g point of the global downturn,slipped intoa recession in March 2001.After reaching 4.1%on average in the year 2000,growth in its real GDP was very restrained in 2001,amounting to only 1.2%.Business investment and industrial production in particular dropped sharply,whereas consumer spending held up
144、relatively well,despite rising unemploy-ment and falling stock markets.Then,in the fourth quarter,a recovery set inwith unexpectedly strong growth.This improvement was promoted and supported by monetary and fiscalmeasures.The US Federal Reserve,for its part,had lowered the intended Fedfunds rate a t
145、otal of eleven times since January 2001.The rate currently standsat 1.75%.Further substantial tax cuts and spending increases are imminent.In Euroland and Switzerland there was also a marked slowdown in economicgrowth,with rates decreasing to 1.5%and 1.3%respectively.Growth inGermany lagged even fur
146、ther behind at 0.6%,and unemployment reached a record 4.29 million in February 2002.Economic parametersGeneral economic development in 2001After the record year 2000,the global economy experienced a sharp slowdownin 2001.The events of 11th September further impaired the already weak stateof the glob
147、al economy and dashed emerging hopes of an early recovery.Theattacks on New York and Washington,and their consequences,led to falls inmacroeconomic growth rates worldwide.In major industrialized countriesthese amounted to around 0.5 percentage points of real GDP.The net resultwas a decline in global
148、 economic growth to 2.5%the lowest figure since1993.After growth of 12.4%in 2000,the volume of world trade fell by 0.2%in the year under review.642019701971197219731974197519761977197819791980198119821983198419851986198719881989199019911992199319941995199619971998199920002001First and second oil cri
149、sesAverage 19702001GulfWarAsiancrisisM Ma as sc co ot t.Mir,Russias 140-tonne space icon,iscommitted to a watery gravein the South Pacific afternearly 90,000 orbits.Theeventuality of Mir crashingand causing damage wasinsured for a sum of US$200m.2 23 3r rd d M Ma ar rc ch h 2 20 00 01 1Measured over
150、 the year as a whole,the inflation rate in Euroland amounted to2.6%.Following an increase in energy prices,it temporarily touched 3.4%inMay.However,its subsequent reduction enabled the European Central Bank to lower interest rates by 125 basis points.In contrast to the situation in Euroland,economic
151、 growth in the UK remainedrobust in 2001 thanks to strong domestic demand.Real GDP rose by 2.2%.Japan is currently experiencing its fourth recession in 11 years.In 2001 realGDP fell by 0.4%.On top of this,there are signs that the economy is again indeflationary waters.Given the economic slowdown in
152、the large industrialized countries,emergingmarkets suffered particularly from worsening sales prospects for their exports.Foreign exchange marketsThe euro was unable to benefit from the weakness of the US economy in thepast year and fluctuated between 0.84 and 0.95 against the US dollar.At theturn o
153、f the year the European single currency was being traded at 0.88.As economic prospects became significantly gloomier,the Japanese yen fellconsiderably in value against both the US dollar and the euro in the secondhalf of 2001.Stock marketsIn this difficult economic environment the stock markets expe
154、rienced theseverest bear market since 1974.Only in the phases of massive interest ratecuts by the Federal Reserve at the beginning of 2001 and during the April-Mayperiod were stocks able to resist the negative impact of repeated profit warn-ings.Rattled investor confidence,coupled with the terrorist
155、 attack in the US,led to a final shakeout on 21st September.The subsequent year-end rally wasimpressive,but could only make up for around half of the preceding slide.04 ECONOMIC PARAMETERS18US/exchange rate.0.960.940.920.900.880.860.840.820.960.940.920.900.880.860.840.82JFMAMJJASONDJFMAA At tt te en
156、 nt ti io on n d de ef fi ic ci ie en nc cy y h hy yp pe er r-a ac ct ti iv vi it ty y d di is so or rd de er r.The drugRitalin,manufactured byNovartis,is prescribed forchildren suffering fromADHD.Claimants file billion-dollar suits fordamages,which are provi-sionally dismissed by thecourts owing to
157、 lack ofclarity in the symptoms.1 14 4t th h M Ma ar rc ch h 2 20 00 01 104 ECONOMIC PARAMETERS19Bond marketsThree factors enabled investors in bonds to achieve extraordinary returns formuch of the year:low inflation rates,the reduction of interest rates by centralbanks,and the flight to fixed-inter
158、est investments triggered by falling stockmarkets.Nevertheless,market development in the area of short terms andcorporate bonds was extremely volatile.Owing to the sometimes aggressivemonetary policy of the central banks,yield curves steepened considerably,while in the year-end comparison long-term
159、yields remained more or lessconstant at just under 5%.Development of the insurance industryThe longer-term trend of disproportionate growth in insurances of the personcontinued in most countries in 2001.Business experience in property-casualtyinsurance,on the other hand,was affected by the unsatisfa
160、ctory economicsituation in the major insurance markets.The hesitant growth in new businesswas nevertheless partially compensated for by the global trend towards higherrates in both primary insurance and reinsurance.Especially in the reinsurancemarket,the reduced scope for cushioning underwriting los
161、ses with investmentincome,combined with the higher claims costs,led to a sharp rise in pricesand an improvement in technical conditions.Cedant demand for reinsurancecover from companies with top ratings rose disproportionately after 11th Sep-tember.R Ri ig g g go oe es s d do ow wn n.Despitemassive
162、rescue efforts,the worlds largest mobileoil platform sinks off thecoast of Brazil.1.5 millionlitres of oil flow into thesea.The total loss is esti-mated at just over US$500m.Munich Re has a share ofaround 5%in the risk.2 20 0t th h M Ma ar rc ch h 2 20 00 01 104 ECONOMIC PARAMETERS20General economic
163、 outlook for 2002It is extremely difficult at this juncture to make predictions about the nearfuture.A crucial uncertainty factor is how the geopolitical environment willevolve.Since the turn of the year there have been mounting signs of global economicimprovement:initial data from the real economy
164、in the US and an increasingnumber of early indicators in both Euroland and the US pointed to the begin-nings of an economic upswing.The extent to which this upswing gathersmomentum in the US and the global economy depends largely on the elasticityof private demand.There is still the risk of an econo
165、mic setback if the privatesector does not react as hoped to the monetary and fiscal incentives or ifunfavourable capital market developments curb the upswing.The investmentclimate could be substantially worsened,for example,by doubts about thecredibility of published balance sheets in the wake of sp
166、ectacular cases ofinsolvency.Given the countrys considerable domestic problems,economic growth inJapan is likely to remain below expectations.Among emerging markets,theAsian economies should show the biggest recovery.Outlook for capital marketsWe expect the US to be the key driver in the internation
167、al capital marketsagain in 2002.High liquidity injections by the central banks and the USsexpansive fiscal policy have created a positive environment for stock markets.However,a lasting recovery in stock prices presupposes a corresponding risein company profits,i.e.a revival in the real economy.We a
168、re proceeding on the assumption that inflation will remain at a low levelworldwide,rising towards the end of the year in tandem with the businesscycle.Yields on the bond markets will tend to increase if the economyimproves.Further reductions in interest rates by central banks are unlikely in this en
169、vironment.Prices on the commodity markets will probably stabilize in the next fewmonths and then gradually rise,as soon as the real economy picks up again.If there is a sustained upward trend in stock prices and the mood lifts on thecorporate bond market,more capital is likely to flow into the US ag
170、ain.Thevalue of the US dollar against the euro is therefore likely to stay within therange of the last two years,despite the overvaluation of the US currency.A An ng gr ra a I II I a an nd d I II II I.Insuranceof two nuclear power plants(built by Siemens PowerGenerating Group)in theState of Rio de J
171、aneiro.Block II goes into operationafter a 24-year constructionphase with long interrup-tions,but without anysignificant technical prob-lems.2 26 6t th h M Ma ar rc ch h 2 20 00 01 121Outlook for the insurance industryOur assumption is that the insurance industry will follow the trends of macro-econ
172、omic development in the current year.In reinsurance we expect rates toincrease further and the hard market phase to continue over several renewals.04 ECONOMIC PARAMETERS05 MANAGEMENT REPORT22WHAT MAKES MUNICH RE A PREFERRED PARTNER IN RISK?!_There was a time,and not so very long ago,when businessbet
173、ween insurers and reinsurers was largely determined bypersonal relationships:contacts in the industry were cultivatedat the dinner table or the opera,over a round of golf,or bysending handwritten letters and congratulations on personalachievements.Tempi passati.It is true that personal relation-ship
174、s are still an important factor today in reinsurance.Buthard-headed consideration of the commercial benefits increas-ingly plays the central role.The better each partys require-ments are met,the better the partnership.A preferred partner in risk is therefore the partner whom youtrust more than other
175、s to find tailor-made quality solutions for your own,often complex problems.Munich Res frequentlycited financial strength is certainly an important“opportun-istic”aspect in this process.But the decisive qualitativedifference is the risk carriers knowledge potential.It is thecombination of experience
176、,expertise,innovation and the pro-ductive transfer of this through dialogue that makes a suitablerisk partner into a preferred partner in risk.The fruitful and creative transfer of knowledge will thereforecontinue to be a key element of Munich Res partnerships withclients.And we can still always pla
177、y golf afterwards.Christian Kluge,Member of the Board of Management05 MANAGEMENT REPORT23Management reportThe business year 2001The overdue adjustment of prices and conditions in reinsurance,which hadbegun in the 2001 renewals,accelerated after the attack on the World TradeCenter on 11th September.W
178、e achieved our growth targets in primary insurance and reinsurance lastyear.But as a result of the terrorist attack and other major losses,our claimscosts climbed to a record level,so that despite the improved terms of tradeour Group profit showed a massive decline.GrowthGroup premium income rose by
179、 16.1%(13.5%)in the past year to 36.1bn(31.1bn).Growth thus exceeded even our high expectations.We earned 57%(54%)of our premium income from REINSURANCE,wherepremiums written were up 21.1%(19.2%)to 22.2bn(18.3bn).Adjusted toeliminate the effects of changes in exchange rates and acquisitions,premiumg
180、rowth still amounted to a notable 17.9%(11.5%).Munich Res capacity andsecurity were more in demand than ever.We again grew most strongly in life and health reinsurance,where we recordeda plus of 25.5%(25.6%).In property-casualty reinsurance,premium climbed by19.6%(17.2%).Growth in Munich Res PRIMARY
181、 INSURANCE business was also very satis-factory.Premium revenue advanced by 9.0%(6.8%)to 15.7bn(14.4bn),5.4 percentage points being due to consolidation effects(mainly the first fullconsolidation of Bayerische Vita,Italy,in the ERGO Insurance Group).Life andhealth insurance grew by 7.9%(5.0%),and pr
182、operty-casualty insurance by11.7%(11.4%).Expansion of business in the rest of Europe continues to beone of our main strategic goals:in the year 2001 the amount of non-Germanbusiness written in primary insurance rose to 3.0bn(1.8bn).ResultThe Group result deteriorated markedly in 2001:we were left wi
183、th a profit ofonly 250m(1,750m),despite positive one-off effects of 830m(320m)fromthe German tax reform and from the valuation of our shares in Allianz on aless deferred basis.The main reason for this disappointing result was theextraordinarily heavy claims burden for large and very large losses.We
184、paidor reserved a total of 4.7bn for such losses last year,3.4bn(2.2bn net)for11th September alone.A Al ll li ia an nz z.Allianzs acqui-sition of Dresdner Bankcreates the worlds fourth-largest financial group.1 1s st t A Ap pr ri il l 2 20 00 01 105 MANAGEMENT REPORT/REINSURANCE24THE ORGANIZATIONAL
185、RESTRUCTURING OF MUNICH RE WAS EXTENSIVE.HAS IT BEEN SUCCESSFUL?!_Munich Res organizational restructuring in 2001 was indeedextensive.Virtually all the staff employed in our reinsurancebusiness were affected more or less directly by the measures.It is therefore all the more pleasing to report that M
186、unich Resnew structure has been well received by clients and staff alike.Helpful in this respect was the smooth and rapid implemen-tation backed by full and prompt communication,which kepteveryone informed and prevented uncertainties arising.The new structure was launched on schedule on 1st July 200
187、1,giving us sufficient“warm-up”time before the year-end treatyrenewals for 2002.Not least owing to the terrorist attack of11th September,these renewals took place under much moredifficult conditions than usual.The new structure was given a“baptism of fire”which we had not anticipated,but even inthis
188、 crisis situation it proved its effectiveness.Our staff also have new perspectives in terms of greaterauthority to make decisions and take action.Quick decision-making processes in particular are one of the strengths of the new structure,and this virtue has been confirmed by our clients.In the meant
189、ime cross-divisional cooperation has started towork well,too.Its main objectives are quality assurance inunderwriting and the continuing development of our profes-sional know-how.Following the positive report to date,our task for 2002 will be to consolidate the new structure and fine-tune it wherene
190、cessary.Stefan Heyd,Member of the Board of ManagementReinsurance2001Prev.yearGross premiums writtenbn22.218.3Loss ratio non-life%104.585.0Expense ratio non-life%30.630.3Combined ratio non-life%135.1115.3Result before amortization of goodwillm6871,525Investmentsbn71.064.9Net underwriting provisionsbn
191、50.843.905 MANAGEMENT REPORT/REINSURANCE25ReinsuranceOverviewThe new structure safeguards and enhances our ability to meet the require-ments of our changing business environment.Since 1st July 2001 the previousmatrix organization,with its units responsible for business lines and productson the one h
192、and and for markets and clients on the other,has been replacedby seven new operative divisions:Life and HealthEurope 1Europe 2 and Latin AmericaAsia,Australasia,AfricaNorth AmericaCorporate Underwriting/Global ClientsSpecial and Financial RisksOur 2001 management report follows the pattern of the ne
193、w structure.Thismeans that the premium volumes of the regional divisions and divisional unitsare not comparable with those published in the previous year.Substantialblocks of premium,for example,are now written by the division CorporateUnderwriting/Global Clients,which is responsible for our reinsur
194、ance businesswith globally operating insurance groups.The comparative figures given forthe previous year are pro forma figures.S Sy ym mp po os si iu um m.Munich Re Groupengineering underwritersfrom Asia,Australasia,London,Princeton and Munichmeet in Hong Kong.2 23 3r rd d A Ap pr ri il l 2 20 00 01
195、 1 2000200118.322.2Gross premiums in bnFor the reporting on individual fields of business,the following principle applies:figures thatderive from business within a segment are eliminated,whereas figures that derive frombusiness with companies from other segments(e.g.intra-Group reinsurance cessions
196、fromprimary insurers to reinsurers)are included in the following data.05 MANAGEMENT REPORT/REINSURANCE262001Prev.yearChangeGross premiums by divisionmmin%Life and Health5,9004,70125.5Europe 12,1512,1520.1Europe 2 and Latin America2,8832,08538.3Asia,Australasia,Africa1,4871,35110.1North America4,3733
197、,61820.9Corporate Underwriting/Global Clients3,6152,84527.1Special and Financial Risks1,7871,57313.6Total22,19618,32521.1Reporting by divisionSummaryIn the year under review we were able to increase our premium in life andhealth business by 25.5%(25.6%).As in the previous year,growth was drivensolel
198、y by our non-German business.The result was satisfactory.In property-casualty business our premium income grew by 19.6%(17.2%);the combined ratio totalled 135.1%(115.3%).Losses from natural catas-trophes accounted for 1.5(2.0)percentage points,and the terrorist attack of 11th September for 15.4 perc
199、entage points.We paid and reserved an amount of 2.2bn net for the losses in New York andWashington.On top of this devastating loss event,we had to cope with a largenumber of other major losses in the year under review.We also had to againstrengthen provisions for losses from previous business years.
200、In the renewals of reinsurance treaties for the current business year wesucceeded in achieving substantial adjustments of prices and conditions inimportant markets.We profited to an above-average degree from the fact thatprimary insurers are attaching even more importance to the quality and security
201、of their reinsurers.Furthermore,there was a shrinkage of the reinsurancecapacity on offer in many markets after the occurrences of 11th September,which created additional business opportunities for us.We terminatedbusiness to a significant extent where we were unable to achieve essentialobjectives.A
202、ll in all for 2002,we expect further premium growth and a muchmore satisfactory result.Gross premiums by division26(25)%10(12)%13(11)%7(7)%20(20)%16(16)%8(9)%Life and HealthEurope 1Europe 2 and Latin AmericaAsia,Australasia,AfricaNorth AmericaCorporate Underwriting/Global ClientsSpecial and Financia
203、l Risks05 MANAGEMENT REPORT/REINSURANCE27Life and healthSince the reorganization of our internal operations,life and health reinsurancehave been combined in one division,in line with the structure adopted bymany of our clients.LifeIn the year under review we again considerably expanded our premiumin
204、come,achieving an increase of 23.4%(22.1%).As in the previous year,growth mainly derived from non-German markets.The significant trends we have experienced for life insurance in recent yearshave continued:stable spending power among clients,demographic changesand the cutting-back of social security
205、systems.These have been accompaniedby new business potentials in emerging markets.We have improved our com-petitiveness in important markets and for 2002 expect further strong growth in premium income and another satisfactory result.EuropePremium income in our German business remained at about the s
206、ame level as in 2001.The issue that dominated the German market was the reform of the pension system,which involves partially replacing the state pension withprivately funded provision and also strengthening company pensions.Wesupport our business partners on the one hand by helping them develop sui
207、t-able products for this reform;on the other hand we devise specially tailoredreinsurance concepts to protect them against biometric risks(longevity anddisability).Our premium showed growth in the UK in 2001,and we are pushing stronglyahead with the expansion of our portfolio in France.Our business
208、in Central,Eastern and Southern Europe also developed pleasingly.We see clear growthimpulses for further new business in both insurance and reinsurance.North AmericaWe again recorded above-average growth in the US and Canada in 2001.In the US life reinsurance market,where we are represented by our s
209、ub-sidiary Munich American Reassurance Company(MARC),we achievedpremium growth of more than 80%.This large increase resulted partly fromthe acquisition of CNA Financial Corporations life reinsurance business at theend of 2000,and partly from strong organic growth.The acquisition of CNAfirmly establi
210、shes us among the five biggest life reinsurers in the US.Weexpect growth rates in life reinsurance to continue surpassing those in primaryinsurance.In Canada,Munich Reinsurance Company Canada Branch(Life)again per-formed well.Its premium volume,which showed an appreciable increase,reflects in partic
211、ular the growing trend among our clients to use reinsuranceas an instrument of capital and risk management.Future business prospectscontinue to look rosy.S Sp pa ac ce e t to ou ur ri is sm m.Dennis Titofulfils a lifelong dreamwith a flight ticket for US$20m.He returns safelyafter six days in space.
212、3 30 0t th h A Ap pr ri il l 2 20 00 01 1200020013,8654,769Gross premiums in mGross premiums by region57(64)%34(28)%2(2)%7(6)%EuropeNorth AmericaAsiaOthers05 MANAGEMENT REPORT/REINSURANCE28AsiaThe Asian life insurance markets are only gradually recovering from the crises of the last few years.Japane
213、se companies are still struggling with the problems of shrinking investment income and the high interest-rateguarantees given under past policies.In some Asian markets we have not fully succeeded in recapturing the high growth rates of earlier years.New markets like China and India promise good busi
214、ness opportunities.TheChinese insurance market opened further at the end of 2001 as a result of the accession of the Peoples Republic to the World Trade Organization(WTO).In India the ending of the state monopoly in insurance and the liberalization of the market offer opportunities that we are seeki
215、ng to develop through the office we opened in Mumbai last year.HealthIn health reinsurance,our premium income again grew strongly,producing anincrease of 35.3%(44.6%).We also saw the first fruits of our involvement inChina,where we are partnering DKVs strategic cooperation with a local insurer.This
216、led to an appreciable increase in our shares of business.In Latin Americaand in the Middle East we also strengthened our market position,even thoughwe had to terminate some loss-producing accounts.In most markets we were able to improve our results.Our overall resultdeclined,however,because a major
217、product field in our North Americanbusiness did not progress as well as first appeared likely.In our view,health insurance continues to offer very substantial growthpotential.Throughout the world,state systems of healthcare are experiencingfinancial strains which make liberalization and privatizatio
218、n of social securitysystems a realistic proposition,at least in the medium term.Reinsurance willalso benefit from the increase in demand in established insurance markets withlarge premium volumes,albeit not to the same extent as primary insurance.On top of this,we see above-average growth prospects
219、now in the markets ofLatin America,the Middle East and Asia.We are working hard to add innova-tive managed care solutions to the range of services we provide in the areasof claims and risk management,risk selection and product development.For 2002 we expect reduced growth,due to the termination of b
220、usiness in ourUS portfolio.Our systematic remedial measures should,however,lead to animprovement in the result.2000200120002001Loss ratio70.882.5Expense ratio31.131.4Combined ratio101.9113.98361,131Gross premiums in m05 MANAGEMENT REPORT/REINSURANCE29Europe 1In our division EUROPE 1 we handle proper
221、ty-casualty reinsurance fromGermany,the other Central European counties,Eastern Europe,Greece andTurkey.The divisions premium income stagnated in 2001.This was mainly due to thedevelopment of our portfolio in Germany and to our quality-driven underwrit-ing policy.In most countries,business continued
222、 to suffer from inadequateprices and conditions.Claims experience was mainly characterized by manylarge individual losses.The underwriting result deteriorated compared with theprevious year.Germany continues to be by far the biggest market handled by the division.Premium volume in the German primary
223、 insurance market for property-casualtybusiness rose by around 2.9%(1.2%)to approximately 50bn in 2001,havingshrunk continually from 1995 to 1999.Remedial measures in motor insurancemade visible progress,and there were the first signs of premium increases inindustrial property insurance as well.Howe
224、ver,in our view the rates that arenow being charged in primary insurance still fall short of the required tech-nical levels.The premiums of 1,596m(1,776m)earned in Germany accounted for 74.2%(82.5%)of the divisions premium volume.Compared with the previous year,premium income fell by 10.1%.Especiall
225、y in motor insurance,reductions incessions and restructuring measures involving proportional reinsurancetreaties with large premium volumes have had a negative effect on thedevelopment of our premium.The casualty lines of business still make upmore than half of our German business,however.Our result
226、 showed a marked deterioration.Claims costs from major liability claims and fire lossesoutweighed the distinct improvements in results made possible by remedialefforts in both insurance and reinsurance.In Austria our premium volume increased by only 1.6%to 129m(127m)as a consequence of our selective
227、 underwriting policy.The result was stillunsatisfactory.Premium income from business in Switzerland written by the division Europe 1 rose by 11.9%to 53m(47m).In comparison with 2000,which was hit by natural catastrophe losses,we also managed to substantiallyimprove the result.In the 24 countries of
228、Eastern Central Europe and Eastern Europe,the candi-dates for membership of the EU,especially Poland,are of prime importancefor us.Our premium volume totalled 169m(124m).All in all,our result wasnot yet satisfactory.In the treaty renewals for 2002 we terminated some long-standing treatyrelationships
229、 in individual cases where it proved impossible to find a mutuallyacceptable basis for further cooperation.This will lead to falling premiumincome in some countries in the current year.We expect our Europe 1 divisionto produce premium growth of 35%in 2002 and a considerably better result.Gross premi
230、ums by region74(83)%6(6)%2(2)%8(6)%2(2)%2(1)%6(0)%GermanyAustriaSwitzerlandEastern EuropeTurkeyGreeceOthers200020012,1522,151Gross premiums in m20002001Loss ratio60.775.5Expense ratio31.431.2Combined ratio92.1106.7Mnchener Rck Italia*2001Prev.yearGross premiumsm588613 Life and healthm171177 Property
231、-casualtym417436Net premiumsm316305 Life and healthm107107 Property-casualtym209198Loss ratio non-life%82.886.2Expense ratio non-life%30.926.4Combined ratio non-life%113.7112.6Profit for the yearm18.24.2Investmentsm1,2521,124*Financial statements in accordance with IAS.05 MANAGEMENT REPORT/REINSURAN
232、CE30Europe 2 and Latin AmericaOur division EUROPE 2 AND LATIN AMERICA is responsible for clients fromNorthern,Western and Southern Europe,and from Latin America,in property-casualty reinsurance.Premium volume showed an increase of 38.3%in 2001.The result was affectedby several large individual losse
233、s.The divisions largest market is the UK,where premium income again grew,driven both by both new business and by rising rates.The negative result isattributable to the terrorist attack in the US and to major individual losses.Wewere able to strengthen our top position in property-casualty reinsuranc
234、e.In Northern Europe we also retained our position as market leader.The resultremained negative,however,not least because of the poor claims experiencein motor business.Contrary to our expectations,the underwriting result in the Netherlands stayedin the red.The switch from proportional to non-propor
235、tional reinsurance pro-grammes is increasingly affecting the development of our premium.In France we also recorded a deficit,owing to major losses and unsatisfactoryoriginal rates.The explosion at a chemicals factory in Toulouse,which causedconsiderable damage in the surrounding area,gave rise to hi
236、gh claims costsfor this division as well as other units.Altogether it resulted in a burden ofmore than 100m for the Munich Re Group.Our subsidiary in Italy,Mnchener Rck Italia(MRI),maintained its leadingmarket position.Its technical result in non-life business was unsatisfactory,however.In Spain and
237、 Portugal the result also remained below our expectations.Thiswas mainly due to claims experience in property business.12(10)%Gross premiums by region10(10)%78(80)%Northern EuropeWestern and Southern EuropeLatin America200020012,0852,883Gross premiums in m20002001Loss ratio96.486.4Expense ratio29.22
238、8.9Combined ratio125.6115.305 MANAGEMENT REPORT/REINSURANCE31The economic situation in some countries of Latin America deteriorated in2001,in several cases dramatically.Our business proved stable in this difficultenvironment.There was a further delay in the opening of the Brazilian market.Despite th
239、e occurrence of some large losses and natural catastrophes theearthquake in El Salvador,for example we again recorded good results.Treaty renewals for 2002 in the division Europe 2 and Latin America were alsocharacterized by a change in the market climate in favour of reinsurers.Wewere able to stren
240、gthen our position in the individual markets,to take a bigstep towards achieving the requisite prices and conditions,and to grow ourpremium.All in all,we expect to record a satisfactory result.C Ca an nc ce er r t th he er ra ap py y.A new cancerdrug,licensed by the FDA in the US,comes onto themarke
241、t.Gleevec is the firstdrug directly targeted atthe molecular cause of cancer seen as a milestoneby the journal“Science”.1 10 0t th h M Ma ay y 2 20 00 01 1Munich Reinsurance Company of Australasia(MRA)2001Prev.yearGross premiumsA$m678460 LifeA$m9462 Property-casualtyA$m584398Net premiumsA$m185145 Li
242、feA$m5840 Property-casualtyA$m127105Loss ratio non-life%87.464.0Expense ratio non-life%29.427.8Combined ratio non-life%116.891.8Profit for the yearA$m5.016.5InvestmentsA$m75163505 MANAGEMENT REPORT/REINSURANCE32Asia,Australasia,AfricaOur division ASIA,AUSTRALASIA,AFRICA covers three continents and t
243、hePacific Islands:an area that practically girdles the earth,with a large numberof very different insurance and reinsurance markets.In the year under review we increased our premium income from this area by10.1%,achieving most of the growth in Japan and Australia.Despite the extremely difficult econ
244、omic environment,Japan remains theworlds second-largest non-life insurance market.With premium income of298m(271m)and a 20.0%share of the premium volume,this country is thedivisions biggest market.Structural change in the Japanese insurance industrypersists,with mergers and cooperation agreements st
245、ill the order of the day.We were able to expand our business relations with the main Japanese insur-ance groups and to maintain our market leadership in the non-life sector.In Korea,which continues to offer good prospects for reinsurers,our premiumagain grew at an above-average rate,rising by more t
246、han 50%to 80m(53m),and the result was pleasing.We have taken systematic advantage of theprogressive opening of the market to further consolidate our leading marketposition.Foreign reinsurers in India are still subject to restrictions on market access.Our business opportunities were therefore limited
247、.In Australia and New Zealand we are represented mainly by our subsidiaryMunich Reinsurance Company of Australasia(MRA).1=A$1.73170(1.58884).The consolidation process in the insurance industry is continuing in both coun-tries.Although there was another fall in the number of potential reinsuranceclie
248、nts in Australia and New Zealand,MRA was able to again considerablyexpand its premium volume.By contrast,the result was below expectations,owing to an increased number of large losses.Our business in the very promising growth markets of Greater China con-tinued to develop satisfactorily.We again suc
249、cessfully defended our top posi-tion in an extremely competitive market environment,and have a secure basisfor expanding our portfolio long term.14(17)%18(16)%Gross premiums by region21(19)%Asia,AustralasiaGreater China,Southeast AsiaAfricaOthers200020011,3511,487Gross premiums in m20002001Loss rati
250、o67.383.1Expense ratio31.829.4Combined ratio99.1112.547(48)%Munich Reinsurance Company of Africa(Group)2001Prev.yearGross premiumsRm1,7081,738 Life and healthRm368448 Property-casualtyRm1,3401,290Net premiumsRm685761 Life and healthRm252332 Property-casualtyRm433429Loss ratio non-life%74.372.2Expens
251、e ratio non-life%29.427.8Combined ratio non-life%106.1103.4Profit for the yearRm109.466.4InvestmentsRm2,9512,22205 MANAGEMENT REPORT/REINSURANCE33Premium rose by 20.7%to 216m(179m).However,the overall result acrossall lines of business was impacted by Typhoon Nari,which hit Taiwan inautumn 2001.The
252、economic environment in Southeast Asia is extremely difficult.We never-theless halted the decline in our premium income in the business year 2001and,with a good overall technical result,broadened the basis for sustainedgrowth.In Africa the business written by our subsidiary Munich Reinsurance Compan
253、yof Africa(MRoA)stems mainly from the South African market.Developmentsthere,and the fact that we largely withdrew from the Zimbabwean market,meant that our premium income fell by 11.0%to 203m(228m).There wereno major claims costs from natural catastrophes.The result,which had alreadybeen very good
254、in the previous year,showed a further notable improvement.1=R7.69710(6.39340).A long-standing feature of the insurance and reinsurance markets in the Nearand Middle East is overheated competition.Despite positive underwritingresults overall,we did not manage to achieve the requisite risk premium lev
255、els in the markets.Israel is the largest market in the Near and Middle East.Notwithstanding thetense political situation,we expanded our premium volume by 20.7%to204m(169m).The intense competition especially in property and liabilitybusiness meant that the result was unsatisfactory.As a whole,we are
256、 optimistic about current-year business development in thedivision Asia,Australasia,Africa.We are satisfied with the results we achievedin the treaty renewals for 2002.We were able to implement some significantimprovements in areas where prices and conditions were previously inade-quate.Our remedial
257、 efforts may lead to a fall in business volume in somemarkets,but this will not cloud the overall picture.We take into account in ourunderwriting policy that many countries in the region are exposed to naturalcatastrophes;in so doing,we seek to earn the profits in catastrophe-free yearsthat are urge
258、ntly necessary for covering very large losses.Altogether,weexpect further growth in 2002 and a good result.A Al ll li is so on n r ra ag ge es s.Tropicalstorm Allison gives rise torecord insured flood lossesof US$3.5bn in the US.Over 100,000 vehicles andthousands of buildings areaffected.The overall
259、 losstotals US$6bn.5 5t th h J Ju un ne e 2 20 00 01 1American Re2001Prev.yearGross premiumsUS$m4,3353,671 HealthUS$m510342 Property-casualtyUS$m3,8253,329Net premiumsUS$m3,3263,240 HealthUS$m498330 Property-casualtyUS$m2,8282,910Loss ratio non-life%113.686.8Expense ratio non-life%33.730.6Combined r
260、atio non-life%147.3117.4Result for the yearUS$m85864.4InvestmentsUS$m10,1557,89405 MANAGEMENT REPORT/REINSURANCE34North America The division NORTH AMERICA is responsible for our subsidiaries AmericanReinsurance Company and the Munich Re Canada Group.The divisions premium income grew markedly in the
261、business year 2001,rising by 20.8%.Although we terminated some business,the losses in premiumwere more than offset by new business and improvements in rates.The resultwas much worse than in the previous year,owing primarily to the losses of11th September.In the US,American Re experienced its most di
262、fficult year to date.This wasmainly due to the following circumstances:As one of the leading reinsurers in the US non-life market,American Re had to cope with extremely high claims costs of 1.2bn gross from the atrocity of 11th September.Besides this,provisions for losses from previous years hadto b
263、e substantially strengthened again.This was a consequence also facedby other market players at both insurance and reinsurance level of the com-pletely inadequate prices and conditions that had been a feature of theAmerican property-casualty market in recent years.Compared with the dramatic impact of
264、 these developments,losses from naturalcatastrophes were relatively low,albeit higher than the average for the last few years.They included the tropical storm Allison,which cost American Renearly 56m.All this was exacerbated by the significant fall in interest rates and the down-trend on the stock m
265、arkets,which caused the investment result to decline,preventing it from compensating for underwriting losses to the same extent as in previous years.1=US$0.89545(0.92400).For the current year we expect the hardening of the US non-life market tocontinue.Besides notable rate increases averaging 35%in
266、treaty business and 38%in facultative business,American Re was able to achieve a furtherobjective in the renewals as at 1st January 2002:an appreciable reduction incommission paid to clients.This at last marks the return to more risk-adequateconditions.95(96)%Gross premiums by region5(4)%USCanada200
267、020013,6184,373Gross premiums in m20002001Loss ratio91.4125.2Expense ratio30.731.6Combined ratio122.1156.8Munich Reinsurance Company of Canada2001Prev.yearGross premiumsCan$m328255 Property-casualtyCan$m328255Net premiumsCan$m8995 Property-casualtyCan$m8995Loss ratio property-casualty%87.779.2Expens
268、e ratio property-casualty%29.927.9Combined ratio property-casualty%117.6107.1Profit for the yearCan$m3.811.8InvestmentsCan$m40435605 MANAGEMENT REPORT/REINSURANCE35American Re is realigning itself structurally and in terms of the business itwrites in the Munich Re Group,concentrating on its core bus
269、iness in the US.In a first step,Munich Re will take over American Res international businesssegment,i.e.business outside the US.Besides this,American Re will worktogether more closely with specialists in Munich in the fields of healthcare,ocean marine and aviation.Munich Reinsurance Company of Canad
270、a(MROC)maintained its position asmarket leader in Canada.Its gross premium volume was up 37.3%on the previous year.The result forthe year was again positive.1=Can$1.38644(1.37123).We are proceeding on the assumption that,despite the keen competition,ourbusiness in Canada will continue to grow in 200
271、2 and register the usual goodresult,always provided we are not badly hit by catastrophe losses.Altogether,we expect the current business year to produce rising premiumincome in our North American business and given unexceptional claimsexperience an improved result.O Op pe er ra at ti io on n s su uc
272、 cc ce es ss sf fu ul l.Experts succeed in reducingthe 4.5-metre tilt of the800-year-old Tower of Pisaby 44 cm.1 16 6t th h J Ju un ne e 2 20 00 01 105 MANAGEMENT REPORT/REINSURANCE36Corporate Underwriting/Global ClientsThis division,which writes 22.2%of our property-casualty business,handlesaccount
273、s with major international insurance groups(hence“Global Clients”).It also writes business worldwide in selected special classes and markets.Parallel to this,it performs the function of corporate underwriting for thereinsurance group in non-life business,which includes the following:Fundamental ques
274、tions of underwriting policy and quality assuranceDevelopment of products and servicesClaims managementIntegration of actuarial methods in our business processesCalculation of provisions for IBNR(incurred but not reported)lossesPremium income written by the division rose by 27.1%in the year underrev
275、iew,with growth in virtually all client segments.The underwriting resultdeteriorated markedly compared with the previous year,mainly because of the WTC loss.But even excluding these claims,the result was not satis-factory a consequence of the inadequate rating level in many markets.The adjustments i
276、n terms of trade that have meanwhile been achieved,combined with our acquisition of new business,will have a positive effect inthe business year 2002.We therefore anticipate pleasing growth in premiumand a distinct improvement in the result.Nevertheless,risk-commensurateprices and conditions have no
277、t yet been implemented everywhere,so thatthere will be a need for further remedial measures in the 2003 renewals.Global clientsWe succeeded in consolidating and even extending our position in businesswith our global clients.In the first three quarters of 2001 it looked as if wewere on course to impr
278、ove the underwriting result compared with the previ-ous year,but hopes of this were dashed by the heavy claims burden from the WTC catastrophe and other large losses.The substantial underwriting loss reflects the global operations of our clients,who largely participate in the same major risks throug
279、hout the world,and also stems from the fact that individual portfolios are highly exposed.In the renewal negotiations we took extensive measures to improve the qualityof the overall portfolio.At the same we realized every opportunity to broadencooperation with our global clients.Lloyds/US businessHe
280、re we succeeded in considerably increasing our premium income throughthe selective expansion of attractive business.The underwriting losses in thisbusiness segment(especially in property and marine)were also chiefly due tothe WTC loss.However,this exceptional loss event accelerated the trend onthe i
281、nsurance and reinsurance markets towards substantial rate increases andimprovements in conditions.7(8)%Gross premiums by class ofbusiness14(14)%14(17)%29(25)%12(8)%11(10)%1 3(18)%Personal accidentLiabilityMotorFireEngineeringMarineOther classes200020012,8453,615Gross premiums in m20002001Loss ratio9
282、3.0130.3Expense ratio29.630.1Combined ratio122.6160.405 MANAGEMENT REPORT/REINSURANCE37Agricultural risksIn the agricultural classes of business we recorded growth in premium volumeand a very good underwriting result in the year 2001.The decisive factor herewas the positive performance of government
283、-sponsored crop insurance in theUS,which is easily the biggest market for us in agriculture,accounting for 85%of our premium.The remainder comes mainly from Germany,Portugal andAustralia.We see good prospects for growth in agricultural reinsurance,whichour team of specialists are consistently seekin
284、g to exploit.For 2002 we expect to increase premium income by around 30%,mainly fromadditional business potential in the US;the result should again improve.Workers compensationIn the year under review we were able to further reduce the losses derivingfrom business in force in markets where remedial
285、measures have now beenimplemented.As social security systems are reformed and privatized,we hopeto use our specialist knowledge to acquire substantial volumes of business,with corresponding earnings capacity in the medium term.We have built upan internationally recognized centre of competence for th
286、is purpose.Customized portfolio solutionsIn this highly specialized segment we offer our clients tailor-made financingsolutions for the run-off of loss portfolios.We continue to see attractiveprospects in this area long term.The business usually involves large individualtransactions for which single
287、 premiums are paid.Geo Risks ResearchThe Geo Risks Research Department deals with occurrences in the field ofnatural hazards,especially the marked increase in catastrophe losses;itanalyses their causes(e.g.concentration of values,climate-changing factors)and evaluates the results for our underwritin
288、g.Its wide range of services isgreatly valued by our clients,who make frequent use of them.In addition,the department has close contacts with scientific institutions and the media.These contacts are used to put the insurance industrys point of view in publicdiscussion of issues related to natural ha
289、zard risks.Major natural catastrophesT To op pp pi in ng g-o ou ut t c ce er re em mo on ny y.Members of Munich Recelebrate the companysrestructuring with a bigparty.1 19 9t th h J Ju ul ly y 2 20 00 01 10246810121416161412108642019501955196019651970197519801985199019952000NumberFloodWindstormEarthq
290、uake,volcanic eruptionOthers05 MANAGEMENT REPORT/REINSURANCE38Special and Financial RisksThis division develops innovative fields of business and products,establishesnew distribution channels,works to win new client segments,and underwritesthe special lines of credit,aviation and space reinsurance.I
291、t is also responsiblefor planning and placing the retrocession of the whole reinsurance group,withthe exception of American Re.Rate increases in aviation business and the alternative markets segmentensured that premium income rose by 13.6%in the year under review.The clearly negative result is prima
292、rily attributable to the terrorist attack of11th September,but it also reflects the state of the global economy and theensuing company failures,which had a knock-on effect on credit insurance inparticular.Results were also hit by the high loss ratio in space reinsurance,where the risk of random fluc
293、tuations made itself felt.For 2002 we expect our premium volume to show strong growth again in allbusiness segments,thanks to the remedial progress made in insurance andreinsurance.We are also planning a further expansion of our business in thealternative markets segment.As far as the result is conc
294、erned,we expect adistinct improvement.We laid the foundations for this in the last round ofrenewals,with a selective underwriting policy and further adjustments inprices and conditions.Credit and bondingThe sluggishness of the overall economy has led to a rising number of insol-vencies since the sec
295、ond quarter of 2001.These have included headline-hittingfailures like Hornitex,APP/AFP,Enron and Kmart.The results of our creditreinsurance in the year under review were correspondingly negative.For the rest of 2002 it is predicted that there will be a discernible recovery inthe world economy.This w
296、ill only be reflected in the results of credit insurancewith a certain time lag,however.It also remains to be seen when the remedialmeasures of the primary insurance market,initiated as from mid-2001,willbear fruit and to what extent.In the last renewals we were able to improvereinsurance conditions
297、 across the board,in some case significantly.Premiumgrowth in the current business year will be in the single-digit percentagerange.Aviation and spaceThe premium volume of our divisional unit for this business grew markedly by21.0%.Growth derived mainly from rate increases in aviation insurance,whil
298、epremium income in space insurance declined.The negative result is attributable for the most part to the WTC loss,but alsoto remaining deficits in original rates.In the light of the massive claims burden,it proved possible to implement long-overdue increases in the premium level in the last quarter
299、of 2001.For 2002 we therefore look forward to stronggrowth again and given average claims incidence a pleasing result.25(25)%Breakdown of gross premiums26(24)%12(8)%35(33)%2(10)%Credit and bondingAviation/spaceAlternative marketsNew ReOthers200020011,5731,787Gross premiums in m20002001Loss ratio105.
300、6109.3Expense ratio28.531.6Combined ratio134.1140.9New Reinsurance Company2001Prev.yearGross premiumsSfr m1,238974 Life and healthSfr m20995 Property-casualtySfr m1,029879Net premiumsSfr m835702 Life and healthSfr m11263 Property-casualtySfr m723639Loss ratio non-life%78.888.5Expense ratio non-life%
301、27.428.6Combined ratio non-life%106.2117.1Result for the yearSfr m52.217.8InvestmentsSfr m2,6282,43305 MANAGEMENT REPORT/REINSURANCE39Alternative marketsThe clients in this business segment,which we service with our unit Munich-American RiskPartners(MARP),are primarily large industrial corporations.
302、Wenumber among the market leaders with our products in some sectors here andsucceeded in considerably expanding our business in the period under review.This will continue in 2002,when we will be concentrating primarily on theEuropean market.The results of the year under review were impacted by theWT
303、C loss and were thus very negative.As the price level has since risenperceptibly,we are reckoning with a positive result for 2002.The unsatisfactory result posted again by our subsidiary New Re in Geneva,whose business focuses on Europe,was due to three main factors:run-offlosses from earlier underw
304、riting years accompanied by the need to strengthenreserves,especially in motor and liability reinsurance;the negative experienceof fire business;and claims costs from the WTC loss.1=Sfr 1.51050(1.55780).Following the progress already made on the prices and conditions front in thetreaty renewal negot
305、iations for 2001,further improvements were achieved for2002.As the restructuring of New Res entire portfolio has now been concludedand facultative underwriting terminated,we expect a satisfactory result for thecurrent year.Premium income should be around the same level as last year.Alternative Risk
306、Solutions/RetrocessionThis divisional unit bundles Munich Res activities in the developmentandmarketing of non-traditional risk-financing and capital-market solutions.Wesupport our clients with holistic risk management,offering a full spectrum ofcovers and services ranging from conventional reinsura
307、nce cover to struc-tured reinsurances.Especially in the wake of 11th September,there has been a pronounced increase in the demand for financially structured risk cover.The retrocession capacity available on the world market became scarce in2001.For this reason,and because there has been an above-ave
308、rage accu-mulation of major loss events in the last few years,we had to accept pricerises for all our own retrocession covers.In small special lines of business,forwhich retrocession cover was not available at reasonable terms and condi-tions,we systematically reduced our previous covers.Innovative
309、Business SolutionsThis section supports the divisional units in developing innovative businessmodels and is a centre of competence for Munich Res e-business strategy.Its work is currently focusing on knowledge management and the use of web-based customer relationship management to expand and enhance
310、 our busi-ness relations.C Co od de eR Re ed d,a sophisticatedmalicious computer program,attacks systems connected tothe Internet.Countless ITspecialists attempt to keepthe damage to a minimum andstop it spreading.Damage isestimated at US$2.62bn.1 19 9t th h J Ju ul ly y 2 20 00 01 105 MANAGEMENT RE
311、PORT/PRIMARY INSURANCE40HOW IS THE MARKET ENVIRONMENT DEVELOPING IN PRIMARY INSURANCEAND WHAT ARE THE IMPLICATIONS FOR MUNICH RE?!_Our primary insurance business is clearly focused on insur-ances of the person.In this segment,the market environmentin most European countries is characterized by the w
312、eaknessof state security systems in the face of demographic trends.This situation continues to result in a high demand for privateprovision.In such an environment,the growth potential for ourGroups life,health and personal accident insurers is substan-tial.We are utilizing these opportunities by sys
313、tematicallyexpanding our various distribution channels and developingappropriate products.A current example is the“Riester pen-sion”in Germany,where we have been able to translate ourstrengths in product design and distribution into a substantialincrease in market share.But it is not only provision
314、for old age that presents us withgreat challenges developments in healthcare are also openingup new avenues.Here,though,the environment is still beingshaped more strongly by individual state regulation.Ouranswer in this case is to offer financeable solutions throughthe expansion of consistent health
315、care management.The concept of“financeability”immediately raises the issue ofcapital market trends:the recent volatility in the markets hasnaturally made life more difficult for us.But even this can beturned into an opportunity.We have been able to keep theinvestment results of our companies relativ
316、ely stable.Thatgives us a good platform.Dr.Detlef Schneidawind,Member of the Board of ManagementPrimary insurance2001Prev.yearGross premiumsbn15.714.4Loss ratio property-casualty%64.960.6Expense ratio property-casualty%36.536.6Combined ratio property-casualty%101.497.2Result before amortization of g
317、oodwillm5551,342Investmentsbn103.6102.9Net underwriting provisionsbn87.487.305 MANAGEMENT REPORT/PRIMARY INSURANCE41Primary insuranceThe primary insurers in our Group write all forms of life and health insuranceand nearly all lines of property-casualty insurance.Our Group includes ERGO,Karlsruher an
318、d Europische Reiseversicherung.Our premiums from primary insurance in 2001 were up 9.0%(6.8%)to15.7bn(14.4bn),representing 43%(46%)of Group premium income.The result before tax,amortization of goodwill and minority interests inearnings deteriorated by 58.6%(+41.6%)to 555m(1,342m).Minority interests
319、exist mainly in the ERGO Insurance Group,in which MunichRe held a stake of 87.5%(62.9%)at 31st December 2001;since 15th January2002 this has been increased to 91.7%.Life and health71%(72%)of our premium income in primary insurance derives from life andhealth business,where we recorded premium growth
320、 of 7.9%(5.0%)in theyear under review.The Munich Re Group ranks among the top three German life insurers.Wesucceeded in improving our new business production by 5.9%in 2001 to1.5bn.The life insurers in the Group already began successfully exploitingsales opportunities presented by the German pension
321、 reform,with its intro-duction of a state-subsidized private component(“Riester pension”).Our premiums in life insurance climbed by 9.9%(4.1%)to 7.1bn(6.5bn),withforeign subsidiaries accounting for 1.1bn(0.4bn).Expenses for claims andbenefits fell by 9.3%(+17.2%).Operating expenses amounted to 640m,
322、andthe expense ratio to 10.3%In health insurance the Group was able to further extend its leading position inGermany and Europe.We again wrote a pleasing amount of new business andrecorded premium growth of 4.6%(6.7%)to 4.0bn(3.8bn),of which 0.6bn(0.5bn)came from abroad.Pressure on costs continued t
323、o be high.Property-casualtyOur growth in this sector was again strong,the Group expanding both withinGermany and in the rest of Europe.Thus our premium income rose altogetherby 11.7%(11.4%)to 4.6bn(4.1bn),to which the foreign subsidiaries con-tributed 1.3bn(0.9bn).Expenses for claims and benefits sh
324、owed a furtherincrease,but the combined ratio was still satisfactory.C Co om mp pr ro om mi is se e.Following acompromise proposal and anegotiation marathon,theKyoto Protocol is saved.Atthe Bonn climate summit thecommunity of nations adoptsan international agreementon climate protection forthe first
325、 time.2 23 3r rd d J Ju ul ly y 2 20 00 01 114.415.7199819992000200112.713.5Gross premiums in bn45(45)%Gross premiums by class ofbusiness26(27)%29(28)%LifeHealthProperty-casualty11(15)%Gross premiums from abroad bycountry6(8)%24(8)%14(21)%7(10)%14(19)%BelgiumUKItalyNetherlandsAustriaSpain/PortugalOt
326、hers24(19)%05 MANAGEMENT REPORT/PRIMARY INSURANCE42Reporting by subgroupIn reporting on our primary insurance operations,we will follow the structureof our subgroups,in each case referring to our subsidiaries individual orconsolidated financial statements for the year.By far the most important marke
327、t of our primary insurers is Germany,wherethey earned around 80%(87%)of their premium income.Their foreign premi-um income of 3.0bn(1.8bn)derived mainly from five markets;in order ofvolume these are Italy,the Netherlands,Spain/Portugal,Belgium and Austria.ERGO Insurance GroupERGO Insurance Group is
328、the second-largest primary insurance group in theGerman market.It was created in 1997 by merging VICTORIA,Hamburg-Mann-heimer,DKV and D.A.S.The main emphasis of ERGOs business,accountingfor approximately 90%of its premium income,is on personal lines insurance,especially insurances of the person.Anot
329、her important segment of its businessis insurance for small and medium-sized firms,whilst programmes for companypension insurance are also increasing in significance.In health insurance andlegal protection insurance,ERGO is the market leader in Europe through DKVand D.A.S.respectivelyERGO Insurance
330、Group*2001Prev.yearGross premiumsbn13.912.7Net premiumsbn12.011.1Profit for the yearm655804Investmentsbn89.388.8*Consolidated financial statements in accordance with IAS.ERGOs premium income rose by 9.9%(6.2%)in 2001.This growth wasprimarily due to life insurance and property-casualty business.The c
331、ompaniesBayerische Vita in Italy and ERGO Hestia in Poland,which were acquired in thesecond half of 2000,contributed substantially to the dynamic premium growth.Both companies have been consolidated for the first time for a full year in ourfinancial statements for 2001.The result before amortization
332、 of goodwill fell by 64.1%(+39.3%)to 0.4bn(1.2bn).ERGOs profit for the year amounted to 655m(804m),or 18.5%lessthan in the excellent business year 2000.As a result of tax rate changes,anumber of deferred tax items had to be reversed,resulting in net income of325m(246m).Impacted by the weak stock mar
333、kets,ERGOs investments grew by only 0.5%(4.4%)to 89.3bn(88.8bn).The profit on investments decreased by 29.7%(+36.8%)to 5.1bn(7.2bn)a consequence of the difficult situation on thecapital markets,which led to fewer capital gains being realized in the course of the year than originally planned.The ERGO Groups shareholders equity amounted to 6.0bn(6.3bn)at the endof the year under review.This decrease
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