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Aon Risk Services Client Seminar 2009 State of the ART RISK Management during the Crisis. Amsterdam, 10 th September, 2009. August Pröbstl. Agenda. About Us Trends / Developments One of our answers. Munich Re Group Half-year facts & figures 2008 and 2009.

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aon risk services client seminar 2009 state of the art risk management during the crisis

Aon Risk Services Client Seminar 2009State of the ART RISK Management during the Crisis

Amsterdam, 10th September, 2009

August Pröbstl

agenda
Agenda
  • About Us
  • Trends / Developments
  • One of our answers

MARP – August Pröbstl – AON Risk Services

munich re group half year facts figures 2008 and 2009
Munich Re GroupHalf-year facts & figures 2008 and 2009

Munich Re Group is a strong and reliable risk partner these days and, it goes without saying, as well in the future.

MARP – August Pröbstl – AON Risk Services

risk management within munich re group our strength your added value
Risk Management within Munich Re GroupOur strength – your added value

Reduced impact of weak capital market

Hedging strategy proved successful in financial crisis

Binding strategic risk criteria and operational limits driving Group-wide risk management

Hardly exposed in stock market, ~73% very well rated government FI bonds

Group-wide strategic risk management framework

Reasonable exposure to financial sector

Pro-activeinternal Risk Management

Swift reaction to changed market conditions and targeted measures across all LoB

Risks generally well captured by existing risk models

Ongoing analysis of scenarios

Reliable risk modeling

MARP – August Pröbstl – AON Risk Services

munich re group s business model more than reinsurance
Munich Re Group’s Business Model More than reinsurance

Traditional reinsurance solutions

Large individual risks solutions

Specialtycommercialsolutions

Personal specialtysolutions

Standard retailsolutions

Riskcapacity

Distributionpower

Riskknow-how

MARP – August Pröbstl – AON Risk Services

marp s presence in the world further local offices to be continuously explored
MARP’s presence in the worldFurther local offices to be continuously explored

London

Paris

Munich

NY/ Princeton

Singapore

As an integral part of Munich Re Group, MARP offers global (re-)insurance covers for Fortune 5000 companies and leading players in their industries either via fronting or via captives

MARP – August Pröbstl – AON Risk Services

marp s lines of business traditional products and individual risk solutions available
MARP’s lines of businessTraditional products and individual risk solutions available

Client Management as well as a claims handling and operations unit support our lines of business.

MARP – August Pröbstl – AON Risk Services

agenda8
Agenda
  • About Us
  • Trends / Developments
  • One of Our Answers

MARP – August Pröbstl – AON Risk Services

some global cycle indicators implying moderate price increases
Some global cycle indicators implying moderate price increases >>

MARP – August Pröbstl – AON Risk Services

some global cycle indicators impacting moderate price increases
>> Some global cycle indicators impacting moderate price increases

MARP – August Pröbstl – AON Risk Services

financial credibility crisis disclosed interesting insights about the insurance market
Financial CredibilityCrisis disclosed interesting insights about the insurance market

CDS Spreads 1 Jan 2008 to 31 Aug 20091Source: Datastream

1Raw beta to DJ Stoxx 600, total return, daily basis, 1-year. 5-year credit default swaps (spreads in basis points p.a.).

Clients increasingly focus on security and financial credibility of business partners when considering the intrinsic value of capacity and overall economics in placements.

MARP – August Pröbstl – AON Risk Services

introduction of a risk based capital approach
Introduction of a risk-based capital approach

Regulatory capital requirement for a captive and its types of risk

current capital requirement

potential requirement under Solv II

requirement after individual risk transfer

  • Risk-based capital approach reveals opportunity costs of self-insurance via captive
  • Insurance buying driven by exposures rather than available budgets

MARP – August Pröbstl – AON Risk Services

increased awareness for new types of risk liquidity risks and intangible assets in the spotlight

Company

  • Pursuing profitable growth
  • Seizing opportunities
  • Taking new risks
Increased awareness for new types of risk Liquidity risks and intangible assets in the spotlight

Customers

Market Environment

  • Cost-conscious and demanding
  • Well informed (e.g. via internet)
  • Diminishing loyalty
  • Highly competitive
  • Global and dynamic
  • Shortened product cycle

Financial Crisis

Other Important Parties

Regulatory Requirements

  • New or pending requirements
  • Spinney of regulations
  • Various, regional distinctions
  • Analysts
  • Investors
  • Rating agencies

“Of all our identified risks that we face, I am only able to transfer 7% to the insurance market, although I am aiming for more than 10%.” … says a corporate risk manager.

MARP – August Pröbstl – AON Risk Services

agenda14
Agenda
  • About Us
  • Trends / Developments
  • One of Our Answers

MARP – August Pröbstl – AON Risk Services

special enterprise risk ser ser s objective is to fully comprehend client s erm needs
Special Enterprise Risk (SER)SER’s objective is to fully comprehend client’s ERM needs

What does SER do?

What does SER not do?

  • Develop innovative solutions for individual risk profiles
  • Tailor-made solutions, not “off the shelf” products
  • Close collaboration with clients and their broker
  • Project-driven, not product-driven
  • Cover 100% of client’s mitigation need without reservation
  • Cover standard exclusions on a stand alone basis
  • Cover strategic business risk or management decisions
  • Cover success of market entry

MARP – August Pröbstl – AON Risk Services

ser s working model quite flexible trying to identify and focus on promising topics
SER’s working modelQuite flexible, trying to identify and focus on promising topics
  • Boundaries are given by conceptional design and issue based work.
  • Solutions are developed for individual as well as across all industries.
  • In principle global with current focus Europe and US
  • SER is not a “product developing unit”.

Reputational/ Brand Value Risk

Pandemic

Ext. Warranty

One Specific Industry

Across All Industries

REACH

Multi Year & Line

Renewable Energies

CBI

Clinical Trials

Legend

A few current examples

Conceptional Design

Issue Based

Deal done

MARP – August Pröbstl – AON Risk Services

ser solution for a pharmaceutical company structured solution for a multi line multi year deal
SER solution for a pharmaceutical company Structured solution for a multi line & multi year deal

1

  • Captive‘s situation
  • Efficient capital structure using RI
  • FSA induced activities
  • Coverage is 7LoB, e.g.
  • NDBI
  • Product recall
  • Business travel accident
  • Motivation
  • Capital adequacy directive (similar to Solvency II)
  • Limited risk transfer using captive’s liquidity situation

2

4

  • Deal structure
  • Multi year and multi line
  • Traditional underwriting via MARP UK

3

MARP – August Pröbstl – AON Risk Services

thank you very much for your interest

© 2009 Münchener Rückversicherungs-Gesellschaft © 2009 Munich Reinsurance Company

Thank you very much for your INTEREST

August PröbstlHead of MARPMunich Re GroupTel.: +49 (0) 89/ 38 91 – 2626

Fax: +49 (0) 89/3891 – 72626

E-mail: [email protected]

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