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1、 Group Annual Report 2023 Munich Re Key figures(IFRS)1 Munich Re at a glance 2023 2022 2021 2020 2019 Insurance revenue from insurance contracts issued m 57884 55385 Claims expenses m 41481 40393 Administration and acquisition costs m 8617 7807 Total technical result m 7545 7070 Operating result m 5

2、702 6812 3517 1986 3430 Taxes on income m 936 1324 552 269 483 Net result m 4597 5309 2932 1211 2707 Earnings per share2 3388 3812 2093 863 1897 Return on equity(RoE)3%157 202 126 53 117 Return on investment(RoI)%25 13 28 30 32 Dividend per share4 1500 1160 1100 980 980 Dividend payout4 m 2009 1583

3、1541 1373 1373 Share price at 31 December 37510 30400 26050 24280 26300 Munich Reinsurance Companys market capitalisation at 31 December bn 512 426 365 340 380 Carrying amount per share 22029 19683 22006 21338 21532 Investments m 218462 207965 240300 232950 228764 Investments for unit-linked life in

4、surance m 8280 7470 8582 7544 7726 Equity m 29772 27245 30945 29994 30576 Insurance contracts issued and reinsurance contracts held(net)m 203383 195454 Balance sheet total m 273793 269391 312405 297946 287553 Staff at 31 December 42812 41389 39281 39642 39662 Reinsurance 2023 2022 2021 2020 2019 Ins

5、urance revenue from insurance contracts issued m 37786 36489 Investments m 90387 84615 99617 91248 91069 Insurance contracts issued and reinsurance contracts held(net)m 69575 66100 Major losses(net)m 3278 3741 4304 4689 3124 Natural catastrophe losses m 2335 2118 3139 906 2053 Combined ratio propert

6、y-casualty%852 832 996 1056 1002 Investment result m 2432 1309 3422 3193 3318 Net result m 3876 4737 2328 694 2268 Thereof:Reinsurance Life and health m 1428 1314 325 123 706 Thereof:Reinsurance Property-casualty m 2448 3423 2003 571 1562 Return on equity(RoE)5%162 222 134 41 133 ERGO 2023 2022 2021

7、 2020 2019 Insurance revenue from insurance contracts issued m 20098 18896 Investments(including Investments for unit-linked life insurance)m 136355 130820 149265 149245 145421 Insurance contracts issued and reinsurance contracts held(net)m 133808 129354 Combined ratio property-casualty Germany%889

8、903 924 924 923 Combined ratio International%901 955 929 927 943 Investment result m 2942 1674 3734 4206 4504 Net result m 721 572 605 517 440 Thereof:Life and Health Germany m 183 307 164 130 187 Thereof:Property-casualty Germany m 252 173 234 157 148 Thereof:International m 286 92 207 230 105 Retu

9、rn on equity(RoE)5%135 116 101 88 74 1 You can download this information as an Excel file;please refer to the Financial Supplement at information about the calculation of the 2022 figures,please refer to the Combined management report Business performance of the Group and overview of investment perf

10、ormance.The figures for 2019 to 2021 have not been adjusted in accordance with IFRS 9 and IFRS 17.Prior-year comparisons are therefore only possible to a limited extent.2 Earnings per share for 2022 before adjustment of the value due to changes in accounting standards amounted to 2463.3 We changed t

11、he calculation of RoE in 2020.4 Subject to approval by the Annual General Meeting.5 Since the publication of the Munich Re Group Ambition 2025 in December 2020,RoE is a target figure for our fields of business.Contents Group Annual Report 2023 1 Munich Re Group Annual Report 2023 Munich Re at a glan

12、ce Key figures(IFRS)Inside front cover Quarterly figures Inside back cover Important dates Back cover Letter to shareholders 3 Combined management report 9 Strategy 12 Tools of corporate management and strategic financial objectives 16 Macroeconomic and industry environment 19 Munich Re Group 20 Com

13、bined non-financial statement 25 Business performance 69 Financial position 85 Risk report 90 Opportunities report 104 Prospects 106 Munich Reinsurance Company(information reported on the basis of German accountancy rules)108 Corporate governance 115 Report of the Supervisory Board 117 Statement on

14、Corporate Governance 124 Consolidated financial statements and notes 143 Consolidated balance sheet 148 Consolidated income statement 150 Consolidated statement of comprehensive income 151 Consolidated statement of changes in equity 152 Consolidated cash flow statement 154 Notes 155 Independent audi

15、tors report 316 Independent auditors report on a limited assurance engagement 325 Responsibility statement 327 Imprint/Service 328 More detailed lists of contents are provided on the pages separating the individual sections.Due to rounding,there may be minor deviations in summations and in the calcu

16、lation of percentages in this report.This document is a translation of the original German version and is intended to be used for informational purposes only.While every effort has been made to ensure the accuracy and completeness of the translation,please note that the German original is binding.To

17、 our shareholders 3 Munich Re Group Annual Report 2023 Last year was very good for Munich Re.We managed to surpass our profit target for the third consecutive year.With a net result of 4.6bn,your company earned 600m more than we had initially planned for 2023.We would like you to benefit accordingly

18、 from this success,as in years past.Subject to approval by the Annual General Meeting,the dividend will be significantly increased by 3.40 to 15 per share raising the bar to a new level.We have also approved a new,larger share buy-back with a volume of 1.5bn.The year 2023 thus marks the latest pinna

19、cle in the creation of value on behalf of our shareholders.After all,we have returned 22.9bn of capital to our shareholders in the form of dividends and share buy-backs over the past ten years.That is an average of 2.29bn every year.Our balance sheet and capital position remain very strong.Hence all

20、 strategic and financial options with regard to growth,investments,and dividend payouts are open to us.Our solvency ratio of 267%remains above the optimum range.We are just past the halfway point of our five-year Ambition 2025 strategic programme,which defines our medium-term financial targets for t

21、he financial years 20212025.While maintaining a sound capital base,by the end of 2025 we aim to achieve a return on equity of 1416%and boost both earnings per share and the dividend by an average of at least 5%annually.Our return on equity in 2023 already amounted to 15.7%.Since 2021,earnings per sh

22、are have grown annually by almost 20%on average.Our dividend has increased by an average of about 15%each year in the same period.Dr.Joachim Wenning Chair of Munich Reinsurance Companys Board of Management To our shareholders 4 Munich Re Group Annual Report 2023 The capital markets have been rewardi

23、ng our excellent performance.During the first three years of Ambition 2025,our share price rose by almost 60%.During that same period,the German stock market index(DAX)increased by only 22%.Whats more,Munich Res share price topped 400 for the first time ever in 2023,for a new historical high.In term

24、s of total shareholder return,which comprises income from share price increases and dividends,we have further extended our lead over the competition over a span of several years.Of the eight leading reinsurers and primary insurers in Europe,none has created more value for shareholders in the 2020s t

25、han Munich Re.Our Group is in excellent shape but the world is not.Recent years have been marred by a multitude of simultaneous major crises,which have taken a toll on the insurance industry,too.Our planning phase for Ambition 2025 coincided with the first year of the COVID-19 pandemic,which subsequ

26、ently impacted us heavily in 2021,the initial year of our five-year strategy programme.War then broke out in Ukraine in 2022,unleashing economic turbulence in the form of volatile capital markets,extreme rates of inflation and an abrupt rise in interest rates.These new and immediate threats nearly o

27、vershadowed climate change despite devastating natural disasters plaguing the planet,such as the flooding in Germanys Ahr valley in summer 2021 and Hurricane Ian in the United States in autumn 2022.The year 2023 was sadly no exception,particularly in the wake of the earthquake in Turkey and Syria.So

28、me 74,000 people lost their lives in natural disasters last year,far exceeding the long-term average.While inflation eased considerably last year,it remains far above the target rate associated with price stability.Geopolitical tensions rose anew in 2023,with the escalation in the Middle East being

29、the latest example.People in Ukraine have been enduring destruction and suffering for over two years.And then there is the perennial crisis regarding Taiwan between global superpowers China and the United States.Any one of these wars or conflicts could spread beyond its current boundaries,erupting i

30、nto something with an unforeseeable outcome as well as massive humanitarian and economic consequences.There is a significant amount of uncertainty.We have coped well with all of the above-mentioned external shocks so far.Atop a solid foundation,Munich Re reliably generates high income.By resolutely

31、expanding lines of business with less volatile earnings profiles including ERGO,life reinsurance and Global Specialty Insurance,our newest division and buoyed by our unrelenting commitment to performance,we have made our Group robust against fluctuations in both property-casualty reinsurance and inv

32、estments.To our shareholders 5 Munich Re Group Annual Report 2023 In 2023,the ERGO field of business achieved its annual target by generating a net result of around 720m.In international business,ERGO earned much more insurance revenue than in 2022 chiefly due to growth in property-casualty insuranc

33、e business in Poland and the good performance of health business in Belgium and Spain.In addition,the full consolidation of ERGOs property-casualty business in Thailand also helped boost insurance revenue.Insurance revenue likewise rose in the Property-casualty Germany segment,particularly on accoun

34、t of third-party liability and motor insurance business.In the ERGO Life and Health Germany segment,supplementary and travel insurance in particular contributed to renewed revenue growth.Moreover,demand remained high for biometric risk cover and capital-efficient investment solutions.ERGOs altogethe

35、r positive business development is reflected on the customer side,too.Regular surveys indicate that customer satisfaction has improved in recent years,and 2023 was no exception.Customers awarded ERGO the highest scores for the processing of insurance claims and policy benefits.Our reinsurance field

36、of business achieved a result of about 3.9bn in 2023.The property-casualty reinsurance segment was again impacted by high natural catastrophe losses.A relatively low-impact hurricane season notwithstanding,insured losses from natural catastrophes totalled US$95bn;the ten-year annual average amounts

37、to US$90bn.Conversely,we benefitted from the ongoing hard market.Not only did we achieve higher margins;we also managed to further grow our business.The new Global Specialty Insurance(GSI)division,established in 2023,helped to boost both our insurance revenue and net result.In addition,life and heal

38、th reinsurance business continued to develop very favourably as regards both the assumption of biometric risks and financially motivated reinsurance solutions particularly those that provide financing and capital relief for cedants.This segments total technical result amounted to just over 1.4bn,far

39、 outperforming the initial guidance of 1.0bn.Our reinsurance clients hold us in high esteem.We have performed better and better for years now on our net promoter score,which is an industry-wide gauge of client satisfaction that we calculate every two years as part of our worldwide client survey.In s

40、hort,we excel thanks to our reliability,predictability,consistency in action,and our dependability in making solid capacity available.To our shareholders 6 Munich Re Group Annual Report 2023 The excellent business developments in(re)insurance have granted us additional investment flexibility.We deli

41、berately realised losses on the disposal of fixed-interest securities in 2023 in order to benefit more quickly from higher interest rates upon reinvestment,thus boosting future investment income.As a result,the reinvestment yield rose from 2.8%in 2022 to 4.5%in 2023,with the return on investment imp

42、roving from 2.1%to 2.5%.In short,Munich Re is in an outstanding position to fully meet all its Ambition 2025 targets.Momentum remains positive this year,with the January 2024 renewals sustaining the years-long trend of gratifying treaty renewals.As a result,we managed to keep profitability levels hi

43、gh and prices stable overall.Premium growth amounted to 3.5%;we wrote more business only when we could tap into attractive opportunities.We also actively discontinued business that no longer met our expectations with regard to pricing or conditions.In light of sustained good business performance,we

44、want to further grow our net result.Our profit target for 2024 is 5bn.We expect the Groups insurance revenue to total 59bn and the return on investment to improve markedly,surpassing 2.8%.In addition to the pursuit of financial success,fundamental components of our business activities include enviro

45、nmental,social and corporate governance(ESG)considerations.We strive to meet our ESG targets with the same determination with which we pursue our financial objectives.In this context,we devote ourselves to two matters in particular as part of our Ambition 2025 programme:increasing the percentage of

46、women in management and decarbonising our investment and insurance portfolios.Thanks to continual improvements over the past three years,we have nearly met the target we set ourselves for 2025,i.e.40%of management positions within the Group being held by women.By the end of 2023,this figure had reac

47、hed 39.5%.We also made considerable progress last year on decarbonisation.In our insurance business,greenhouse gas emissions from coal-fired power plants and from thermal coal production facilities have each decreased by 41%compared with the 2019 base year,while emissions from oil and gas production

48、 associated with our property insurance business have been reduced by as much as 80%.For our investments,the reduction remained high,at 47%.We once again expanded our investments in renewable energies,significantly boosting our investment volume from 2.4bn in 2022 to 3.1bn in 2023.To our shareholder

49、s 7 Munich Re Group Annual Report 2023 Simply put,the first three years of the five-year Ambition 2025 programme have been very encouraging in every regard.Our nearly 43,000 staff members worldwide will keep on working hard to ensure that Munich Re meets all its Ambition 2025 commitments by the end

50、of next year.We are all optimistic that we will succeed.I wish to thank you,dear shareholders,for the trust you place in our Group.Yours sincerely,Joachim Wenning To our shareholders 8 Munich Re Group Annual Report 2023 9 Combined management report Combined management report 10 Contents This report

51、combines the management reports of Munich Reinsurance Company and Munich Re.Strategy 12 Scale 12 Shape 12 Succeed 12 Tools of corporate management and strategic financial objectives 16 Munich Res management philosophy Based on value creation 16 The Groups corporate management tools 16 Strategic fina

52、ncial objectives as part of the Munich Re Group Ambition 2025 17 Macroeconomic and industry environment 19 Capital markets 19 Insurance industry 19 Munich Re Group 20 Group structure 20 Our brands 24 Combined non-financial statement 25 Sustainability in investment and insurance 25 Environmental mana

53、gement in own operations 43 Human rights 46 Employee matters 48 Governance 53 Further details 58 About this statement 60 Business performance 69 Overall assessment by the Board of Management on the business performance and situation of the Group 69 Comparison of the prospects for 2023 with the resul

54、t achieved 70 Business performance of the Group and overview of investment performance 72 Reinsurance Life and health 76 Reinsurance Property-casualty 78 ERGO Life and Health Germany 81 ERGO Property-casualty Germany 83 ERGO International 84 Combined management report 11 Contents Financial position

55、85 Analysis of our capital structure 85 Insurance liabilities 85 Restraints on disposal 86 Capital position 86 Information in accordance with Sections 315a and 289a of the German Commercial Code(HGB)and explanatory report by the Board of Management 86 Analysis of the consolidated cash flow statement

56、 88 Risk report 90 Risk governance and risk management system 90 Significant risks 92 Solvency ratio under Solvency II 99 Other risks 99 Assessment of the risk situation 101 Further risk figures 102 Opportunities report 104 Business environment 104 Digital transformation 104 Social trends 105 Climat

57、e change and natural catastrophes 105 Expanding the limits of insurability 105 Prospects 106 Outlook 2024 106 Munich Reinsurance Company(information reported on the basis of German accountancy rules)108 Market environment and major factors of influence 108 Business performance 108 Financial position

58、 112 Statement on Corporate Governance for the 2023 financial year pursuant to Section 289f and Section 315d of the German Commercial Code(HGB)113 Further information 113 Combined management report 12 Strategy Munich Re Group Annual Report 2023 Strategy Munich Re operates an integrated business mode

59、l that combines primary insurance and reinsurance.This model enables us to pool our industry-wide areas of expertise,share underlying know-how and data,and leverage synergies through risk diversification.At the core of our business model,Munich Re is the risk carrier along the entire insurance value

60、 chain.We are happy to expand our primary insurance activities on the basis of their stable earnings and have a strategic interest in new business models.We prefer organic growth,but will engage in selected M&A activities in line with our strategic preferences.Our active,integrated capital managemen

61、t and risk management across the Group helps to create economic value for our shareholders,while safeguarding the fulfilment of our obligations towards clients and policyholders as well as protecting the reputation of Munich Re.Our strategy follows the three guiding principles of Scale,Shape,and Suc

62、ceed,which are key pillars of the Munich Re Group Ambition 2025.Scale Scale represents growth in the Groups core business.There are opportunities for organic growth,particularly in reinsurance and specialty primary insurance within reinsurance,owing to recent improvements in market conditions.In ass

63、et management,we want to enhance performance and further optimise our risk-return profile in a setting characterised by higher interest rates.Shape Shape stands for Munich Res mission to develop new business models that are aligned with our core business throughout the value chain,in turn shaping ma

64、rkets.In this environment,innovative and digital solutions will give rise to additional business opportunities.Succeed Succeed symbolises the added value that Munich Re generates for all its stakeholders.For shareholders,this means the sustained financial success of their investments in Munich Re.Cl

65、ients benefit from bespoke products.And for staff,Succeed connotes appealing long-term employment and good career prospects.A particular priority concerns women in management:by 2025,40%of managers below the Board of Management are to be women.Last but not least,Succeed allows communities to benefit

66、 from,in particular,the Groups climate targets in its asset management,(re)insurance business and in its own business operations.The success of the Munich Re Group Ambition 2025 is measured using the following financial and non-financial targets:Our pledge to shareholders Improved RoE,2025 EPS growt

67、h1 DPS growth1,2 Solvency II ratio in optimal range 1416%5%5%175220%Decarbonisation targets for thermal coal,oil and natural gas 1 Average annual growth rate 20232025 based on the outlook for 2023.2 In addition:dividend floor of at least previous years DPS.We want to generate an attractive return on

68、 equity(RoE)1 which,following the application of new IFRS reporting standards,should be between 14%and 16%by 2025.The higher RoE achieved in the course of the strategy period to 1 Further information about this indicator is provided in the Combined management report Tools of corporate management and

69、 strategic financial objectives.2025,compared to our previous financial targets and after taking into account the new IFRS standards,will result from increased profitability,growth,and an improved return on investment.Combined management report 13 Strategy Munich Re Group Annual Report 2023 Continue

70、d earnings growth is poised to translate into higher earnings per share,with a targeted average annual rise of 5%or more by 2025.The implicit dividend commitment of recent decades is now an explicit target of the Munich Re Group Ambition 2025:in“normal”years,the dividend per share is to rise by 5%or

71、 more on average,similarly to the increase in earnings per share.In years with unusually high claims expenditure,it is expected that the dividend per share will at least remain the same.We consider the optimum range for the solvency ratio to be 175%to 220%.As an environmentally conscientious busines

72、s,Munich Re endeavours to play its part in meeting the targets of the Paris Agreement.The Group has therefore set itself medium-and long-term decarbonisation targets for its investments,its(re)insurance transactions and its own business operations.The description of our Climate Ambition provided her

73、e is a brief summary.All details are presented in the Combined management report Combined non-financial statement.Munich Re Group Ambition 2025 and beyond 2023 2025 Long term Investments Financed GHG emissions1 Target Target No direct investments in listed companies that generate 15%revenue from the

74、rmal coal2 10%revenue from oil sands Thermal coal7 35%emissions Oil and gas7 25%emissions Total7 25%to 29%emissions Thermal coal Full phase-out by 2040 Total Net-zero emissions by 2050 Oil and gas companies3 No new direct investments in exclusively oil and gas companies4 Commitment to net zero by in

75、tegrated oil and gas companies from 2025 required5 No direct illiquid investments in new oil and gas fields,midstream oil infrastructure or oil-fired power plants6 Insurance Insurance-related GHG emissions8 Target Target Thermal coal No insurance of new coal mines,new power plants or related infrast

76、ructure9 Thermal coal 35%emissions12 Thermal coal Full phase-out by 2040(including treaty business)Oil and gas Exploration and production No insurance of new or existing oil sands sites or related infrastructure10,Arctic exposure or infrastructure11 No insurance of new oil and gas fields,midstream o

77、il infrastructure or oil-fired power plants6 Oil and gas 5%emissions13 Total Net-zero emissions by 2050 Combined management report 14 Strategy Munich Re Group Annual Report 2023 Own operations GHG emissions from business operations14 Target Target Group headquarters in Munich GHG net zero(through GH

78、G emissions removal certificates)All other recognised GHG emissions from the Groups business operations GHG-neutral(through GHG emissions reduction certificates)Total 12%emissions per employee Total Net-zero emissions by 2030 All greenhouse gas(GHG)emissions are measured in CO2 equivalents(CO2e).Bas

79、e year for all target and achievement figures is 2019.Exceptions to the guidelines can only be approved by Board of Management committees.1 Scope 1 and 2.2 Exceptions are possible in individual cases for companies with revenues in thermal coal between 1530%on the basis of an active engagement dialog

80、ue.3 Direct investments in equities or corporate bonds from listed oil and gas companies.4 Publicly traded companies listed under the Global Industry Classification Standard(GICS)Oil&Gas sub-industries with the exception of Integrated Oil&Gas.5 For companies with the highest relative and absolute em

81、issions.6 Applies to contracts/projects exclusively covering the planning,financing,construction or operation,which have not yet been under production(oil&gas fields)or construction or operation(infrastructure and facilities)as at 31 December 2022.7 Listed equities,corporate bonds and for total dire

82、ct real estate.8 Applies to primary insurance,direct and facultative(re)insurance business.9 For single-location stand-alone risks.10 For single-location stand-alone risks;for mixed covers above a certain threshold.11 For exclusive coverages also incl.treaty business;for mixed covers above a certain

83、 threshold.12 Metric tonnes of thermal coal produced annually by insureds/installed operational capacity(in megawatts)of insured coal-fired power plants of insureds (used as an equivalent for an approximate development of the GHG emissions of our insureds business).13 Operational property covers,sco

84、pe 13 life-cycle emissions.14 Scope 1,2 and 3(business trips,paper,water,waste).Our goal is to decarbonise our investment and(re)insurance portfolio,reaching net zero by 2050.We have committed to completely phase out the(re)insurance of thermal coal activities altogether in our primary insurance and

85、 facultative and direct(re)insurance business and in our investment portfolio by 2040.This includes reducing,in an intermediate step,our total scope 1 and 2 financed GHG emissions from listed equities,corporate bonds and direct real estate by 25%to 29%compared to the 2019 base year,by 2025.In 2019,M

86、unich Re stopped investing directly in listed companies that generate more than 30%of their earnings from thermal coal.Since 2021,companies that generate 15%to 30%of their earnings from thermal coal have also been excluded from our investment universe or,in individual cases,encouraged to reduce thei

87、r greenhouse gases in the context of an engagement dialogue.Direct investments in listed companies that generate more than 10%of their earnings from oil sands are also excluded.Munich Re set itself its own emissions-reduction targets in 2020 with respect to thermal coal and oil and gas production in

88、 our primary insurance and facultative and direct(re)insurance business.This also encompasses treaty-like business in the form of facultative facilities if it includes the option to decline individual risks.In an initial phase,we aim to reduce emissions from oil and gas production by 5%by 2025,compa

89、red to the base year 2019.Munich Re will also reduce its coal-related exposure in its direct and facultative insurance business by 35%Group-wide by 2025,compared to the base year 2019.Munich Re stopped insuring new coal-fired power plants and coal mines in 2018 and oil sands sites in 2019.Under the

90、Munich Re Group Ambition 2025,we also set targets regarding our own GHG emissions from business operations.GHG emissions are to be reduced by 12%per employee between the base year 2019 and 2025.Five years later,in 2030,our target is to achieve GHG net zero for the remaining GHG emissions from our ow

91、n operations.We will endeavour to offset these GHG emissions by purchasing certificates for projects that aim to remove GHGs from the atmosphere(GHG net zero).Reinsurance Munich Res strategic aim is to expand its position as a leading global reinsurer and,by means of Global Specialty Insurance,to fu

92、rther consolidate our success in specialty primary insurance business through our special underwriting expertise.Our reinsurance strategy likewise relies on the three pillars of Scale,Shape,Succeed which define measures for achieving overarching objectives.In traditional reinsurance,Munich Re is par

93、ticipating in the marked expansion of significant markets.Growth areas in our core business include the expansion of the market position in developed markets in North America,Europe,Asia and Australia with a focus on risk expertise and underwriting quality.In the emerging markets of Asia,the Middle

94、East and South America,Munich Re focuses on targeted growth,in particular by offering bespoke services and products for cedants.Combined management report 15 Strategy Munich Re Group Annual Report 2023 With regard to specialty primary insurance business within reinsurance,Munich Re focuses on North

95、America,the United Kingdom and Europe,and has set itself the goal of being one of the worlds leading specialty insurers by 2025.The bundling of activities in the division Global Specialty Insurance aims to bring about a stringent market and broker strategy,as well as the consistent management of uni

96、ts that previously operated independently,such as American Modern Insurance Group Inc.(American Modern),the Hartford Steam Boiler Inspection and Insurance Company(HSB),Munich Re Specialty Insurance(MRSI),Munich Re Syndicate and Aerospace,and Great Lakes Insurance SE(GLISE).In this regard,Munich Res

97、goals are to create synergies in underwriting,sales and digitalisation,while also more effectively addressing the increased regulatory requirements for primary insurance business through its new positioning.Munich Res long-term competitiveness in traditional reinsurance and speciality primary insura

98、nce is particularly sustained by excellence in operations,the development of new product solutions,and the pursuit of new strategic options in our business activities.The focus of the excellence initiatives is on first-class underwriting and risk management at the highest level,practised client orie

99、ntation and outstanding client management,agile and efficient processes,and the exploitation of synergies within the Group both in partnerships in product and market development,and in the use of service functions.Both traditional reinsurance and Global Specialty Insurance are constantly defining ne

100、w topic areas and solutions to further develop the business.For example,Munich Re is driving forward product innovations for cyber,flooding,parametric covers,credit insurance and financially motivated reinsurance by offering data-driven solutions and services under third-party brands,alongside its o

101、wn reinsurance covers.Data and AI are playing an increasingly important role in both specialty primary insurance and traditional reinsurance,principally in the form of AI-supported decision-making in reinsurance especially in underwriting and in terms of process automation and efficiency gains.Gener

102、ative AI in particular opens up new opportunities to harness the potential of external data using pre-trained models and enables the quality of internal data to be improved through AI-supported data management.In reinsurance,our AI approach is complemented by our data strategy,which enables data pro

103、ducts to be provided in line with the needs of our business units.Along with investing in innovation and digitalisation projects,the reinsurance field of business also operates as a venture capitalist.Beyond the objective of generating especially profitable returns on investment,the reinsurance fiel

104、d of business deploys venture capital to ensure the closest possible proximity to new technologies and emerging business models.ERGO ERGOs strategic aim is to continue growing profitably through 2025 and,as regards return on equity(RoE),to become one of the top primary insurers in Europe.To this end

105、,ERGOs portfolio of strategic measures likewise relies on the three pillars of Scale Shape Succeed,which define steps for achieving overarching objectives.One of ERGOs aims is to further improve its market position and profitability in Germany,with a focus on further developing its underwriting capa

106、bilities and resolutely driving forward end-to-end process excellence,while generating strong growth with partners in multi-level sales(B2B2C)and through purely direct offers,as well as reducing IT,sales and operating costs.In international business,ERGO concentrates on Europe and Asia,where high-gr

107、owth markets such as India,China and Thailand offer particularly promising opportunities.The ever-increasing changes in markets caused by digital transformation and new patterns of customer behaviour demand flexibility in both services and products.In this context,ERGO is focusing consistently on th

108、e needs of its customers,who are increasingly using traditional and digital channels in parallel when seeking advice and purchasing insurance products.The ongoing modernisation of IT infrastructures continues to play a key role here.In addition,ERGO is seeking a leading role in digitalisation by con

109、sistently driving forward traditional and generative AI,metaverse technology,robotics and voice technology,with an eye to continually enhancing customer experience.ERGO aims at further increasing its competitive strength by transferring technology-based solutions and enhancing cross-border synergies

110、.ERGO will continue to rely on external and internal resources in generating innovative business ideas to further expand the business model along the entire insurance value chain and unlock growth potential in the digital world.Combined management report 16 Tools of corporate management and strategi

111、c financial objectives Munich Re Group Annual Report 2023 Tools of corporate management and strategic financial objectives Munich Res management philosophy Based on value creation The aim of Munich Res entrepreneurial thinking and activity is to analyse risks from every conceivable angle and to asse

112、ss and diversify them,creating lasting value for shareholders,clients,and staff in relation to the risks assumed.This is the aim of our active capital management and the consistent application of value-and risk-based management systems.The framework for any business activity is our risk strategy,fro

113、m which we derive various limitations and reporting thresholds.Our economic capital resources,which we determine in accordance with the Solvency II supervisory regime,are a key element.We monitor a range of important additional conditions.These include national accounting regulations,tax aspects,liq

114、uidity requirements,supervisory parameters,and rating agency requirements.Our value-based management is characterised by the following aspects:Risk capital,i.e.the capital required to cover the risks,is the basis of our value-and risk-based management.The capital requirement corresponds to the solve

115、ncy capital requirement under Solvency II,as determined on the basis of our certified internal risk model.Information on the internal model is provided in the Risk report Risk governance and risk management system Risks depicted in the internal model.Consequently,business activities are assessed not

116、 only according to their earnings potential,but also relative to the extent of the risks assumed.Only the risk-return relationship reveals how beneficial an activity is from the point of view of our shareholders.With value-based corporate management tools,we ensure an economic valuation and the comp

117、arability of alternative initiatives.Contrasting aspects have to be evaluated when selecting suitable target figures.On the one hand,the often-complex economic environment should be reflected as realistically as possible in order to emphasise added value as the Groups overriding guiding principle.On

118、 the other hand,targets should be straightforward and understandable for investors,staff,and the public.The Groups corporate management tools Our key corporate management tools at Group level are economic earnings and the IFRS net result.Together with the other performance indicators,they constitute

119、 the most important financial indicators of relevance for us.With the introduction of IFRS 9 and IFRS 17,the Groups IFRS accounting provides a more accurate reflection of economic earnings,and therefore,greater transparency for our stakeholders.Economic earnings The starting point for value-based ma

120、nagement is the economic value added,which we determine based on the key corporate management tool of economic earnings.These earnings correspond with the change in eligible own funds under Solvency II,adjusted for items that do not represent economic value added such as capital measures,and the cha

121、nge in regulatory restrictions.In particular,economic earnings comprise the contribution to profits from our new business,and changes in the value of in-force business against the previous years assessment on account of technical factors.The development of eligible own funds is also considered becau

122、se of the effect of capital market parameters on the assets and liabilities sides of the solvency balance sheet.With respect to the management of economic value added,we use conceptually consistent value-based and risk-capital-based measurement approaches that are individually geared to the characte

123、ristics of each respective field of business.Our approach for property-casualty reinsurance is based on the adjusted result,which comprises the anticipated discounted cash flows of underwriting and an adjustment for major claims.In life and health reinsurance,we apply value added by new business and

124、 the change in value of in-force business,which are based on the solvency balance sheet.As part of our asset-liability management,Combined management report 17 Tools of corporate management and strategic financial objectives Munich Re Group Annual Report 2023 we consider the excess return from our i

125、nvestment operations in reinsurance.The management tool of economic earnings is used directly for ERGO.IFRS net result We use the IFRS net result as a standardised,accounting-based benchmark for the Group and its fields of business.The standardised approach of the IFRS net result makes it easier for

126、 outsiders to understand and interpret the information in it;as such,it is a pivotal part of our financial reporting in capital markets.Other performance indicators Insurance revenue from insurance contracts issued(insurance revenue)Insurance revenue is a key indicator for corporate growth,both at G

127、roup level and for the individual fields of business.However,increases in this performance metric are not an inherently meaningful target for our Group,as we must always consider revenue growth as it relates to the profitability of the business we write.Combined ratio The combined ratio is regularly

128、 posted for property-casualty business.Calculated as the percentage ratio of insurance service expenses and insurance revenue(both of which are net,i.e.after reinsurance cessions),the combined ratio is the sum of the loss ratio and the expense ratio.A combined ratio of 100%means that insurance reven

129、ue was sufficient to cover claims and costs.1 Given that the combined ratio takes into account the time value of money and the uncertainty of future cash flows,it can also be used to assess economic profitability.It is only of limited suitability for comparing the financial performance of competitor

130、s owing to differing calculation methods and portfolio mixes.Generally,we aim to keep the combined ratio as low as possible by means of good underwriting and claims management.1 Details on determining the combined ratio can be found in the Notes to the consolidated financial statements Explanatory i

131、nformation Segment disclosures 7 Alternative performance measures.Total technical result for life and health reinsurance Owing to the long-term nature of business in life and health reinsurance,the combined ratio used in property-casualty insurance is only of limited use in this segment.We therefore

132、 track and post the total technical result under IFRS 9 and IFRS 17 for life and health reinsurance.It consistently combines underwriting business with insurance-related financial instruments and,with effect from this reporting year,supersedes the“technical result including the result from reinsuran

133、ce contracts with non-significant risk transfer”under IFRS 4.Return on investment(RoI)This is a key indicator of investment performance for Munich Re,on the basis of external reporting.It is derived from the investment result and the average market value of our investment portfolio including off-bal

134、ance-sheet unrealised gains and losses.2 Strategic financial objectives as part of the Munich Re Group Ambition 2025 Munich Re publishes further performance indicators within the framework of its multi-year result ambition.Given the longer time horizon of several years and the correspondingly greate

135、r uncertainties,the result targets published for these performance indicators take the form of anticipated corridors or minimum targets only.You can find details of the objectives for the key indicators given here for the Munich Re Group Ambition 2025 under“Strategy”.3 2 The calculation of the RoI i

136、s described in the investment result table under Business performance Business performance of the Group and overview of investment performance.3 Information on the non-financial targets of the Munich Re Group Ambition 2025 can also be found in the Combined management report Strategy.Combined managem

137、ent report 18 Tools of corporate management and strategic financial objectives Munich Re Group Annual Report 2023 Return on equity(RoE)The RoE is an important profitability KPI,which is of relevance in particular in the medium term.It is calculated on the basis of the IFRS result in relation to the

138、average IFRS equity at the beginning and end of the year.IFRS equity is adjusted in particular for the fair value reserve,the foreign currency translation reserve,the insurance finance reserve(from the measurement of insurance contracts)and the reserve from hedging relationships.Further adjustments

139、are made to eliminate distortions attributable to intra-Group transactions.The RoE is significantly influenced by the IFRS result.IFRS equity is affected by profits as well as by capital measures such as dividend payments and share buy-backs,in particular.The RoE is recognised for the Group and for

140、the reinsurance and ERGO fields of business.The calculation of the return on equity and the adjustments applied to average equity remain unaffected by the introduction of IFRS 9 and IFRS 17.Earnings per share The earnings per share figure reflects the IFRS net result for a year in relation to the av

141、erage number of outstanding shares at the beginning and end of the year.The earnings per share is primarily influenced by the IFRS net result.The number of outstanding shares can change as a result of share buy-backs or other capital measures.Further information on the earnings per share is availabl

142、e in the Notes to the consolidated financial statements Explanatory information Other information 66 Earnings per share.Dividend per share The dividend per share reflects the dividends paid for one year in relation to the number of dividend-bearing shares.The number of shares can change as a result

143、of share buy-backs or other capital measures.Solvency ratio under Solvency II The solvency ratio under Solvency II is the ratio of the eligible own funds to the solvency capital requirement.Information on solvency capital requirements and eligible own funds is available in the Risk report.Combined m

144、anagement report 19 Macroeconomic and industry environment Munich Re Group Annual Report 2023 Macroeconomic and industry environment Global economic growth weakened slightly in 2023,owing mainly to high inflation and restrictive monetary policy.Economic momentum waned considerably,particularly in Eu

145、rope.By contrast,the US economy remained surprisingly strong,and Chinas economy grew faster year on year following the lifting of COVID-19 restrictions.Rates of inflation fell thanks to lower energy prices,but average inflation rates for the year were still significantly above the long-term average

146、in many countries.Capital markets In response to persistently high inflation,key central banks further tightened monetary policy in 2023.Over the course of the year,the Federal Reserve in the United States raised its policy rate by 100 basis points,with the target range for the federal funds rate at

147、 5.25%to 5.5%in December 2023.In addition,it further reduced its securities holdings.The European Central Bank raised its interest rate on the main refinancing operations from 2.5%to 4.5%.It also began reducing its securities holdings,a product of the asset purchasing programme it launched in 2014.Y

148、ields on ten-year government bonds in the United States and Germany reached their highest levels in years in 2023.Growing expectations that central banks would soon cut rates,however,contributed to a drop in yields in Q4.By the end of December,yields on US bonds had returned to the same level as at

149、the beginning of the year,while those on German bonds were down slightly.Yields on ten-year government bonds%31122023 31122022 USA 39 39 Germany 20 26 In the reporting year,international financial markets were generally less volatile than in the previous year,with the exception of a brief period of

150、increased volatility in March caused by problems in the US banking sector.Important equity indices rose significantly in 2023,including the US Dow Jones Industrial Average and the EURO STOXX 50.Equity markets 31122023 31122022 EURO STOXX 50 4522 3794 Dow Jones Industrial Average 37690 33122 On the c

151、urrency markets,fluctuations were also less pronounced in 2023 than in the previous year.At the end of December,the US dollar and Canadian dollar were somewhat lower against the euro,while the Japanese yen was significantly lower.The pound sterling was up against the euro.The annual average values a

152、gainst the euro,however,were lower in 2023 than in 2022 for the above-mentioned currencies.At 0.92,the average value of the US dollar in the reporting year was slightly lower than in the previous year(0.95).Insurance industry According to current extrapolations,premium income in the German insurance

153、 sector saw only weak growth in 2023.While premium income growth in property-casualty insurance was above the long-term average,life insurance premiums decreased due to a further slump in single premiums.On a global level,a number of major property-casualty primary insurance markets experienced stro

154、ng growth in 2023 resulting in a substantial increase in global premium income,even when adjusted for high inflation.Overall,the trend toward higher prices continued in the renewal rounds for property-casualty reinsurance contracts.However,this trend varied significantly among regions and classes of

155、 business depending on claims experience,loss expectations and the individual market situation.Combined management report 20 Munich Re Group Munich Re Group Annual Report 2023 Munich Re Group Munich Re is one of the worlds leading risk carriers and provides both insurance and reinsurance under one r

156、oof.This enables the Group to cover large stretches of the value chain in the risk market.Almost all reinsurance units operate under the uniform brand of Munich Re.The ERGO Group(ERGO)is active in nearly all lines of life,health and property-casualty insurance.The majority of Munich Res investments

157、are managed by MEAG,which also offers its expertise to private and institutional investors outside the Group.For up-to-date information about Munich Re,visit .Group structure The reinsurance companies of the Group operate globally and in virtually all classes of business.Munich Re offers a full rang

158、e of products,from traditional reinsurance to innovative solutions for risk assumption.Our companies conduct their business from their respective headquarters and via a large number of branches,subsidiaries and affiliated companies.Additionally,the reinsurance group includes specialty primary insure

159、rs,whose business requires special competence in finding appropriate solutions.In ERGO,we combine Munich Res primary insurance activities.Some 67%of ERGOs insurance revenue derives from Germany,and 33%from international business mainly from central and eastern European countries.ERGO also operates i

160、n Asian markets,particularly in India,China,and Thailand.MEAG comprises MEAG MUNICH ERGO AssetManagement GmbH which manages financial and property portfolios and provides investment consultancy exclusively for Munich Re Group companies and MEAG MUNICH ERGO Kapitalanlagegesellschaft mbH,which manages

161、 segregated and retail funds with varying investment focuses and renders bespoke investment management services for non-Group institutional investors outside the USA.Overview Combined management report 21 Munich Re Group Munich Re Group Annual Report 2023 Munich Reinsurance Company and ERGO Group AG

162、 are under unified control within the meaning of the German Stock Corporation Act(AktG).The relevant statutory regulations,control agreements and Group directives govern the distribution of responsibilities and competences for key decisions between Group management and ERGO.Control and profit-transf

163、er agreements are in place with many Group companies,especially between ERGO Group AG and its subsidiaries.Reinsurance In reinsurance,we operate in life,health and property-casualty business.Under reinsurance,we include not only specialised primary insurance activities that are handled by the reinsu

164、rance organisation but also business from managing general agents.Organisationally,we have pooled worldwide IoT activities into the divisional unit Global IoT.As reinsurers,we write our business in direct collaboration with primary insurers,via brokers and within the framework of strategic partnersh

165、ips.In addition to traditional reinsurance business,we further operate as a primary insurer,participating in insurance pools,public-private partnerships and business in specialist niche segments.We furthermore offer our clients a wide range of special products as well as customised insurance solutio

166、ns and services,which we manage from within our reinsurance organisation.Our clients thus have direct access to the expertise,innovative strength and capacity of a leading global risk carrier.Thanks to our capital management know-how,we are in demand as a partner for products geared to our clients b

167、alance-sheet,solvency and rating-capital requirements,as well as their risk models.Focus of life and health reinsurance operations We bundle our life and health reinsurance business worldwide in the life and health segment.This is split into three geographical regions,and an international unit(Marke

168、ts)that offers specialised solutions for hedging capital market risks.This division focuses on traditional reinsurance solutions primarily geared to the transfer of insurance risks,mortality risk accounting for the largest share of this.Moreover,we are active in the market for living benefits produc

169、ts.These include insurance products for occupational disability,long-term care,and critical illness.We also provide capacity for longevity risks.Combined management report 22 Munich Re Group Munich Re Group Annual Report 2023 In addition,we support our customers with a wide range of services along l

170、arge stretches of the value chain.These include the development of new insurance products as well as digital and automated solutions for risk assessment and claims handling.Alongside conventional solutions for the coverage of insurance risks,we also offer our clients efficient and tailor-made struct

171、ured concepts to optimise their capitalisation,liquidity,or other key performance indicators.Our Markets unit combines our global expertise and range of services for capital market risks,which are often a component of savings products.We provide our clients with comprehensive advice on product desig

172、n while offering hedging for embedded options and guarantees linked to the capital markets.Our own exposure is transferred back to the capital markets.In order to ensure proximity to our clients,we are represented in many markets with local subsidiaries and branches.We service the extremely importan

173、t North American market via our Canadian branch and our subsidiary in the USA.In Europe,we have operations in Germany,the United Kingdom,Switzerland,Spain,Italy and Malta.We also operate subsidiaries in Australia and South Africa,and have a local presence in the key markets of South America,the Midd

174、le East and Asia.Asian business activities are centrally managed by a dedicated branch in Singapore,which underlines the strategic importance of this region for life and health reinsurance.The property-casualty reinsurance divisions The Global Clients and North America division handles our accounts

175、with major international insurance groups,globally operating Lloyds syndicates and Bermuda companies.It also pools our reinsurance know-how in the North American market for property-casualty business in particular that of our Munich Reinsurance America Inc.subsidiary domiciled there and for global l

176、arge-risk business,which is pooled in our Facultative&Corporate unit.Our Europe and Latin America division is responsible for property-casualty business with our clients from Europe,Latin America and the Caribbean.Business units for example,in London,Madrid,Paris and Milan afford us market proximity

177、 and regional competence.In the Latin American markets,our Brazilian subsidiary Munich Re do Brasil Resseguradora S.A.,which is headquartered in So Paulo,and our representative offices in Bogot and Mexico City help to ensure client proximity.Our Europe and Latin America division also includes the cr

178、edit business where Munich Re operates as a reinsurer and primary insurer and New Reinsurance Company Ltd.,which is domiciled in Zurich.The Asia Pacific and Africa division conducts property-casualty reinsurance business with our clients in Africa,Asia,Australia,New Zealand and the Pacific Islands.B

179、ranches in Mumbai,Beijing,Seoul,Singapore,and Tokyo,along with representative offices in Bangkok and Taipei,as well as a subsidiary in Sydney,allow us to take full advantage of opportunities in the rapidly growing Asia-Pacific insurance market.In the African market,we are represented by our subsidia

180、ry Munich Reinsurance Company of Africa Ltd.,headquartered in Johannesburg.These units and other representative offices guarantee our competitiveness in these key markets.The Global Specialty Insurance(GSI)division comprises worldwide special-lines business,such as marine,cyber,aviation and space,al

181、ong with specialty property-casualty business.The two large subsidiaries domiciled in the USA and operating in the field of specialised insurance activities HSB and American Modern are allocated to this division,as are Munich Re Specialty Insurance(MRSI),and Munich Re Specialty Group(MRSG).The GSI u

182、nits specialise in products for which like in reinsurance risk understanding as well as insightful claims handling are paramount.American Modern offers specialty personal lines products in the USA.MRSI offers various specialty commercial insurance products in the North American market.HSB is a leadi

183、ng provider of products that depend on expertise in engineering,loss control and risk management.MRSG,in turn,through use of the Munich Re Syndicate and other subsidiaries,is a leading provider of marine insurance and insurance solutions for the aviation industry.ERGO Munich Res second pillar is pri

184、mary insurance business.Three separate units operate under the umbrella of ERGO Group AG:ERGO Deutschland AG,ERGO International AG,and ERGO Technology&Services Management AG.German business is concentrated in ERGO Deutschland AG.ERGO International AG manages the ERGO Groups international business.ER

185、GO Technology&Services Management AG has a transnational mandate as a global technology and service provider for the entire ERGO Group.Since the start of 2024,a new division within ERGO Group AG has been responsible for Group marketing,global sales partnerships and all strategic digitalisation initi

186、atives,which were until recently handled by ERGO Digital Ventures AG.ERGO offers products in all the main classes of insurance:life insurance,health insurance,and in nearly all lines of property-casualty insurance,including travel insurance and legal protection insurance.With these products in combi

187、nation with the provision of assistance,other services and individual consultancy ERGO covers the needs of retail and corporate clients.ERGO serves some 39 million mostly retail customers in over 20 countries,with the focus on Europe and Asia.The latest information on ERGO can be found at .Combined

188、management report 23 Munich Re Group Munich Re Group Annual Report 2023 In Germany,the focus is on sustainable and profitable growth.ERGO Versicherung AG is one of the largest providers of property-casualty insurance across nearly all classes of business,offering a wide range of products for retail,

189、commercial and industrial clients.ERGO Vorsorge Lebensversicherung AG is ERGOs life insurer for capital-market-linked and biometric products.It offers solutions for all three types of old-age provision,mainly based on innovative and flexible unit-linked insurance products.ERGO Lebensversicherung AG

190、and Victoria Lebensversicherung AG are concentrating on running off their traditional life insurance portfolios.DKV Deutsche Krankenversicherung AG offers an extensive portfolio in the healthcare sector:comprehensive private health insurance,products designed to supplement statutory health cover,and

191、 company health insurance.ERGO Krankenversicherung AG focuses on products that supplement statutory health insurance,especially supplementary dental plans.The specialist travel insurer ERGO Reiseversicherung AG is a market leader internationally as well as in Germany.In Germany,ERGOs tied agents(age

192、ncy sales)and ERGO Pro(structured sales force)are bundled under one roof in ERGO Beratung und Vertrieb AG.The latter is managed by ERGO Deutschland AG together with direct sales.ERGO Deutschland AG manages its broker and partner sales in its Property-casualty,Health Germany and Life Germany division

193、s,depending on class of business.We developed all of our German sales organisations further in 2023 in particular with regard to digitalisation and implementation of the“hybrid customer”business model,which offers customers an essentially identical range of products via all online and offline channe

194、ls.ERGO is thus making integrated use of various channels such as face-to-face consultation,internet,online chat,email,telephone or even video consultation to leverage new potential.ERGO International AG coordinates and manages ERGOs international operations.The focus is on profitable organic growth

195、 in European core markets and selected growth markets in Asia.In the reporting year,ERGO International AG further advanced its business in core markets in Europe by growing in new fields of business and using new distribution models,thus maintaining its good position in the respective markets.ERGO I

196、nternational AG has operations in Asia,including in India,China and Thailand.In Thailand,ERGOs focus in 2023 was on the property insurance market,which is not only the largest in Southeast Asia but also shows good growth potential.By taking on a majority shareholding in ThaiSri Insurance Public Co.L

197、td.and acquiring Nam Seng Insurance Public Co.Ltd.at the beginning of January 2023,ERGO achieved an important milestone on its path towards expanding its market position in Thailand.In the course of the acquisition of a majority stake,ThaiSri Insurance Public Co.Ltd.was renamed ERGO Insurance(Thaila

198、nd)Public Co.Ltd.This rebranding is intended to give the ERGO marque greater visibility in this Southeast Asian country.The Indian joint venture HDFC ERGO General Insurance Company Ltd.performed strongly in the past year too,and improved its market position overall;it now ranks second in the private

199、 non-life insurance market.In China,ERGO increased its shareholding in the Chinese life insurance joint venture ERGO China Life Insurance Co.,Ltd.to 65%.This step emphasises the Groups ambition to establish itself in this strategically important market for the long term and to exploit its growing po

200、tential.In the Chinese property insurance market,ERGO is striving for further growth and a simultaneous boost in profitability through its stake in Taishan Property&Casualty Insurance Co.,Ltd.ERGO Technology&Services Management AG is a dedicated arm of ERGO Group AG in charge of providing digital pl

201、atforms,solutions and services.It has a global remit and supports ERGO in designing optimum insurance products and fostering the most effective customer channels.It consists of ITERGO GmbH in Germany,ERGO Technology&Services S.A.in Poland,and ERGO Technology&Services Private Limited in India.From 20

202、24,a newly created Board member division is responsible for ERGOs digital transformation within the ERGO Group.This also includes the coordination of established technologies such as robotics,artificial intelligence,voicebots,process mining and virtual reality,and the Embedded Insurance field of bus

203、iness,in which we collaborate with partners like Amazon and Coolblue.From 2024,ERGO Deutschland AG is responsible for controlling the operational business of the digital insurer nexible,ERGO Reiseversicherung AG and the ERGO Mobility Solutions division,for which ERGO Digital Ventures AG was previous

204、ly responsible.Combined management report 24 Munich Re Group Munich Re Group Annual Report 2023 Our brands The detailed breakdown of participations can be seen in the Notes to the consolidated financial statements List of shareholdings as at 31 December 2023 pursuant to Section 313(2)of the German C

205、ommercial Code(HGB).Combined management report 25 Combined non-financial statement Munich Re Group Annual Report 2023 Combined non-financial statement Munich Re pursues a sustainability strategy that is uniform across the Group.In our endeavours to contribute to a sustainable tomorrow,we regard econ

206、omic prosperity,resilience and technological progress as factors that are intrinsic to the creation of a just and sustainable society.Munich Res commitment to acting responsibly continues to serve as a cornerstone of our value-creation activities.As such,it is outlined in our Ambition 2025.To uphold

207、 this commitment,we utilise our collective experience and expertise,and work together with our external stakeholders to help drive an effective transformation.The main focus of our strategy is the further decarbonisation of our investments,our(re)insurance activities,and our own business operations.

208、You will find a complete description of our Group strategy and the required disclosures under Section 289c(3)and 315c(1)and(2)of the German Commercial Code(HGB),as well as further details about our Munich Re Group Ambition 2025,under“Strategy”.In the following statement we report on those sustainabi

209、lity issues which based on the materiality analysis performed are particularly relevant for Munich Re and its stakeholders,and we explain the corresponding goals,concepts and results in detail.Details about the materiality analysis can be found at the end of the combined non-financial statement.Sust

210、ainability in investment and insurance Investment Strategy and objectives As global investors,Munich Re is aware of its responsibility to conduct its activities sustainably,and we integrate ESG criteria into our investment policy.In addition,we have committed to moving our portfolio towards a net-ze

211、ro climate target by 2050.When choosing asset managers,we take their level of experience in ESG and integrating ESG aspects into account.All of our measures are aimed at identifying ESG-related risks and opportunities,and including them in our investment decisions.Munich Re was one of the first sign

212、atories of the Principles for Responsible Investment(PRI)and joined the Net-Zero Asset Owner Alliance(NZAOA)in 2022.Based on these two programmes,we have introduced our Responsible Investment Guideline,which covers the PRI,NZAOA and the sustainability criteria that we apply to our investment managem

213、ent.Moreover,Munich Re is a member of the Taskforce on Nature-related Financial Disclosures(TNFD),whose recommendations we take into account in our investment activities and in our insurance business.As outlined in further detail under“Governance”,our strategic decisions on sustainability in investm

214、ent are taken by the Board of Managements ESG Committee,supported by the ESG Management Team.In addition,the ESG Investment Committee specifically focuses on implementing the ESG strategy with regard to our investments;our Reputational Risk Committee supports our efforts to holistically handle susta

215、inability risks by analysing and assessing reputational risks in our investment activities.The Chief Investment Officer(CIO)is the Board member responsible for the Groups investment management.Group Investment Management(GIM),which reports to the CIO,is responsible for the sustainability of the Grou

216、ps investment strategy as the asset owner,and has set up its own ESG team for this purpose.ESG multipliers throughout GIM support the ESG team in establishing sustainability as an important consideration throughout the entire value chain.This structure is also reflected in asset management at MEAG,w

217、hich handles the majority of our investments.MEAG ensures targeted implementation of the ESG strategy through its membership on GIMs ESG Investment Committee,ongoing coordination among the ESG teams,and the ESG multipliers in the various portfolio-management teams.Regular training is offered to incr

218、ease and improve awareness of ESG issues,for example on regulatory topics or ESG trends.The MEAG ESG Committee at Board level and the MEAG ESG Management Team have key roles in this regard.Our investments are managed based on four pillars:systematic integration of ESG criteria in GIM and MEAGs inves

219、tment processes,fulfilment of our responsibility in our role as an asset owner(stewardship),defined exclusion criteria,and ESG-focused investment areas such as renewable energy and green bonds.In addition,we demand that all of our asset managers apply ESG criteria when handling their portfolios.Comb

220、ined management report 26 Combined non-financial statement Munich Re Group Annual Report 2023 Our goal is to decarbonise our investment portfolio,reaching net zero by 2050.In that context,we have committed to divest from thermal coal by 2040.Furthermore,we have adopted the Munich Re Group Ambition 2

221、025,a climate strategy for our investments that provides clear targets for our contribution to climate change mitigation.It includes reducing,in an intermediate step,our total scope 1 and 2 financed GHG emissions1 from listed equities,corporate bonds and direct real estate by 2529%compared to the 20

222、19 base year,by 2025.In addition,we have set specific sector targets for listed equities and corporate bonds:we intend to reduce financed GHG emissions from investments in thermal coal in particular mining and/or power generation by more than 35%by 2025,and for investments in oil and gas in particul

223、ar drilling and production,refining and distribution by more than 25%,respectively compared to the 2019 base year.In a further step towards reaching our net-zero target,in October 2022 we updated our guidelines for the oil and gas sector and added new restrictions.According to the Intergovernmental

224、Panel on Climate Change(IPCC)2,there is a close correlation between climate change and biodiversity.To avoid harming environmentally sensitive areas or those with great biodiversity,we take into account the UNESCO list of Word Heritage Sites(UN WHS)of natural or mixed cultural and natural heritage i

225、n our Responsible Investment Guideline for direct alternative investments in critical sectors.Any new investments we make in affected areas are subjected to review processes accordingly.We continue to make a concerted effort to hold a share of ESG-focused investments in our asset portfolio.In 2023,w

226、e achieved our goal of increasing our renewable energy holdings to 3bn ahead of the 2025 target.Measures In 2019,Munich Re stopped investing directly in listed companies that generate more than 30%of their earnings from thermal coal.Since 2021,companies that generate 15%to 30%of their earnings from

227、thermal coal have also been excluded from our investment universe or,in individual cases,encouraged to reduce their greenhouse gases in the context of an engagement dialogue as part of the investor-led Climate Action 100+(CA100+)initiative.In 2023,this was the case at nine companies associated 1 Sco

228、pe 1 GHG emissions:Direct emissions from primary energy consumption(natural gas,heating oil,emergency generators,fuel for company cars);Scope 2 GHG emissions:Indirect emissions from procured energy(purchase of electricity,district heating and district cooling).2 www.ipcc.ch/publication/climate-chang

229、e-and-biodiversity-2/with two business groups.The total sum invested in the companies in question as at 31 December 2023 amounted to approximately 172m.MEAG continued its collaborative engagement dialogues as part of CA100+and discusses the content to be addressed in the dialogues,and the progress m

230、ade,with GIM.In 2023,MEAG joined 12 further engagement groups,resulting in a total number of 22 contributions.One of these engagements came to an end in 2023,after CA100+established that the company concerned was no longer part of its target group.Given that we focus on the largest GHG emitters,our

231、dialogues are predominantly conducted with companies in the energy and industry sector.We also exercise our voting rights with regard to ESG aspects.When making direct alternative investments,we have as of 1 April 2023 stopped investing in projects specifically for new oil or gas fields,new oil-fire

232、d power plants,or midstream oil infrastructure.This applies to oil and gas fields that were not already producing,and to power plants or infrastructure that were not under construction or already operating,as at the deadline of 31 December 2022.In addition,since 1 April 2023 we have no longer direct

233、ly invested in equities or corporate bonds from listed oil and gas companies whose business model specialises in oil and gas.We define such specialised oil and gas companies in this respect as publicly traded companies listed under the Global Industry Classification Standard(GICS)Oil and Gas sub-sec

234、tors,with the exception of Integrated Oil&Gas.Direct investment in listed companies that generate more than 10%of their earnings from oil sands are also excluded.Furthermore,we exclude the following from our direct investment universe:Investment in companies that manufacture controversial weapons(in

235、cluding but not limited to the weapon categories anti-personnel mines and cluster munition)Government bonds(including the sub-sovereign level)and notes from government-related institutions in countries with an MSCI ESG rating of CCC Trade and investment in food-related commodities(e.g.grains/oilseed

236、s,dairy products).In our efforts to help mitigate human rights violations,we exclude countries and companies that significantly breach human rights from our investment universe on the basis of exclusion lists(see“Human rights”for more details).Combined management report 27 Combined non-financial sta

237、tement Munich Re Group Annual Report 2023 Our ESG-focused investments are strategic investments in assets that align with our long-term ESG strategy.They include investments in renewable energy,innovative transport solutions,sustainably managed forests,organic farming,certified buildings and green b

238、onds.In this context,renewable energy refers to investments in energy production facilities that use renewable energy sources such as the sun,wind,geothermal energy or hydroelectric power.It includes the associated infrastructure for producing electricity and heat,as well as for storage and transpor

239、tation.Our standard for sustainable forest investment is a certificate from the Forest Stewardship Council(FSC),the Programme for the Endorsement of Forest Certification Schemes(PEFC),or an equivalent certification.Direct real estate is deemed certified if it features a recognised certification from

240、,for example,the Building Research Establishment Environmental Assessment Method(BREEAM),Leadership in Energy and Environmental Design(LEED),or the German Sustainable Building Council(DGNB).The classification of our green bond holdings is based on an assessment of the emissions documentation from WM

241、 Datenservice.By issuing the Munich Re subordinated green bonds,our goal is to support the drive towards a climate-friendly transformation of the economy.Munich Re uses the capital received from the subordinated green bonds to finance or refinance suitable projects,in accordance with our Green Bond

242、Framework.Projects include investments of equity and debt in renewable energy,energy efficiency,clean transportation,green buildings,sustainable water management,the eco-efficient and/or circular economy,and the environmentally sustainable management of resources and land.Furthermore,integrating ESG

243、 criteria is a key component of our investment strategy.As a result,MEAG takes ESG risks and specifically determined ESG criteria into account in its investment decisions in the following asset classes:Combined management report 28 Combined non-financial statement Munich Re Group Annual Report 2023

244、In addition to our ESG targets,we also report on our ESG-focused investments and the rating coverage of liquid asset classes.The MSCI ESG rating coverage of the liquid asset classes equity,corporate and government bonds,and covered bonds is over 80%.As part of our PRI membership,Munich Re builds on

245、its sustainability strategy by engaging in regular dialogue with the PRI managers.PRI carried out a further assessment process in 2023 in which Munich Re participated.Metrics In order to meet our environmental objectives,we determine metrics based on the goals of the Munich Re Group Ambition 2025.Th

246、e defined metrics are all shown compared to the 2019 base year.Any additional metrics are shown in comparison to the previous year.The following table illustrates the development of scope 1 and 2 financed GHG emissions from listed equities,corporate bonds and direct real estate.We use data from the

247、external provider ISS ESG to measure the financed GHG emissions from listed equities and corporate bonds.To measure GHG emissions for our direct real estate portfolio,we continue to record energy consumption data,which is subsequently converted using emission factors.Absolute financed GHG emissions(

248、scope 1 and 2)1 t CO2e 31122023 Prev.year Listed equities,corporate bonds and direct real estate 3016864 3113093 Thereof:listed equities and corporate bonds from companies in the thermal coal segment in particular mining and/or power generation 234194 269179 Thereof:listed equities and corporate bon

249、ds from companies in the oil&gas segment in particular drilling and production,refining and distribution 463260 734197 1 For listed equities,corporate bonds based on the available CO2e emissions from the data provider ISS ESG(usually CO2e emissions from the previous year).For direct real estate,CO2e

250、 emissions for the 2023 reporting year are approximated due to a lack of available data at the time of publication.They are based on available CO2e emissions from the previous year and CO2e-emission reductions as a result of implemented energy-saving measures,provided they can be verified and measur

251、ed.Development of GHG emissions(scope 1 and 2)compared to the 2019 base year(Munich Re Group Ambition 2025)1%31122023 Prev.year Listed equities,corporate bonds and direct real estate 473 457 Thereof:listed equities and corporate bonds from companies in the thermal coal segment in particular mining a

252、nd/or power generation 543 475 Thereof:listed equities and corporate bonds from companies in the oil&gas segment in particular drilling and production,refining and distribution 551 289 1 For listed equities,corporate bonds based on the available CO2e emissions from the data provider ISS ESG(usually

253、CO2e emissions from the previous year).For direct real estate,CO2e emissions for the 2023 reporting year are approximated due to a lack of available data at the time of publication.They are based on available CO2e emissions from the previous year and CO2e-emission reductions as a result of implement

254、ed energy-saving measures,provided they can be verified and measured.Regarding the total absolute financed GHG emissions,+0.2(+0.5)percentage points of the year-on-year change were attributable to updated emissions data that we received from our data provider.Interest-rate changes on the markets lea

255、d to an adjustment in the market value of debt instruments and thus in total absolute financed GHG emissions.If we were to use the nominal value instead of the market value for debt instruments,the reduction would have been 42.7%(instead of 47.3%)relative to the 2019 base year.A further metric for a

256、ssessing our targets with regard to listed equities,corporate bonds and direct real estate is the relative CO2e footprint(t CO2e/m invested).The financed GHG emissions from this portfolio are shown in proportion to the market value of our investments.The amount was 75(t CO2e/m invested)on 31 Decembe

257、r 2022;as at 31 December 2023,it was 68(t CO2e/m invested).The metrics denominator takes into account all market values of the investments that fall under the scope of the Munich Re Group Ambition 2025.This also includes market values of investments for which no CO2e data is available to us.Data ava

258、ilability therefore also influences this metric in addition to the actual progression of the portfolios CO2e footprint.In the reporting year,CO2e data was available to us for 93.6%(93.0%)of the investments in the scope of the denominator.Combined management report 29 Combined non-financial statement

259、 Munich Re Group Annual Report 2023 In addition to decarbonisation targets,the financing of sustainable business activities plays an important role,particularly for the financial services industry.We provide information on our issued volume of green bonds in this context.Green bonds 31122023 Prev.ye

260、ar Change%Volumes of green bonds issued in m 2250 2250 00 Volumes of green bonds issued in US$m 1250 1250 00 The following table provides an overview of our ESG-focused investments.They are each shown with the sum of their market values in the respective asset class.ESG-focused investments 31122023

261、Prev.year Change m%Green bonds 3633 2326 562 Renewables 3130 2368 322 Certified real estate 2565 2633 26 Certified forestry management 1928 1537 254 As an indicator of the availability of ESG ratings,and to analyse ESG risks and opportunities,we calculate the share of the liquid asset classes equiti

262、es,corporate bonds,covered bonds and government bonds covered by MSCI ESG ratings,compared to the total volume of such liquid assets,on the basis of market values.Rating coverage of liquid asset classes%31122023 Prev.year Rating coverage of liquid asset classes 953 954 To provide a standardised and

263、transparent overview of the sectors that Munich Re invests in,in accordance with the Global Industry Classification Standard(GICS)we report the market values of the various asset classes for each industry sector.Investments by asset class and sector m 31122023 Prev.year Change Sector acc.to GICS per

264、 asset class%Equity Energy 10 175 252 306 Materials 15 514 572 101 Industrials 20 1522 1210 258 Consumer discretionary 25 1073 664 616 Consumer staples 30 812 1169 306 Healthcare 35 1157 1094 57 Financials 40 2531 2174 164 Information technology 45 1305 1037 259 Communication services 50 527 439 201

265、 Utilities 55 564 529 65 Real estate 60 248 135 833 Corporate bonds Energy 10 1471 2042 280 Materials 15 1194 1131 56 Industrials 20 2935 2782 55 Consumer discretionary 25 2250 1978 138 Consumer staples 30 1923 2202 127 Healthcare 35 2200 1790 229 Financials 40 41693 38692 78 Information technology

266、45 1217 1272 43 Communication services 50 2867 2501 146 Utilities 55 3833 3091 240 Real estate 60 866 808 72 Derivatives Financials 40 2981 4962 399 Mortgage loans Real estate 60 8454 7561 118 Real estate Real estate1 60 9384 8719 76 1 Measured at book values.Combined management report 30 Combined n

267、on-financial statement Munich Re Group Annual Report 2023 EU Taxonomy Regulation We report on the share of our taxonomy-eligible and taxonomy-aligned economic activities in investment and insurance,as per EU Regulation 2020/852(EU Taxonomy Regulation)in conjunction with the Commission Delegated Regu

268、lation(EU)2021/2178.On 21 December 2023,the European Commission published a new FAQ document(Draft Commission Notice)on the interpretation and implementation of certain legal provisions of the Commission Delegated Regulation(EU)2021/2178 on the taxonomy-related information to be disclosed by financi

269、al undertakings.We have reviewed our disclosures on this basis and changed them accordingly,provided that the interpretation was clear and,in light of the late publication of the notice,that implementation was feasible.Information that is not clear or contradicts previous FAQs,however,must first be

270、checked by us.The EU Taxonomy Regulation sets out a standardised system for classifying which economic activities can be qualified as environmentally sustainable,and under which conditions.For the year 2023,reporting requirements on the four non-climate-related environmental objectives sustainable u

271、se and protection of water and marine resources;transition to a circular economy;pollution prevention and control;and protection and restoration of biodiversity and ecosystems had to be applied for the first time.The taxonomy criteria applicable to date for the climate-related environmental objectiv

272、es climate change mitigation(CCM)and climate change adaptation(CCA)have been updated with changes to the technical screening criteria,and additional economic activities have been added.For any economic activity disclosed for the first time or modified in 2023,a two-year transition period applies dur

273、ing which it is only necessary to report on the taxonomy-eligibility of that activity.For the 2023 reporting year,we are reporting for the first time not only on the share of our taxonomy-eligible assets,but also on the share of our assets with which we finance economic activities that are taxonomy-

274、aligned with the climate-related environmental objectives.Our focus with regard to the taxonomy is to calculate the metrics required by regulation.There are no broader strategic implications at present.At the time of publication,no information on the four non-climate-related environmental objectives

275、 for the reporting year was available from our investee companies.However,we examined our direct real estate used by third parties,and other investments in non-financial assets,for the first time to determine their taxonomy-eligibility and thus their contribution to the newly applicable environmenta

276、l objectives.In this process,we also took into account the new economic activities with respect to the climate-related environmental objectives.All assets that are theoretically able to finance economic activities fall within the scope of the taxonomy KPIs.This predominantly includes the balance she

277、et items“Investments”,“Investments for unit-linked life insurance”and“Insurance-related financial instruments”.It does not include intangible assets,owner-occupied property or further property,plant and equipment that are not held for the purpose of financing economic activities.Insurance and reinsu

278、rance contracts that are classified as assets for accounting purposes,and cash resources such as cash at banks,cheques and cash in hand are also excluded.Furthermore,Investments in governments,central banks and supranational issuers fall outside the scope of the taxonomy KPIs.Investments in governme

279、nts also include investments in German federal states(Bundeslnder),regions,municipalities,cities and communities.Issuers with EU state guarantees are subject to an assessment to determine their taxonomy-eligibility and-alignment.The total investments the basis for calculating the coverage ratio pred

280、ominantly include the balance sheet items“Cash and cash equivalents”and“Other assets”,in addition to the investments in the scope of the taxonomy KPIs.The following table shows the scope of the taxonomy KPIs based on the IFRS carrying amounts,and the coverage ratio,i.e.the assets covered by the KPIs

281、 relative to the total investments considered.It presents a full breakdown of the investments that fall within the scope of the taxonomy KPIs.In order to fulfil the requirement in Article 6 of the Commission Delegated Regulation(EU)2021/2178,we also disclose the templates set out in Annex X of that

282、regulation under“EU Taxonomy Regulation templates”.In this section of the report,many of the disclosure requirements for the current reporting year are being presented for the first time.For that reason,comparative information will only be available as of the 2024 reporting year.Combined management

283、report 31 Combined non-financial statement Munich Re Group Annual Report 2023 Scope of application of the taxonomy KPIs as per Art.8 of the EU Taxonomy Regulation 31122023 m%Total investments 246566 1000 Thereof assets covered by the KPIs,absolute and relative to total investments(Coverage ratio)156

284、093 633 Thereof other than investments for unit-linked life insurance contracts,absolute and relative to assets covered by the KPIs 148160 949 Thereof exposure to other counterparties,absolute and relative to total assets covered by the KPIs 42889 275 Assets covered by the KPIs in scope of the numer

285、ator,absolute and relative to assets covered by the KPIs 61400 393 Assets funding economic activities from financial undertakings subject to NFRD 11261 72 Assets funding economic activities from non-financial undertakings subject to NFRD 7381 47 Exposure to other counterparties in scope of the numer

286、ator 42758 274 Assets covered by the KPI not in scope of the numerator,absolute and relative to assets covered by the KPI 94693 607 Assets funding economic activities from financial undertakings not subject to NFRD 57012 365 Assets funding economic activities from non-EU financial undertakings not s

287、ubject to NFRD 28917 185 Assets funding economic activities from EU financial undertakings not subject to NFRD 28095 180 Assets funding economic activities from non-financial undertakings not subject to NFRD 34374 220 Assets funding economic activities from non-EU non-financial undertakings not subj

288、ect to NFRD 24415 156 Assets funding economic activities from EU non-financial undertakings not subject to NFRD 9958 64 Derivatives 3176 20 Exposure to other counterparties not in scope of the numerator 131 01 A companys economic activities are taxonomy-eligible if they are listed in the Delegated R

289、egulation(EU)2021/2139(Commission Delegated Regulation 2021/2139),supplementing the EU Taxonomy Regulation.Taxonomy-eligible activities are activities that are deemed to be generally suitable for making a positive contribution to the respective environmental objective.In accordance with Article 3 of

290、 the EU Taxonomy Regulation,economic activities are taxonomy-aligned if they actually contribute substantially to one or more of the environmental objectives,without causing significant harm to one of the others(principle of“do no significant harm”or DNSH).Both are determined by using technical scre

291、ening criteria.To qualify as taxonomy-aligned,the company carrying out the economic activity must also ensure it does so in compliance with minimum safeguards.Our disclosures on taxonomy-alignment are based particularly on reports from non-financial undertakings,which published information on their

292、taxonomy-alignment regarding the climate change mitigation and climate change adaptation environmental objectives for the first time for the 2022 reporting year.Regarding our investments in other financial undertakings,however,no published information about their taxonomy-alignment was available to

293、us at the time of publication.For that reason,we disclose these under“Assets funding taxonomy-eligible economic activities where alignment has not yet been assessed”.In cases where the taxonomy-alignment data is inconsistent or incomplete,we disclose the investments under“Assets funding taxonomy-eli

294、gible but not taxonomy-aligned economic activities”.For the portion of our portfolio that represents an investment in the activities of companies that are obliged to publish a non-financial statement,we disclose the shares of the taxonomy-eligible and the taxonomy-aligned turnover and of the taxonom

295、y-eligible and taxonomy-aligned capital expenditure,respectively,that we finance through our investments at the reporting companies.We base this on information from a data provider and only use actual reported data.The denominator accordingly constitutes the total assets covered by the taxonomy KPIs

296、.We have undertaken our own classification to determine the taxonomy-eligibility and-alignment of our real estate used by third parties,mortgage loans and other investments in non-financial assets.The same applies to our infrastructure investments held via holdings or special-purpose vehicles(SPVs)a

297、nd for which we performed a look-through.We also looked through our unconsolidated funds to the assets contained therein,to determine the taxonomy-eligibility and-alignment of the former.With regard to our investments in renewable energy and forestry,the most relevant economic activities are 4.1.Ele

298、ctricity generation using solar photovoltaic technology,4.3.Electricity generation from wind power and 1.3.Forest management.For this reporting year,we were able to report only a small share of our investments in renewable energy,and none of our investments in forestry,as taxonomy-aligned.This is be

299、cause fulfilment of the DNSH criteria for the two climate-related environmental objectives cannot yet be fully documented.We are reliant on the operating companies to support us with the remaining documentation requirements.Through continuous dialogue and further engagement,we are working towards ob

300、taining the missing documentation from the companies in question.We expect an increase in the alignment ratio for the above-mentioned asset classes for the coming reporting year.Due to the fact that economic activities connected with real estate are generally taxonomy-eligible and real estate collat

301、eral is available for every mortgage loan,the share of Combined management report 32 Combined non-financial statement Munich Re Group Annual Report 2023 real estate and mortgage loans that are taxonomy-eligible is 100%.Mortgage loans to private individuals and companies as well as direct and indirec

302、t real estate used by third parties have made the greatest contribution to our taxonomy-alignment.These economic activities primarily fall under the category 7.7.Acquisition and ownership of buildings and have been allocated exclusively to the environmental objective climate change mitigation.We wer

303、e not able to report any taxonomy-alignment for the activities classified under 7.1.Construction of new buildings or 7.2.Renovation of existing buildings in the reporting year.This is due to the fact that adequate evidence that the DNSH criteria have been met cannot yet be provided in full.In the ca

304、se of loans,the buildings that serve as collateral for the mortgage loans were used as the basis for assessing taxonomy-eligibility and-alignment.As part of this taxonomy assessment,we checked the energy status of the buildings.Their energy efficiency was determined on the basis of energy performanc

305、e certificates or energy-efficiency data obtained by external service providers.Due to a lack of availability of energy performance certificates for the majority of residential buildings in Germany serving as collateral for mortgage loans,an energy-efficiency-class screening was carried out by Spren

306、gnetter Property Valuation Finance GmbH based on comparable buildings.For economic activity categorised under 7.7.,a building built before 31 December 2020 can make a significant contribution to the environmental objective of climate change mitigation,as an alternative to having an energy-efficiency

307、 class of at least A,when it is within the top 15%of the national or regional building stock in terms of its energy efficiency.Due to a lack of public data,determination of the top 15%was based on relevant studies.For residential buildings in Germany,a study by the Association of German Pfandbrief B

308、anks and Drees&Sommer,updated in August 2023,was used.For commercial buildings in Germany and abroad,the basis was data from the Institut de lEpargne Immobilire et Foncire(IEIF)in collaboration with software provider Deepki,supported by the German Sustainable Building Council(DGNB)and the Royal Inst

309、itution of Chartered Surveyors(RICS).In assessing the DNSH criterion for climate change adaptation,an analysis of current and future,material,physical climate risks that could affect buildings was performed using Munich Re Service GmbHs climate-risk analysis tool(“Risk Suite”).Derivatives classified

310、 as assets for the balance sheet,as well as investments in companies which are themselves not obliged to publish a non-financial statement(for example companies whose registered seat is outside the EU)are not included in the assessment of taxonomy-eligibility and -alignment.We mainly use data from t

311、he provider ISS ESG to identify such companies.In addition,we perform a consistency check based on relevant data from Bloomberg.Our investments in asset-backed securities(ABS)are reported under“Assets not in scope of the numerator”.Based on the regional distribution of our ABS portfolio as well as r

312、andom samples of originators known to us,we came to the conclusion that the majority consisted of companies that are not subject to the reporting obligations.Because insufficient data was available,we were also unable to look through to the ultimate beneficiaries for a large portion of our investmen

313、ts in ABS.Our investments in private equity funds are reported in the same way as funds not managed by MEAG where it was not possible to perform a look-through despite sufficient efforts,i.e.under“Assets funding taxonomy-non-eligible economic activities”.In accordance with the provisions of Article

314、8 of the EU Taxonomy Regulation,in combination with Delegated Regulation(EU)2021/2178(Commission Delegated Regulation 2021/2178),in the following we report metrics concerning the share of our taxonomy-eligible and taxonomy-aligned assets.The table provides a full breakdown of the assets included in

315、the assessment of taxonomy-eligibility and-alignment.In order to fulfil the requirement in Article 6 of the Commission Delegated Regulation(EU)2021/2178,we also disclose the templates set out in Annex X of that regulation under“EU Taxonomy Regulation templates”.Combined management report 33 Combined

316、 non-financial statement Munich Re Group Annual Report 2023 Overview of taxonomy-eligibility and-alignment of assets(details on the numerator);absolute and relative to total assets covered by the KPIs1,2 31122023 31122023 Turnover-based CapEx-based m%m%Assets covered by the KPIs in scope of the nume

317、rator,absolute and relative to total assets covered by the KPIs 61400 393 61400 393 Assets funding taxonomy-eligible economic activities 32197 206 31800 204 Assets funding taxonomy-aligned economic activities 3488 22 3861 25 Assets funding taxonomy-aligned economic activities from non-financial unde

318、rtakings 466 03 825 05 Assets funding taxonomy-aligned economic activities from other counterparties3 3022 19 3037 19 Thereof assets funding taxonomy-aligned activities other than investments for unit-linked life insurance contracts 3468 22 3829 25 Assets funding taxonomy-eligible but not taxonomy-a

319、ligned economic activities 25876 166 26491 170 Assets funding taxonomy-eligible economic activities where alignment has not yet been assessed 2833 18 1447 09 Assets funding economic activities that are not taxonomy-eligible 24646 158 22465 144 Assets from financial investee undertakings not used to

320、assess taxonomy-eligibility4 4558 29 7136 46 1 This table includes an assessment for the environmental objectives of climate change mitigation and climate change adaptation.With regard to environmental objectives 36,eligibility was assessed only for direct investments in non-financial assets.For our

321、 liquid investments in other undertakings,no reported data on environmental objectives 36 was available at the time of publication.Moreover,alignment figures are included only from non-financial investee undertakings,as reported alignment data from financial undertakings is not yet available.2 With

322、regard to investments in primary insurers and reinsurers,the share of taxonomy-eligible and non-taxonomy-eligible insurance activities is considered as a turnover-based share,and the share of taxonomy-eligible and non-taxonomy-eligible investments is allocated to the CapEx-based share accordingly.3

323、Thereof 08 percentage points are attributable to mortgage loans for which the taxonomy-alignment was assessed using an energy-efficiency-class screening on the basis of comparable objects.4 Comprised of our investee undertakings investments in derivatives and in undertakings that are not obliged to

324、publish a non-financial statement.Both are excluded from the eligibility assessment performed by our investee undertakings.Financial undertakings are obliged as a matter of principle to base their taxonomy-alignment calculations on adjusted key performance indicators from the non-financial undertaki

325、ngs in which they invest.Non-financial undertakings are obliged to adjust their share of taxonomy-aligned economic activities if they have financed taxonomy-aligned turnover and/or capital expenditure using proceeds from green bonds they have issued.Due to incomplete disclosures from our investee co

326、mpanies,we were not able to make such an adjustment for the reporting year.For the 2022 reporting year,our investee companies have taken into account the Complementary Climate Delegated Act with regard to the climate change mitigation and climate change adaptation environmental objectives.Accordingl

327、y,information on the taxonomy-eligible and taxonomy-aligned nuclear energy and fossil gas related activities of those companies subject to disclosure obligations was made available to us for the first time for the 2023 reporting year.In the following,we provide an overview of our investment activiti

328、es in fossil gas and nuclear energy generation as well as the share of our assets that fund the associated taxonomy-eligible and taxonomy-aligned economic activities(4.264.31).In addition,under“EU Taxonomy Regulation templates”we present the standard templates set out in Annex XII,as stipulated in A

329、rticle 8,paragraph 8 of the Commission Delegated Regulation(EU)2022/1214.This concerns the disclosure requirements in accordance with Article 8,paragraphs 6 and 7 regarding fossil gas and nuclear energy generation activities.Combined management report 34 Combined non-financial statement Munich Re Gr

330、oup Annual Report 2023 Nuclear and fossil gas related activities1 Nuclear energy related activities Turn-over-based CapEx-based 426 The undertaking carries out,funds or has exposures to research,development,demonstration and deployment of innovative electricity generation facilities that produce ene

331、rgy from nuclear processes with minimal waste from the fuel cycle.No No 427 The undertaking carries out,funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat,including for the purposes of district heating or industrial processes

332、 such as hydrogen production,as well as their safety upgrades,using best available technologies.No No 428 The undertaking carries out,funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat,including for the purposes of district heating or

333、industrial processes such as hydrogen production from nuclear energy,as well as their safety upgrades.No No Fossil gas related activities 429 The undertaking carries out,funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.Yes Yes 430 The undertaking carries out,funds or has exposures to construction,refurbishm