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1、 Group Annual Report 2022 Munich Re Key figures(IFRS)1 Munich Re at a glance 2022 2021 2020 2019 2018 Gross premiums written m 67,133 59,567 54,890 51,457 49,064 Net earned premiums m 63,462 55,202 51,223 48,280 45,735 Net expenses for claims and benefits m 46,957 45,383 43,077 39,685 35,116 Net ope
2、rating expenses m 15,907 13,674 12,815 13,056 12,587 Operating result m 3,582 3,517 1,986 3,430 3,725 Taxes on income m 580 552 269 483 576 Consolidated result m 3,419 2,932 1,211 2,707 2,275 Attributable to non-controlling interests m 13 1 0 17 34 Earnings per share 24.63 20.93 8.63 18.97 15.53 Ret
3、urn on equity(RoE)2%13.5 12.6 5.3 11.7 8.4 Return on investments(RoI)%2.1 2.8 3.0 3.2 2.8 Dividend per share3 11.60 11.00 9.80 9.80 9.25 Dividend payout3 m 1,590 1,541 1,373 1,373 1,335 Share price at 31 December 304.00 260.50 242.80 263.00 190.55 Munich Reinsurance Companys market capitalisation at
4、 31 December bn 42.6 36.5 34.0 38.0 28.5 Carrying amount per share 153.02 220.06 213.38 215.32 180.86 Investments m 219,797 240,300 232,950 228,764 216,852 Insurance-related investments m 11,128 12,283 11,033 9,163 8,424 Equity m 21,202 30,945 29,994 30,576 26,500 Off-balance-sheet unrealised gains
5、and losses4 m 5,494 18,888 21,298 19,913 16,067 Net technical provisions m 232,456 234,044 221,480 217,941 208,270 Balance sheet total m 298,570 312,405 297,946 287,553 270,168 Staff at 31 December 41,389 39,281 39,642 39,662 41,410 Reinsurance 2022 2021 2020 2019 2018 Gross premiums written m 48,07
6、5 41,354 37,321 33,807 31,286 Investments(incl.insurance-related investments)m 97,714 103,226 94,631 92,429 85,605 Net technical provisions m 97,448 89,461 78,190 77,166 72,407 Major losses(net)m 4,173 4,304 4,689 3,124 2,152 Natural catastrophe losses m 2,430 3,139 906 2,053 1,256 Combined ratio pr
7、operty-casualty%96.2 99.6 105.6 100.2 99.4 Investment result m 1,520 3,422 3,193 3,318 2,543 Consolidated result m 2,593 2,328 694 2,268 1,864 Thereof:Reinsurance Life and health m 737 325 123 706 729 Thereof:Reinsurance Property-casualty m 1,856 2,003 571 1,562 1,135 Return on equity(RoE)5%13.8 13.
8、4 4.1 13.3 ERGO 2022 2021 2020 2019 2018 Gross premiums written m 19,058 18,213 17,569 17,650 17,778 Investments(incl.insurance-related investments)m 133,211 149,357 149,352 145,497 139,671 Net technical provisions m 135,008 144,583 143,290 140,776 135,863 Combined ratio property-casualty Germany%90
9、.6 92.4 92.4 92.3 96.0 Combined ratio International%94.3 92.9 92.7 94.3 94.6 Investment result m 3,383 3,734 4,206 4,504 3,983 Consolidated result m 826 605 517 440 412 Thereof:Life and Health Germany m 485 164 130 187 264 Thereof:Property-casualty Germany m 185 234 157 148 45 Thereof:International
10、m 155 207 230 105 103 Return on equity(RoE)5%12.5 10.1 8.8 7.4 1 You can download this information as an Excel file;please refer to the Financial Supplement under 2 We changed the calculation of RoE in 2020.The figure for 2019 was adjusted accordingly.Comparability with 2018 is thus limited.Further
11、information about this indicator can be found in the combined management report in the sections“Strategy”and“Tools of corporate management and strategic financial objectives”.Information about the calculation of RoE can be found in the Notes to the consolidated financial statements,in the section en
12、titled“Segment reporting,Notes on determining the return on equity(RoE)”.3 Subject to approval by the Annual General Meeting.4 Including those apportionable to minority interests and policyholders.5 Since the publication of our Ambition 2025 in December 2020,RoE has now become a target figure for ou
13、r fields of business.Further information about this indicator can be found in the combined management report in the sections“Strategy”and“Tools of corporate management and strategic financial objectives”.Information about the calculation of RoE can be found in the Notes to the consolidated financial
14、 statements,in the section entitled“Segment reporting,Notes on determining the return on equity(RoE)”.We do not report this indicator for 2018.Contents Group Annual Report 20221 1 Munich Re Group Annual Report 2022 Munich Re at a glance Key figures(IFRS)Inside front cover Quarterly figures Inside ba
15、ck 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 Combined non-financial statement 25 Business performance 57 Financial
16、 position 73 Risk report 77 Opportunities report 89 Prospects 91 Munich Reinsurance Company(information reported on the basis of German accountancy rules)93 Corporate governance 101 Report of the Supervisory Board 103 Statement on Corporate Governance 110 Consolidated financial statements and notes
17、129 Consolidated balance sheet 132 Consolidated income statement 134 Statement of recognised income and expense 135 Group statement of changes in equity 136 Consolidated cash flow statement 138 Notes 139 Independent auditors report 231 Independent auditors report on a limited assurance engagement 23
18、9 Responsibility statement 242 Imprint/Service 243 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 calculation of percentages in this report.This document is a translation of the origi
19、nal 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.1 The format of this publication does not correspond to the European Single Electr
20、onic Format(ESEF).The legally required preparation in ESEF format will be submitted to the authority responsible for operating the German Company Register and will be published in the Company Register.To our shareholders 3 Munich Re Group Annual Report 2022 When we set out our result target for 2022
21、,no one could have imagined the geopolitical and macroeconomic upheavals the year would have in store:the Russian war of aggression and the ensuing economic turbulence were not foreseeable.As a consequence,our investments in particular were subject to significant volatility.While the sharp increase
22、in interest rates is welcome in the long run,it has wiped out hidden reserves and led to substantial impairment losses in the short term.Energy scarcity owing to the war further fuelled global inflation,which had already been on the rise;we have made provisions for increased claims expenditure as a
23、result of rising inflation.Despite the challenges,we delivered a profit of 3.4bn and thus even slightly exceeded our 3.3bn result target.With earnings per share increasing by 17.6%,a return on equity of 13.5%and a solvency ratio of 260%,we are on track to also meet the medium-term targets set out in
24、 our Ambition 2025.The resilience of our business model is also recognised on the capital markets:despite a difficult stock market environment in 2022,Munich Res shares ended the year with just shy of a 17%gain on the previous year.Only one DAX 40 company managed to outperform this increase.As regar
25、ds total shareholder return,we occupied the top spot among the worlds eight leading reinsurers and European primary insurers between 2019 and 2022.As usual,our shareholders will benefit greatly from our gratifying performance:we are proposing that the Annual General Meeting approve a dividend increa
26、se of 5.5%to 11.60 per share.In addition,we have now approved a new share buy-back with a volume of 1bn.Dr.Joachim Wenning Chair of Munich Reinsurance Companys Board of Management To our shareholders 4 Munich Re Group Annual Report 2022 Russias war against Ukraine has left its mark on Munich Re,too.
27、We cancelled all new business in Russia and Belarus shortly after war broke out,and existing contracts have not been renewed.We took the same approach to our investments in the region.War-related expenditure across various lines of business amounted to 475m in 2022.The impact on our investment busin
28、ess was also pronounced:war-related write-downs of approx.850m were necessary in 2022.We are committed to alleviating the suffering of the people of Ukraine.Companies and employees around the world are involved in dozens of initiatives and have made numerous donations.In addition to this,Munich Re a
29、nd MEAG are directly supporting the operations and humanitarian work of the Ukrainian Free University(UFU)in Munich,a Ukrainian university in exile.We are providing the UFU with over 1,000 square metres of rent-free space within the MEAG premises and had the area converted to make it suitable for te
30、aching.Thanks to this project,approximately 150 students who have fled Ukraine have been able to continue with their studies in exile.Amidst major crises in the past year,Munich Re has once again proven its social relevance and financial robustness.We owe this resilience primarily to the diversifica
31、tion of our business model and the operational strength of our individual fields of business.In 2022,the ERGO field of business was once again able to improve its result contribution thanks to good operational development supported by a one-off effect.Generating a result of around 830m,ERGO signific
32、antly exceeded its target for the year.In the Property-casualty Germany segment,we were able to increase premium income substantially.Business growth was achieved in commercial/industrial business in particular,as well as in homeowners insurance and motor insurance.In the ERGO Life and Health German
33、y segment,capital-efficient and biometric life products,considerable premium growth in travel insurance and higher demand for supplementary health covers contributed to growth.In international business,too,ERGO achieved higher gross premium income in 2022.Above all,growth in property-casualty insura
34、nce business in Poland and the Baltic states as well as the good performance of health business in Belgium supported this positive premium development.Reinsurance continued to benefit from the ongoing hard market.Our renewals in 2022 generated premium growth of 11.9%,and prices rose by 0.5%.In times
35、 of elevated uncertainty,we were an especially sought-after partner for our clients thanks to our capacity and the strength of our balance sheet.On the claims side,Hurricane Ian one of the costliest hurricanes of all time was a poignant symbol of yet another year with high natural catastrophe losses
36、.For the second year in a row and the fifth in the recent past,insured losses surpassed the 100bn mark a figure that is becoming the new normal in times of climate change.Nevertheless,property-casualty business is proving to be robust in the face of high major losses a mark of quality for our nat ca
37、t models in particular.At 2.6bn,the To our shareholders 5 Munich Re Group Annual Report 2022 contribution to profits of the reinsurance field of business almost exactly matched our original target of 2.7bn.Life and health as well as our Risk Solutions business both made a very positive contribution
38、to this result.In asset management,we achieved a return on investment of 2.1%despite an environment in which almost every asset class declined in value on average over the year.In particular,write-downs of Russian and Ukrainian bonds in the context of the war as well as of shares,derivatives and fix
39、ed-interest securities as a result of falling stock markets and the abrupt rise in interest rates weighed on investments.This was offset by balancing effects from rising interest rates on insurance business and the very high currency result of 676m,neither of which is included in the investment resu
40、lt for accounting reasons.In addition,rising interest rates are positive for insurers in the long term,as can already be seen from the significant increase in the reinvestment yield to 2.8%.We once again expanded our investments in renewable energies:now at 2.4bn,the investment volume climbed by aro
41、und 40%year on year.The strong results achieved by ERGO and life and health reinsurance compensated for the expenditure in property-casualty reinsurance and in asset management.And that is not simply a happy coincidence.Indeed,the strategic course we have set ourselves as part of our Ambition 2025 i
42、s already coming to fruition:the greater the profit generated by our less volatile fields of business,the less susceptible our consolidated result is to fluctuations.As a logical consequence of this strategic orientation and on the basis of the Groups growth ambitions,Munich Re established a new Boa
43、rd division Global Speciality Insurance which commenced operations on 1 January 2023.The division comprises specialty primary insurance business,which has grown substantially in the USA and the London market and is set to continue to see strong growth going forward.Pooling the business in this way w
44、ill strengthen both growth and earnings potential in this segment.With two successful financial years behind us,we are well on track to achieve the five-year targets set out in our Ambition 2025.For 2023,we have set ourselves a profit target of 4bn calculated on the basis of the new accounting stand
45、ard IFRS 17.Insurance revenue,the IFRS 17 item that will supersede“premium income”in future,is expected to reach around 58bn;return on investment is anticipated to be above 2.2%.We made an excellent start to the new year in our core business of reinsurance.In the January 2023 renewals,the positive t
46、rend was even stronger than we have seen in the renewal rounds in recent years.With premium growth of 1.3%and a price increase of 2.3%,we grew in the areas in which we generate the highest earnings,and successfully outpaced inflation to improve our margins.Furthermore,and unlike in the past few year
47、s,we are not expecting any further substantial losses attributable to the waning coronavirus pandemic.To our shareholders 6 Munich Re Group Annual Report 2022 Munich Res pleasing performance goes hand in hand with the good progress we have made with our non-financial targets relating to environmenta
48、l,social and governance(ESG)interests.In terms of environmental protection and given the pressing issue of climate change,the incremental decarbonisation of our investment and insurance portfolio is a particularly important objective.With regard to our targets for our investment activities,we lowere
49、d our greenhouse gas emissions by 46%in 2022 relative to 2019(the base year for our Ambition 2025)another 15 percentage points more than in the previous year.We were also able to quantify the effects in our insurance business for the first time,achieving a reduction of 29%for activities relating to
50、coal-fired power plants,37%for thermal coal extraction(mines)and 40%for property insurance business in oil and natural gas extraction.These figures already exceed or are within reach of our target values for 2025.In addition,we issued new guidelines for insurance and investments associated with oil
51、and gas in 2022.They will enter into effect on 1 April 2023 and,among other things,preclude Munich Re from investing in or insuring contracts or projects that relate exclusively to the planning,financing,construction and operation of new oil or gas fields.Instead,we will continue to step up our inve
52、stment in renewables and support the energy transition by providing smart insurance solutions for environmentally friendly technology and products.Alongside our climate action,we are committed to achieving greater diversity in our workforce as a further pillar of our ESG activities.In this respect,i
53、ncreasing the percentage of women we have in management positions is especially important to us.By appointing Clarisse Kopff and Mari-Lizette Malherbe to the Board of Management,we now have two women at the most senior level of leadership in our Group.More women also occupy positions at other manage
54、ment levels than in the previous year.In total,38.5%of management positions Group-wide are now held by women,thus putting us close to reaching our target of increasing this figure to 40%by 2025.Besides these specified non-financial targets,a whole host of further ESG initiatives and projects created
55、 added value for the environment,society and for our staff in 2022.One example is the Social Engagement Awards launched by the Board of Management last year.Open to everyone in the Group,the competition was an opportunity for staff to win additional funding for charitable projects they are involved
56、in.A total of 114 projects were entered into the running and then evaluated in-house 25 of which received donations ranging between 5,000 and 250,000.Winning submissions ranged from day trips for Ukrainian children affected by the war to solar-powered night schools for girls in rural India and susta
57、inable community farming to fight climate change and hunger.Its fair to say that 2022 was a value-creating year for our business and stakeholders alike.You can find further facts and figures in this report To our shareholders 7 Munich Re Group Annual Report 2022 and in our Sustainability Report due
58、for publication in April.This years Annual Report is the last we will publish on the basis of the IFRS 4 accounting standard we have followed to date.With effect from 1 January 2023,Munich Re will be applying the new IFRS 17 standard.The introduction of IFRS 17 will not make a difference to our prof
59、itability or impact our financial strength.What will change,though,is how we measure,present and disclose our insurance business.The new accounting framework introduces a more market-value-consistent regime to measure insurance contracts.IFRS 17 will increase the transparency of our financial report
60、ing and render our diversified business models financial performance substantially more visible in the financial world and among stakeholders in future.As you can see,Munich Re remains an attractive and reliable investment even in times of great uncertainty and change.On behalf of more than 41,000 s
61、taff members worldwide,I wish to thank you for the trust you place in our Group.Yours sincerely,Joachim Wenning To our shareholders 8 Munich Re Group Annual Report 2022 9 Combined management report Combined management report 10 Contents This report combines the management reports of Munich Reinsuran
62、ce 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 financial objectives as part of the Munich Re Group Amb
63、ition 2025 18 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 management in own operations 38 Human rights 41 Employe
64、e matters 43 Governance 48 Further details 53 About this statement 54 Business performance 57 Overall assessment by the Board of Management on the business performance and situation of the Group 57 Comparison of the prospects for 2022 with the result achieved 58 Business performance of the Group and
65、 overview of investment performance 60 Reinsurance Life and health 64 Reinsurance Property-casualty 65 ERGO Life and Health Germany 68 ERGO Property-casualty Germany 70 ERGO International 71 Financial position 73 Analysis of our capital structure 73 Technical provisions 73 Restraints on disposal 73
66、Capital position 73 Information in accordance with Sections 315a and 289a of the German Commercial Code(HGB)and explanatory report by the Board of Management 74 Analysis of the consolidated cash flow statement 76 Risk report 77 Risk governance and risk management system 77 Significant risks 79 Solve
67、ncy ratio under Solvency II 86 Other risks 86 Summary 88 Opportunities report 89 Business environment 89 Digital transformation 89 Social trends 90 Climate change and natural catastrophes 90 Expanding the limits of insurability 90 Combined management report 11 Contents Prospects 91 Outlook 2023 91 M
68、unich Reinsurance Company(information reported on the basis of German accountancy rules)93 Market environment and major factors of influence 93 Business performance 93 Financial position 98 Statement on Corporate Governance for the 2022 financial year pursuant to Section 289f and Section 315d of the
69、 German Commercial Code(HGB)99 Further information 99 Combined management report 12 Strategy Munich Re Group Annual Report 2022 Strategy Munich Re operates an integrated business model that combines primary insurance and reinsurance.This model enables us to pool our industry-wide areas of expertise,
70、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 chain.We are happy to expand our primary insurance activities on the basis of their stable earnings and have a strat
71、egic 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 management and risk management across the Group helps to create economic value for our shareholders,while safeguarding the ful
72、filment 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 Succeed,which are key pillars of the Munich Re Group Ambition 2025.Scale Scale represents growth in the Groups core busi
73、ness.There are opportunities for organic growth in reinsurance in particular owing to recent improvements in market conditions.In asset 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 Mu
74、nich Res mission to develop new business models throughout the value chain,in turn shaping markets.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
75、 shareholders,this means the sustained financial success of their investments in Munich Re.Clients 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
76、 Board of Management are to be women.Last but not least,Succeed allows communities to benefit from,in particular,the Groups ambitious climate protection targets in its asset management,in the(re)insurance business and in its own business operations.The success of the Munich Re Group Ambition 2025 wi
77、ll be measured using the following financial and non-financial targets:Our pledge to shareholders Improved RoE,2025 EPS growth1 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 20202025(earnings
78、 per share for 2020 as base year,per calculation of a normalised profit of 2.8bn;adjustment of+1.6bn for COVID-19 and other factors).2 In addition:dividend floor of at least previous years DPS.We want to generate an attractive return on equity(RoE)1 which,following the transition to the new IFRS rep
79、orting standards,should be between 14%and 16%(as opposed to the previous target range of 12%to 14%)by 2025.That would establish Munich Re as one of the best in its peer group.The higher RoE achieved in the course of the strategy period to 2025,compared to our previous financial targets and after tak
80、ing into account the new IFRS standards,will result from increased profitability,growth,and an improved return on investment.Continued earnings growth is poised to translate into higher earnings per share,with a targeted average annual rise of 5%or more by 2025.1 Further information about this indic
81、ator is provided in the combined management report in the section entitled“Tools of corporate management and strategic financial objectives”.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
82、rise by 5%or 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.The solvency ratio is to remain in the optimum range of 175220%.As an environmentally conscientious bu
83、siness,Munich Re will play its part in meeting the targets of the Paris Climate Agreement.The Group has therefore set itself ambitious climate protection targets for its investments,its(re)insurance transactions and its own business operations:Combined management report 13 Strategy Munich Re Group A
84、nnual Report 2022 Munich Re Group Ambition 2025 and beyond Today 2025 2050 Investments Financed GHG1 emissions Insurance Insurance-related GHG emissions(primary insurance,direct and facultative(re)insurance)Own operations GHG emissions from own operations No investment in companies with 15%revenue f
85、rom thermal coal2 10%revenue from oil sands Thermal coal No insurance for new coal mines or power plants,including infrastructure3,6 Oil and gas production No insurance for new or existing oil sand sites,including infrastructure6 and exposure as well as infrastructure in the Arctic3,7 Reducing our d
86、irect impact GHG-neutral in 2022 Additional GHG reduction per employee in 2022 Total4:Thermal coal4:Oil and gas4:25%to 29%emissions 35%emissions 25%emissions 35%emissions5 5%emissions Utilising the expertise of HSB Solomon 12%emissions per employee of the Munich Re Group Total:Thermal coal:Net zero
87、by 2050 Full exit by 2040 Full exit by 2040 Net-zero emissions by 2050 Net-zero emissions by 2030 Leading with high and credible ESG8 standards 1 Greenhouse gas emissions as measured using CO2 equivalents.2 Exceptions may be made on a case-by-case basis for companies that generate between 15%and 30%
88、of their earnings from thermal coal,provided there is an active engagement dialogue with the company in question.3 Our external auditor examined this information in the course of performing a limited assurance engagement on the non-financial statement.4 Scope 1 and 2 financed GHG emissions from list
89、ed equities and corporate bonds;for the total reduction target also from direct real estate.The reduction relates to the 2019 base year.5“Metric tonnes of thermal coal produced annually in insured mining activities by insureds/installed operational capacity(in megawatts)of insured coal-fired power p
90、lants of insureds”(used as an equivalent for an approximate assessment of the GHG emissions resulting from our clients activities,base year 2019).6 For details on the scope of application,please see the section“Insurance”of our combined non-financial statement.7 For stand-alone covers;for mixed cove
91、rs,taking into account a threshold value.8 This abbreviation stands for environmental,social,governance.Detailed information on all measures can be found in our combined non-financial statement.More specifically,the relevant GHG emissions4 in our investment portfolio are to be reduced by 2529%by 202
92、5,and,as part of our long-term ambition,brought down to net zero by 2050.Munich Re has already ceased to invest in companies that generate more than 15%of their earnings2 from thermal coal or that generate more than 10%of their earnings from oil sands.As for the exploration and production of oil and
93、 natural gas(primary insurance and both direct and facultative reinsurance business),Munich Re will be reducing its climate-related industry exposure in such a way that there will be no associated net GHG emissions by 2050.In an initial phase,we aim to reduce emissions by 5%by 2025,compared to the b
94、ase year 2019.At the same time,Munich Re will be reducing its coal-related exposure in its direct and facultative insurance business by 35%Group-wide by 2025(compared to the base year 2019),before eliminating this exposure altogether by 2040.Munich Re has already stopped insuring new coal-fired powe
95、r plants,coal mines,and oil sands mines.With its Ambition 2025,Munich Re has set itself a further goal for reducing GHG emitted by its own operations.Current GHG emissions are to be reduced by a further 12%per employee by 2025(base year 2019).Five years later,by 2030,the Group expects to achieve net
96、-zero GHG emissions in its business operations.Unavoidable GHG emissions will be compensated for by purchasing certificates.Combined management report 14 Strategy Munich Re Group Annual Report 2022 Reinsurance Munich Res strategic aim is to expand its position as a leading global reinsurer and,by me
97、ans of Global Specialty Insurance,to further consolidate our success in 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
98、 reinsurance,Munich Re is participating 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 emergin
99、g markets of Asia,the Middle East and South America,Munich Re focuses on targeted growth through service provision for cedants.A number of our digital underwriting services for cedants,which are part of our reinsurance business,have since reached a substantial size and show significant growth.Accord
100、ingly,Munich Re has combined Realytix,Risk Management Partners and Improvex in their own divisional unit,Digital Solutions Non-Life.Key goals include joint strategic development,a harmonisation of the technical infrastructure,further professionalisation of sales,and unit-wide coordination.With regar
101、d to primary insurance business within reinsurance,Munich Re focuses on North 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 new Board division Global Specialty Insurance aims to bring
102、about a stringent market and broker strategy,as well as the consistent management of previously independently operating units like American Modern Insurance Group Inc.(American Modern,the Hartford Steam Boiler Inspection and Insurance Company(HSB),Munich Re Specialty Insurance(MRSI),Munich Re Syndic
103、ate and Aerospace,and Great Lakes Insurance SE(GLISE).In this regard,Munich Res 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 lo
104、ng-term competitiveness 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,p
105、ractised client orientation 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 co
106、nstantly defining new 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 br
107、ands,alongside its own reinsurance covers.Our data strategy is a further,essential component.Following consistent investment in the area of data and analytics,both technologically and in terms of organisational and human resources,the future aim is to apply an enhanced business model to generate pro
108、fits using data.Munich Res portfolio of key innovation areas in reinsurance is regularly reviewed,and adapted or expanded in line with trends and developments.Two examples of this are crypto technologies and artificial intelligence(AI)as the foundation for new business models.Along with investing in
109、 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 field of business deploys venture capital to ensure the closest possible proximity to new tec
110、hnologies and emerging business models.The investment categories,which mirror the key areas of innovation,are closely interlinked in terms of structure and organisation.ERGO ERGOs strategic aim is to continue growing profitably through 2025 and,as regards return on equity(RoE),to become one of the t
111、op primary insurers in Europe.To this end,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
112、 further developing its underwriting capabilities and resolutely driving forward end-to-end process excellence,while reducing IT,sales and operating costs.In international business,ERGO concentrates on Europe and Asia,where high-growth markets such as India,China and Thailand offer particularly prom
113、ising opportunities.Digital Ventures puts a clear focus on generating strong growth both with partners in multi-level sales(B2B2C)and through purely direct offers from digital insurers like nexible.The ever-increasing changes in markets caused by digital transformation and new patterns of customer b
114、ehaviour demand flexibility in both services and products.In this context,ERGO is focusing consistently on the needs of its customers,who are increasingly using traditional and digital channels in parallel when seeking advice and purchasing insurance products.Combined management report 15 Strategy M
115、unich Re Group Annual Report 2022 The ongoing modernisation of IT infrastructures continues to play a key role here.In addition,ERGO is seeking a leading role in digitalisation by consistently driving forward robotics,AI and voice technology,with an eye to continually enhancing customer experience.E
116、RGO aims at further increasing its competitive strength by transferring technology-based solutions and enhancing cross-border synergies.ERGO will continue to rely on external and internal resources in generating innovative business ideas to further expand the business model along the entire insuranc
117、e value chain and unlock growth potential in the digital world.There will be a particular emphasis on creating and expanding ecosystems in mobility and travel,for example.Combined management report 16 Tools of corporate management and strategic financial objectives Munich Re Group Annual Report 2022
118、 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 assess and diversify them,creating lasting value for sharehol
119、ders,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,from which we derive various limitations and reporting thres
120、holds.A key element is our economic capital resources,which we determine in accordance with the Solvency II supervisory regime.We observe a range of important additional conditions.These include national accounting regulations,tax aspects,liquidity requirements,supervisory parameters,and rating agen
121、cy 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 solvency capital requirement under Solvency II,as determined on
122、 the basis of our certified internal risk model.Information on the internal model is provided in the risk report,in the section entitled“Risks depicted in the internal model”.Consequently,business activities are assessed not only according to their earnings potential,but also relative to the extent
123、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 comparability of alternative initiatives.Contrasting aspects have to be evaluate
124、d 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 the other hand,targets should be straightforward and understandable for inv
125、estors,staff,and the public.The Groups corporate management tools Our key corporate management tools at Group level are economic earnings and the IFRS consolidated result.Together with the other performance indicators,they constitute the most important financial indicators of relevance for us.The in
126、troduction of IFRS 9 and IFRS 17 in 2023 will lead to changes for individual,IFRS-based financial indicators.However,the introduction of these standards will have no direct impact on the Groups corporate management.Economic earnings The starting point for value-based management is the economic value
127、 added,which we determine based on the key corporate management tool of economic earnings.These 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 change in regulatory restrictions.In parti
128、cular,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 because of the effect of capital market para
129、meters 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 characteristics of each respective field of bus
130、iness.Our approach for property-casualty reinsurance is the adjusted result,which comprises the anticipated discounted cash flows of underwriting and an adjustment Combined management report 17 Tools of corporate management and strategic financial objectives Munich Re Group Annual Report 2022 for ma
131、jor claims.In life and health reinsurance,we apply value added by new business and the change in value of in-force business,which are based on the solvency balance sheet.As part of our asset-liability management,we consider the excess return from our investment operations in reinsurance.The manageme
132、nt tool of economic earnings is used directly for ERGO.IFRS consolidated result We use the IFRS consolidated result as a standardised,accounting-based benchmark for the Group and its fields of business.The standardised approach of the IFRS consolidated result makes it easier for outsiders to underst
133、and and interpret the information in it;as such,it is a pivotal part of our financial reporting in capital markets.With effect from 2023,calculation of the IFRS consolidated result will be based on IFRS 9/17.Other performance indicators Gross premiums written Gross premiums written comprise all prem
134、ium income due for payment in a financial year.Increases in gross premiums written are the prime indicator of corporate growth at the Group and segment levels.However,increases in this performance metric are not an inherently meaningful target for our Group,as we must always consider premium growth
135、as it relates to the profitability of the business we write.With the introduction of IFRS 9/17,gross premiums written will be superseded by insurance revenue under IFRS 17 as a key performance indicator.Combined ratio The combined ratio is regularly posted for property-casualty business.Calculated a
136、s the percentage ratio of the sum of expenses for claims and benefits plus operating expenses to earned premiums(all 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 premium income was sufficient
137、 to cover claims and costs.1 1 Expenses for claims and benefits not taken into account in the calculation of the combined ratio are set out in the table“Notes on determining the combined ratio”in the Notes to the consolidated financial statements.When regarded in isolation,the combined ratio is not
138、a sufficiently informative metric because it does not make it possible to assess economic profitability.It is also only of limited suitability for comparing the financial performance of competitors owing to differing calculation methods and portfolio mixes.Generally,we aim to keep the combined ratio
139、 as low as possible by means of good underwriting and claims management.As a result of the introduction of IFRS 17,the combined ratio will reflect the percentage ratio of insurance service expenses to insurance revenue,which,as before,are both net.Given that the combined ratio is based on an estimat
140、e of the present value of future cash flows and adjustment for the uncertainty of those future cash flows,it will be possible in future to assess economic profitability on the basis of the combined ratio.Technical result in life and health reinsurance including the result from insurance contracts wi
141、th non-significant risk transfer 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 track and post the technical result for life and health reinsurance.It shows the contri
142、bution made directly to the IFRS consolidated result and separates income derived from investment risk-taking from reinsurance business in particular.Some reinsurance operations are disclosed separately from the underwriting result owing to non-significant risk transfer.This part of the business and
143、 its contribution to the consolidated result is a further performance indicator for the life and health reinsurance segment.The total technical result under IFRS 9/17 consistently combines underwriting business under IFRS 17 with insurance-related financial instruments2 under IFRS 9 and,with effect
144、from 2023,supersedes the“technical result including the result from reinsurance contracts with non-significant risk transfer”under IFRS 4.2 Mainly comprises insurance contracts with non-significant risk transfer under IFRS 9.Combined management report 18 Tools of corporate management and strategic f
145、inancial objectives Munich Re Group Annual Report 2022 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-balance-s
146、heet unrealised gains and losses.1 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 greater uncertainties relate
147、d to this,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 in the“Strategy”chapter.Return on equity(RoE)The RoE i
148、s an important profitability KPI,which is of relevance in particular in the medium term.It is calculated on the basis of the IFRS consolidated result in relation to the average IFRS equity at the beginning and end of the year.IFRS equity is adjusted for unrealised gains and losses,1 The calculation
149、of the RoI is described in the“Investment result”table in the section“Business performance of the Group and overview of investment performance”in the chapter“Business performance”.changes resulting from currency translation outside profit or loss and remeasurement gains/losses from cash flow hedges.
150、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 the reinsurance and ERGO fields of business.The calculation of the RoE for
151、the fields of business allows for further adjustments to equity in order to eliminate distortions attributable to intra-Group transactions.The components of the return on equity,the consolidated result and average IFRS equity at the beginning and end of the year will be based on IFRS 9/17 with effec
152、t from 2023.The adjustments applied to average equity and the calculation of the return on equity will remain unaffected by the introduction of IFRS 9/17.Earnings per share The earnings per share figure reflects the IFRS consolidated result for a year in relation to the average number of outstanding
153、 shares at the beginning and end of the year.The earnings per share is essentially influenced by the IFRS consolidated 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 available under(52)Earni
154、ngs per share in the Notes to the consolidated financial statements.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 of share buy-backs or other capital measures.Solvenc
155、y 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 management report 19 Macroeconomic and industry envir
156、onment Munich Re Group Annual Report 2022 Macroeconomic and industry environment The global economys recovery from the recession triggered by the coronavirus pandemic slowed considerably in 2022.In Europe in particular,overall economic development was significantly affected by the Russian invasion o
157、f Ukraine.In consequence,and as a result of the economic sanctions imposed on Russia,extraordinarily high energy prices and uncertainty concerning the future energy supply hampered economic activity.Inflation reached record levels in many countries around the world and,combined with the considerable
158、 monetary tightening engaged in by many central banks,dampened economic growth.Rigorous state-imposed measures to control the coronavirus pandemic in China curbed economic activity there and contributed to disruptions in global supply chains.Capital markets Following a steep rise in inflation,major
159、central banks put an end to the period of low interest rates in 2022,significantly tightening their monetary policy.The Federal Reserve in the United States ended its net asset purchases in March 2022 and raised the federal funds rate.Over the course of the year,it raised interest rates in large inc
160、rements,such that the range of policy rates in December was 4.254.5%,425 basis points above the level at the start of the year.Furthermore,the Fed began to reduce the size of its balance sheet halfway through the year.The European Central Bank also put an end to its net asset purchases in March 2022
161、,though it did not start to raise interest rates until July.Its interest rate on the main refinancing operations was 2.5%at the end of the year,250 basis points higher than at the beginning of the year.Yields on ten-year government bonds in the USA and Germany rose sharply in 2022 as a result of hig
162、h inflation and considerable monetary policy tightening.By the end of December,yields on US and German bonds were high compared to the previous several years.Yields on ten-year government bonds%31.12.2022 31.12.2021 USA 3.9 1.5 Germany 2.6 0.2 Volatility on the international financial markets was hi
163、gher in the reporting year than in the previous year.Geopolitical uncertainty,extraordinarily high inflation,interest-rate hikes and fears of recession had adverse impacts.In the course of the year,important equity indices like the US Dow Jones and the Dow Jones(DJ)EURO STOXX 50 were at times more t
164、han 20%down on their levels at the end of 2021 and only made a partial recovery by the end of the reporting year.Equity markets 31.12.2022 31.12.2021 DJ EURO STOXX 50 3,794 4,298 Dow Jones Index 33,122 36,338 On the currency markets,fluctuations were more pronounced in 2022 than in the previous year
165、.At the end of December,the US dollar was significantly higher and the pound sterling significantly lower against the euro compared with the end of 2021,while the Canadian dollar had returned to approximately the same level at which it began the year.The annual average values against the euro,howeve
166、r,were higher in 2022 than in 2021 for both the Canadian dollar and the pound sterling.At 0.95,the average value of the US dollar in the reporting year was significantly higher than in the previous year(0.85).Further information on exchange rates can be found in the section“Currency translation”in t
167、he Notes to the consolidated financial statements.Insurance industry According to current extrapolations,premium income in the German insurance sector saw a slight drop in 2022.Premium income growth in property-casualty insurance and in private health insurance was higher than the long-term average.
168、Premiums in life business,on the other hand,were down significantly owing to a slump in single-premium business.On a global level,a number of major property-casualty primary insurance markets experienced strong growth in 2022,resulting in a slight increase in global premium income,even when adjusted
169、 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 business depending on claims experience,loss expectations and the individual market situation.Co
170、mbined management report 20 Munich Re Group Munich Re Group Annual Report 2022 Munich Re Group Munich Re is one of the worlds leading risk carriers and provides both insurance and reinsurance under one roof.This enables the Group to cover large stretches of the value chain in the risk market.Almost
171、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 are managed by MEAG,which also offers its expertise to private and institutional investors outsid
172、e 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 range of products,from traditional reinsurance to innovative solutions for risk assumption.Our compan
173、ies conduct their business from their respective headquarters and via a large number of branches,subsidiaries and affiliated companies.The reinsurance group also includes specialty primary insurers,whose business requires special competence in finding appropriate solutions.In ERGO,we combine Munich
174、Res primary insurance activities.Some 68%of gross premiums written by ERGO derive from Germany,and 32%from international business mainly from central and eastern European countries.ERGO also operates in Asian markets,particularly in India,China and Thailand.Overview Combined management report 21 Mun
175、ich Re Group Munich Re Group Annual Report 2022 Munich Reinsurance Company and ERGO Group AG 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 a
176、nd competences for key decisions between Group management and ERGO.Control and profit-transfer 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
177、,we also include not only specialised primary insurance activities that are handled by the reinsurance 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 dire
178、ct collaboration with primary insurers,but also via brokers and within the framework of strategic partnerships.In addition to traditional reinsurance business,we also operate as a primary insurer,participating in insurance pools,public-private partnerships and business in specialist niche segments.W
179、e also offer our clients a wide range of special products,customised insurance solutions 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
180、management know-how,we are in demand as a partner for products geared to our clients balance-sheet,solvency and rating-capital requirements,as well as their risk models.Focus of life and health reinsurance operations Our international life and health reinsurance business is written in the Life and H
181、ealth division.This is split into three geographical regions and one international unit that develops specialised solutions for savings and annuity products.The focus of the divisions business activities is on traditional reinsurance solutions that concentrate on the transfer of mortality risk.Moreo
182、ver,we are active in the market for living benefits products.These include products such as occupational disability,long-term care,and critical illness,which have seen increased demand.We also offer capacity for longevity risks.Besides assuming underwriting risks,we support our clients in developing
183、 new life insurance products.Moreover,we offer clients a wide range of increasingly Combined management report 22 Munich Re Group Munich Re Group Annual Report 2022 digital services,from medical expertise to automated risk assessment and claims handling solutions.In addition,we continuously expand o
184、ur tailor-made structured concepts for clients seeking to optimise their capitalisation,liquidity,or key performance indicators.Demand for reinsurance is also growing with regard to the capital market risks often embedded in savings products.We provide our clients with comprehensive advice on produc
185、t design 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 write the main portion
186、of our business via our Canadian branch and our subsidiary in the USA.In Europe,we have operations in Germany,the United Kingdom,Switzerland,Spain and Italy.At the same time,we have a strong local presence in Australia and South Africa,and in all important growth markets in South America,the Middle
187、East and Asia.Asian business is 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 with major inte
188、rnational insurance groups,globally operating Lloyds syndicates and Bermuda companies.It also pools our reinsurance know-how in the North American market in the area of property-casualty business,in particular that of our Munich Reinsurance America Inc.subsidiary domiciled there,as well as in the fi
189、eld of global large-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 m
190、arket proximity and regional competence.In the Latin American markets,our Brazilian subsidiary Munich Re do Brasil Resseguradora S.A.headquartered in So Paulo and our liaison offices in Bogot and Mexico City help to ensure client proximity.The division also includes the divisional unit Financial Ris
191、ks,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.Branches in Mumbai,Beijing,Seoul,Singapore,and Tokyo,along with liaison
192、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 subsidiary Munich Reinsurance Company of Africa Ltd.,headquartered in Johannesburg.The
193、se units and other liaison offices guarantee our competitiveness in these key markets.With effect from 1 January 2023,the Global Specialty Insurance(GSI)division comprises worldwide special-lines business,such as marine,aviation and space,along with specialty property-casualty business.The two large
194、 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 MRSI,Munich Re Specialty Group(MRSG)and the specialty insurance business produced by GLISE.The GSI units HSB and American Modern specialise
195、in products for which client proximity and like in reinsurance risk understanding as well as insightful claims handling are paramount.MRSI offers various specialty commercial insurance products in the North American market to better tap into the business potential in this market segment.MRSG,in turn
196、,is a leading provider of marine insurance and insurance solutions for the aviation industry.GLISE,which has its headquarters in Munich and operates branches in various locations including London and Dublin enables and facilitates the Groups ability to provide compliant insurance solutions in the af
197、orementioned areas.ERGO Munich Res second pillar is primary insurance business.Four separate units operate under the umbrella of ERGO:German business is concentrated in ERGO Deutschland AG.ERGO International AG manages international business.ERGO Digital Ventures AG is responsible for digitalisation
198、,while ERGO Technology&Services Management AG manages all of the technology activities.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
199、 products in combination 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 around 25 countries,with the focus on Europe and Asia.The latest information on ERGO can be
200、 found at .ERGO Versicherung AG is one of Germanys largest providers of property-casualty insurance across nearly all classes of business,offering a wide range of products for retail,commercial and industrial clients.ERGO Vorsorge Lebensversicherung AG is ERGOs life insurer for capital-market-linked
201、 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 and Victoria Lebensversicherung AG are concentrating on running off their traditional life insurance portfolios.DKV D
202、eutsche Krankenversicherung AG offers a full portfolio in the healthcare sector:comprehensive private health insurance,products designed to supplement statutory health cover,and Combined management report 23 Munich Re Group Munich Re Group Annual Report 2022 company health insurance.ERGO Krankenvers
203、icherung 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(agency sales)and ERGO Pro(structured sales fo
204、rce)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 divisions,depending on class of business.All of ER
205、GOs German sales organisations were developed further in 2022 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 channels.ERGO is thus making integrated use
206、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 is mainly responsible for monitoring,coordinating and managing ERGOs international activities.The focus is on profitable organic growt
207、h in European core markets and selected growth markets in Asia.In the reporting year,ERGO International AG further developed 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
208、 International AG has operations in Asia,including in China,India and Thailand.In 2022 in China,ERGO continued to pursue a number of growth activities in the life insurance market with the ERGO China Life Insurance Co.,Ltd.joint venture.In the Chinese property insurance market,ERGO is striving for s
209、trong growth and a simultaneous boost in profitability through its stake in Taishan Property&Casualty Insurance Co.,Ltd.The Indian joint venture HDFC ERGO General Insurance Company Ltd.also performed strongly in the past year and improved its market position overall;it now ranks fourth in the non-li
210、fe insurance market.In 2022 in Thailand,ERGO concentrated on the property insurance market,which is not only the largest in Southeast Asia but also shows significant growth potential.By taking on a majority shareholding in ThaiSri Insurance Public Co.Ltd.and acquiring Nam Seng Insurance Public Co.Lt
211、d.at the beginning of January 2023,ERGO achieved an important milestone on its path towards expanding its market position in Thailand.ERGO Digital Ventures AG is responsible for digital transformation at ERGO.It provides support via innovative sales strategies,manages the fully digital player nexibl
212、e,and is setting up new technologies,such as robotics,artificial intelligence,voicebots,process mining and virtual reality.ERGO Digital Ventures AG is also responsible for further developing ERGO Reiseversicherung AGs business,and driving ahead its digitalisation.ERGO Mobility Solutions seeks to est
213、ablish partnerships and alliances with vehicle manufacturers,dealerships and mobility service providers,and to further develop its mobility technology centre,which was set up in 2022.Examples of ERGO Mobility Solutions alliances include a strategic cooperation with Great Wall Motors in Europe and a
214、partnership with the mobility provider Sixt that was established in 2022.ERGO Digital Ventures AG is also responsible for the embedded insurance field of business,where it cooperates with partners such as Amazon and Revolut.ERGO Technology&Services Management AG is a dedicated arm of ERGO Group AG i
215、n charge of providing digital platforms,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
216、Private Limited in India,which was founded in early 2022.Combined management report 24 Munich Re Group Munich Re Group Annual Report 2022 Our brands The detailed breakdown of participations can be seen in the list of shareholdings in the Notes to the consolidated financial statements.Combined manage
217、ment report 25 Combined non-financial statement Munich Re Group Annual Report 2022 Combined non-financial statement Munich Res guiding principle has always been to act in a farsighted and responsible manner,to add value for and together with our stakeholders.Our Ambition 2025 sustainability strategy
218、,which applies across the Group,aims to create long-term value for our shareholders,clients and staff and for society as a whole.Ambition 2025 commits us to constantly improving and expanding our ESG agenda.The main focus of this strategy is on decarbonising our investments,our insurance activities,
219、and the emissions from our own operations.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,in the“Strategy”section.In the
220、 following statement we report on those sustainability 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 th
221、e end of the combined non-financial statement.The following topics were found to be particularly relevant in the 2022 reporting year:sustainability in investment and insurance activities,customer orientation and satisfaction,environmental management in our own operations,human rights,employee matter
222、s,compliance and responsible digital transformation,data protection and information security.Sustainability in investment and insurance Investment Strategy and objectives As global investors,at Munich Re we integrate ESG aspects into our investment policy.In addition,we have committed to moving our
223、portfolio towards a net-zero climate target.When choosing asset managers,we take their experience in 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 sig
224、natories of the Principles for Responsible Investment(PRI),which remain the foundation of our sustainable investment approach.In 2020,Munich Re joined the Net-Zero Asset Owner Alliance(NZAOA).Based on these two programmes,we have introduced our Responsible Investment Guideline,which covers the PRI,N
225、ZAOA and ESG criteria that apply to our investment management.Moreover,Munich Re has joined 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 the“Governance”section,our stra
226、tegic decisions on sustainable investment are taken by the Board of Managements ESG Committee,together with the ESG Management Team.In addition,the ESG Investment Committee specifically focuses on applying the ESG strategy to our investments,which is the responsibility of Group Investment Management
227、(GIM).Furthermore,the newly created GIM Reputational Risk Committee supports our sustainability ambitions 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.GIM,which reports
228、 to the CIO,is responsible for the sustainability of the Groups 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.T
229、his structure is also reflected at MEAG,whose Asset Management 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 port
230、folio-management teams.Regular training is offered to increase and improve awareness of ESG issues,for example on regulatory topics or ESG trends.In 2022,MEAGs own ESG governance structure was improved by the establishment of a MEAG ESG Committee at management level and a MEAG ESG Management Team.Ou
231、r investments are managed based on four pillars:systematic integration of ESG criteria in GIMs and MEAGs investment processes,engagement dialogues,defined exclusion criteria and ESG-focus investment areas such as renewable energy and green bonds.In addition,we demand that all of our asset managers a
232、pply ESG criteria when handling their portfolios.Combined management report 26 Combined non-financial statement Munich Re Group Annual Report 2022 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.Furth
233、ermore,we have adopted the Munich Re Group Ambition 2025,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 entire scope 1 and 2 financed GHG emissions1 from listed equities,corporate b
234、onds and direct real estate by 2529%compared to the 2019 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%
235、by 2025,and for investments in oil and gas in particular 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 communicated that new restrictions had been added to our g
236、uidelines in the oil and gas sector:as of 1 April 2023,in the direct alternative investment segment,we will no longer invest in projects specifically for new oil or gas fields,new oil-fired power plants,or midstream oil infrastructure.This applies to oil and gas fields that were not already producin
237、g,and to power plants or infrastructure that were not under construction or already operating,as at the deadline of 31 December 2022.In addition,as of 1 April 2023 we will no longer directly invest in equities or corporate bonds from listed oil and gas companies whose business model specialises in o
238、il and gas.We define oil and gas companies in this respect as publicly-traded companies listed under the Global Industry Classification Standard(GICS)Oil and Gas sub-sectors,with the exception of Integrated Oil&Gas.According to the Intergovernmental Panel on Climate Change(IPCC)2,there is a direct(i
239、nverse)correlation between climate change and biodiversity.Munich Re is therefore actively working towards factoring biodiversity into our ESG approach and our investments.In addition,we intend to increase the share of“ESG-focus”investments in our asset portfolio,as expressed in our goal of increasi
240、ng our renewable energy holdings to 3bn by 2025.1 Scope 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 dist
241、rict cooling).2 www.ipcc.ch/publication/climate-change-and-biodiversity-2/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 thermal coal have also
242、 been excluded from our investment universe or,in individual cases,encouraged actively to transition to renewables in the context of an engagement dialogue.Three specific engagement dialogues with coal companies that we started in the previous reporting period were continued in the reporting year.Th
243、rough the investor-led Climate Action 100+initiative,aimed at ensuring the worlds largest corporate GHG emitters take necessary action on climate change,we,along with other investors,participated in 4 further engagement dialogues in 2022 bringing our total to 11 since 2020.Direct investment in liste
244、d companies that generate more than 10%of their earnings from oil sands are also excluded.We also exclude the following from our direct investment universe:Investment in companies that manufacture controversial weapons(cluster bombs and land mines)Government bonds and notes from government-related i
245、nstitutions with an MSCI ESG rating of CCC Trade and investment in food commodities(e.g.grains/oilseeds,dairy products).Our ESG-focus investments specifically target assets that make a positive contribution to our ESG strategy.This currently includes investment in renewable energy,certified managed
246、forests,certified buildings and green bonds.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 h
247、eat,as well as for storage and transportation.Our standard for sustainable forest investment requires 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 i
248、f it features an environmental seal or other recognised certification from,for example,the Building Research Establishment Environmental Assessment Method(BREEAM),the Leadership in Energy and Environmental Design(LEED)or the German Sustainable Building Council(DGNB).Combined management report 27 Com
249、bined non-financial statement Munich Re Group Annual Report 2022 The classification of our green bond holdings is based on an assessment of the emissions documentation from WM Datenservice.By issuing the Munich Re subordinated green bonds,our goal is to support the drive towards a climate-friendly t
250、ransformation of the economy.In 2022 we issued another subordinated bond in the amount of US$1.25bn.Munich Re will use the capital raised with the subordinated green bond to finance or refinance suitable projects,in accordance with our Green Bond Framework.Projects include investments of equity and
251、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 criteria is a key component of our investment strate
252、gy.As a result,MEAG takes ESG risks and specifically determined ESG criteria into account in its investment decisions in the following asset classes:In addition to our ESG targets,we also report on our ESG-focus investments and the rating coverage of liquid asset classes.The MSCI ESG rating coverage
253、 of the liquid asset classes equity,corporate and government bonds and covered bonds is over 80%.In order to keep improving our sustainability strategy,through our PRI membership Munich Re is in constant dialogue with the PRI managers and also took part in selected conferences and workshops.With ref
254、erence to our PRI assessment 2020 discussed the previous year,PRI adapted the rating system for the 2021 reporting cycle.No assessment was performed by PRI in 2022.Metrics In order to meet our environmental objectives,we determine metrics based on the goals of the Munich Re Group Ambition 2025.The d
255、efined 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 ext
256、ernal provider ISS ESG to measure the financed GHG emissions from listed equities and corporate bonds.The calculation for direct real estate is based on defined data which is processed using a method developed by MEAG.Combined management report 28 Combined non-financial statement Munich Re Group Ann
257、ual Report 2022 Absolute financed GHG emissions(scope 1 and 2)1 t CO2e 31.12.2022 Prev.year Listed equities,corporate bonds and direct real estate 3,113,093 3,963,799 Listed equities and corporate bonds from companies in the thermal coal segment in particular mining and/or power generation 269,179 2
258、72,660 Listed equities and corporate bonds from companies in the oil&gas segment in particular drilling and production,refining and distributing 734,197 890,016 1 For listed equities,corporate bonds based on the available CO2e emissions from the data provider ISS ESG(usually CO2e emissions from the
259、previous year).For direct real estate,CO2e emissions for the 2022 financial year are approximated due to a lack of available data at the time of publication.They are based on available CO2e emissions from last year and CO2e-emission reductions as a result of implemented savings measures,provided the
260、y can be verified and measured.Development of GHG emissions(scope 1 and 2)compared to the 2019 base year(Munich Re Group Ambition 2025)1%31.12.2022 Prev.year Listed equities,corporate bonds and direct real estate 45.7 30.8 Listed equities and corporate bonds from companies in the thermal coal segmen
261、t in particular mining and/or power generation 47.5 46.8 Listed equities and corporate bonds from companies in the oil&gas segment in particular drilling and production,refining and distributing 28.9 13.8 1 For listed equities,corporate bonds based on the available CO2e emissions from the data provi
262、der ISS ESG(usually carbon emissions from the previous year).For directreal estate,CO2e emissions for the 2022 financial year are approximated due to a lack of data at the time of publication.They are based on available CO2e emissions from last year and CO2e-emission reductions as a result of implem
263、ented savings measures,provided they can be verified and measured.Regarding the total absolute financed GHG emissions,0.5 percentage points of the year-on-year reduction are attributable to updated emissions data that we received from our data provider.Interest-rate increases on the markets lead to
264、a reduction in the fair 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 37.7%(instead of 45.7%)relative to the 2019 base year.A further metric for assessing
265、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 76(t CO2e/m invested)on 31 December 2021;as
266、 at 31 December 2022,it was 75(t CO2e/m invested).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.We issued a gr
267、een bond in US dollars for the first time this reporting year.Green bonds 31.12.2022 Prev.year Change Volumes of green bonds issued in m 2,250 2,250 0.0 Volumes of green bonds issued in US$m 1,250 0 The following table provides an overview of our ESG-focus investments.They are shown together with th
268、e respective sum of their market values in the applicable asset class.ESG-focus investments 31.12.2022 Prev.year Change m%Green bonds 2,326 2,206 5.4 Renewables 2,368 1,724 37.4 Certified real estate 2,633 2,228 18.2 Certified forestry management 1,537 1,143 34.5 As an indicator of the availability
269、of ESG ratings,and to analyse ESG risks and opportunities,we calculate the share of the liquid asset classes equities,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 liq
270、uid asset classes%31.12.2022 Prev.year Rating coverage of liquid asset classes 95.4 96.1 To provide a standardised and 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 cl
271、asses for each industry sector.Combined management report 29 Combined non-financial statement Munich Re Group Annual Report 2022 Investments by asset class and sector m 31.12.2022 Prev.year Change Sector acc.to GICS per asset class%Equity Energy 10 252 411 38.7 Materials 15 572 1,121 49.0 Industrial
272、s 20 1,210 2,103 42.5 Consumer discretionary 25 664 1,548 57.1 Consumer staples 30 1,169 1,192 1.9 Healthcare 35 1,094 1,558 29.8 Financials 40 2,174 3,280 33.7 Information technology 45 1,037 1,425 27.2 Communication services 50 439 1,015 56.7 Utilities 55 529 1,035 48.9 Real estate 60 135 356 62.1
273、 Corporate bonds Energy 10 2,042 2,602 21.5 Materials 15 1,131 1,418 20.2 Industrials 20 2,782 3,073 9.5 Consumer discretionary 25 1,978 2,515 21.4 Consumer staples 30 2,202 2,399 8.2 Healthcare 35 1,790 2,101 14.8 Financials 40 38,692 45,481 14.9 Information technology 45 1,272 1,411 9.9 Communicat
274、ion services 50 2,501 3,100 19.3 Utilities 55 3,091 3,614 14.5 Real estate 60 808 941 14.1 Derivatives Financials 40 4,962 4,660 6.5 Mortgage loans Real estate 60 7,561 7,905 4.4 Real estate Real estate1 60 8,719 8,527 2.3 1 Measured at book values.As in the previous year,we are reporting on the pro
275、portions of our taxonomy-eligible economic activities in investment and insurance,as per EU Regulation 2020/852(EU Taxonomy Regulation).The EU Taxonomy Regulation aims to set up a standardised system for classifying what business activities can be qualified as sustainable,and under what conditions.T
276、he EU Taxonomy Regulation continues to focus on the environmental objectives of climate change mitigation and climate change adaptation.Based on information about the taxonomy eligibility of the companies we invest in,for which data has become available for the first time this year,our current focus
277、 with regard to the taxonomy remains recording the relevant metrics.At the same time,we are following regulatory developments very closely,particularly concerning the treatment of the insurance industry under the EU Taxonomy Regulation.In accordance with the provisions of Art.8 of the EU Taxonomy Re
278、gulation,in combination with Delegated Regulation(EU)2021/2178(Delegated Taxonomy Regulation 2021/2178),in the following we report metrics concerning the share of our taxonomy-eligible assets.We have made some adjustments to our calculations of the metrics compared to the previous year,due to the di
279、ffering interpretations of the requirements of the EU Taxonomy Regulation observable on the market,as well as an improved data basis.Therefore,the calculations are now based for the first time on the taxonomy-eligible turnover and taxonomy-eligible capital expenditure(CapEx)of the reporting companie
280、s that we have invested in and which we have disclosed as taxonomy eligible accordingly.The percentages of our direct real estate used by third parties,and other investments in non-financial assets,are also allocated to these shares in the 2022 financial year.A companys economic activities are taxon
281、omy-eligible if they are listed in the Delegated Regulation(EU)2021/2139(Commission Delegated Regulation 2021/2139),supplementing the EU Taxonomy Regulation.Taxonomy-eligible activities are deemed to be generally suitable for making a positive contribution to the respective environmental objective.T
282、he extent to which this general suitability actually materialises,i.e.whether a business activity actually makes a positive contribution towards the respective environmental objective,and at the same time causes no significant harm to a different environmental objective,is determined on the basis of
283、 technical screening criteria.If the“substantial contribution”criteria defined there and the principle of“do no significant harm”are fulfilled,the respective business activity is deemed to be“taxonomy aligned”.Financial undertakings need to provide information on taxonomy alignment only as of the 20
284、23 financial year,since it is based particularly on reports from non-financial undertakings that will only be published for the first time for the 2022 financial year.In terms of our investments,this means that,right now,the economic activities of the companies we invest in need to be analysed with
285、regard to their taxonomy eligibility,and in future with regard to their taxonomy alignment.Combined management report 30 Combined non-financial statement Munich Re Group Annual Report 2022 The key metric for assessing taxonomy eligibility is the share of taxonomy-eligible assets(“eligibility share”)
286、in proportion to the total assets that fall under the scope of application of the taxonomy KPIs.For the portion of our portfolio that represents an investment in the activities of companies obliged to publish a non-financial statement,we disclose both a turnover-based and a CapEx-based share.The sha
287、res reflect the taxonomy-eligible turnover and the taxonomy-eligible capital expenditure,respectively,that we finance through our investments at the reporting companies.The denominator accordingly constitutes the total of all investments in the scope of application of the taxonomy KPIs.As in the pre
288、vious year,we have undertaken our own classification for our real estate and other investments in non-financial assets.In the assumption that these assets are either fully taxonomy-eligible or taxonomy non-eligible,we have allocated them equally to the turnover-based and the CapEx-based shares for t
289、he 2022 financial year.Since the information is not yet available,we have done the same for our investments in financial institutions and asset managers:the previous years shares have thus been allocated equally to the CapEx-and turnover-based shares.With regard to investments in other primary insur
290、ers and reinsurers,the share of taxonomy-eligible insurance activities is considered as a turnover-based share and the share of taxonomy-eligible investments is allocated to the CapEx-based share accordingly.All assets that are theoretically able to finance economic activities fall within the scope
291、of the taxonomy-eligibility KPIs.This mainly includes the balance sheet items Investments and any receivables from insurance contracts with non-significant risk transfer disclosed under Miscellaneous receivables.Since the intangible assets that we hold and the real estate that we use,as well as furt
292、her property,plant and equipment,are not held for the purpose of financing economic activities,they have not been included contrary to the previous year.All other balance sheet items have been excluded from the metrics like in the previous year,for example insurance items that are classified as asse
293、ts for accounting purposes,or cash resources such as cash at banks,cheques and cash in hand.These items are included in Other assets in the table below.Furthermore,Investments in governments,central banks and supranational issuers are also outside the scope of application for taxonomy eligibility.In
294、 our interpretation,investments in governments are deemed to also include investments in German federal states(Bundeslnder),regions,municipalities,cities and communities.Contrary to the previous year,issuers with EU state guarantees have no longer been allocated to the Investments in governments,cen
295、tral banks and supranational issuers,but have been examined for taxonomy-eligibility instead.These methodological adjustments affect the line items Assets within the scope of application used to assess taxonomy eligibility,Investments in governments,central banks and supranational issuers,and Other
296、assets,and they apply prospectively.The following table shows the scope of application of the taxonomy KPIs,based on the IFRS carrying amounts in proportion to the balance sheet total,for the current year compared to the previous year.Scope of application of the taxonomy KPIs as per Art.8 of the EU
297、Taxonomy Regulation 31.12.2022 Prev.year Change m%m%Assets within the scope of application of the taxonomy KPIs 147,352 49.4 152,841 48.9 3.6 Assets within the scope of application used to assess taxonomy eligibility1 45,829 15.4 60,570 19.4 24.3 Assets within the scope of application not used to as
298、sess taxonomy eligibility 101,523 34.0 92,271 29.5 10.0 Assets in companies that are not obligated to publish a non-financial statement 96,180 32.2 87,600 28.0 9.8 Share of derivatives 5,343 1.8 4,671 1.5 14.4 Assets not within the scope of application of the taxonomy KPIs 151,218 50.6 159,564 51.1
299、5.2 Investments in governments,central banks and supranational issuers2 80,940 27.1 101,126 32.4 20.0 Other assets 70,278 23.5 58,438 18.7 20.3 Balance sheet total 298,570 100.0 312,405 100.0 4.4 1 The difference from the previous year is mainly due to changes in methodology.2 The change is mainly d
300、ue to lower book values resulting from an increase in interest rates.Combined management report 31 Combined non-financial statement Munich Re Group Annual Report 2022 Derivatives classified as assets for the balance sheet,as well as investments in companies which are themselves not obligated to publ
301、ish a non-financial statement(for example companies whose registered seat is outside the EU),are not included in the actual assessment of taxonomy eligibility,even though they theoretically fall within the scope of application.We mainly use data from the provider ISS ESG to identify such companies.W
302、hen assessing the taxonomy eligibility of investments in companies,information may be used only if it is based on actual information provided by the underlying investee undertaking engaged in the economic activities to be classified.As a financial undertaking,we therefore mostly rely on taxonomy inf
303、ormation published by the companies that we are invested in.These companies also only reported under the EU Taxonomy Regulation for the first time for the 2021 financial year,meaning that the data they reported was available to us for the 2022 financial year.Given this improved data basis,assets tha
304、t in the previous year were shown as“Assets within the scope of application whose taxonomy-eligibility can only be estimated”were this year able to be allocated to either the taxonomy-eligible/non-eligible assets,or to the assets in companies that are not obligated to publish a non-financial stateme
305、nt.The required taxonomy-eligibility data was also made available to us from the provider ISS ESG.Since the previous years taxonomy KPIs consisted exclusively of real estate and other investments in non-financial assets,the data basis for this financial years taxonomy KPIs was thus significantly bro
306、ader.Mortgage loans to private households continue to be classified as eligible in this regard,since they can be categorised on the basis of their contractually agreed use of proceeds,according to the technical screening criteria used for taxonomy assessments.Similarly,this year mortgage loans to co
307、mpanies will be assessed for taxonomy eligibility as well.Where the contractually agreed use of proceeds is unspecified,loans to only those companies are included which are required to publish a non-financial statement.As for unconsolidated funds,a“look-through”to the assets they contained was under
308、taken by us already in the previous year.This year,we additionally looked through the assets in infrastructure investments held via holdings or special-purpose vehicles(SPVs)for taxonomy eligibility,together with the provider TAUW.We have reported both our investments in asset-backed securities(ABS)
309、as well as in private equity under Assets in companies that are not obligated to publish a non-financial statement.Based on the regional distribution of our ABS portfolio as well as random samples of originators known to us,we came to the conclusion that the majority consisted of companies not requi
310、red to publish.Because insufficient data was available,we were also unable to make an assessment of the ultimate beneficiaries for a large portion of our investments in ABS.Our review also found that our private equity holdings mostly consisted of investments in SMEs,which are accordingly not obliga
311、ted to publish non-financial information.Our look-through of holdings and SPVs increased the taxonomy-eligibility figure,since particularly those indirectly held investments in environmentally sustainable activities such as renewable energy,as well as investments in forests,are included therein.Taxo
312、nomy-eligible assets as per Art.8 of the EU Taxonomy Regulation for the financial year 2021 31.12.2021 m%Taxonomy-eligible assets 13,893 9.1 Taxonomy-non-eligible assets 1,167 0.7 Assets within the scope of application whose taxonomy eligibility can only be estimated 45,510 29.8 Assets within the sc
313、ope of application not used to assess taxonomy eligibility 92,271 60.4 Assets within the scope of application of the taxonomy KPIs 152,841 100.0 Combined management report 32 Combined non-financial statement Munich Re Group Annual Report 2022 Taxonomy-eligible assets as per Art.8 of the EU Taxonomy
314、Regulation for the financial year 2022 31.12.2022 m%Turnover-based figures1 Taxonomy-eligible assets 29,986 20.4 Taxonomy-non-eligible assets 13,003 8.8 Assets from financial investee undertakings not used to asses taxonomy eligibility2 2,840 1.9 CapEx-based figures1 Taxonomy-eligible assets 30,370
315、20.6 Taxonomy-non-eligible assets 11,997 8.1 Assets from financial investee undertakings not used to asses taxonomy eligibility2 3,462 2.3 Assets within the scope of application not used to assess taxonomy eligibility 101,523 68.9 Assets within the scope of application of the taxonomy KPIs 147,352 1
316、00.0 1 Real estate used by third parties and other direct investments in non-financial assets as well as mortgage loans are allocated equally to both the Turnover-and CapEx-based figures since,according to our own assessment,each asset is either fully eligible or non-eligible.2 It corresponds to our
317、 investee undertakings investments in derivatives and in undertakings that are not obliged to publish a non-financial statement and which are not part of the eligibility assessment performed by our investee undertakings.The rise in taxonomy-eligible assets from 9.1%to 20.4%(turnover-based)or to 20.6
318、%(CapEx-based)is mainly attributable to the look-through applied to assets in infrastructure investments and the eligibility review(based on the use of proceeds)of mortgage loans where the counterparty is an undertaking.Both of these examinations were undertaken for the first time in the reporting y
319、ear.Our taxonomy-eligible assets also increased as a result of the availability of information on taxonomy-eligible turnover and/or taxonomy-eligible capital expenditure from investee companies that only reported under the EU Taxonomy Regulation for the first time for the 2021 financial year.Similar
320、ly,there was an increase in our non-taxonomy-eligible assets,mainly due to the first-time availability of information on non-taxonomy-eligible turnover and/or non-taxonomy-eligible capital expenditure from our investee companies.The technical screening criteria for nuclear and gas-related activities
321、 will apply as of 1 January 2023(Delegated Regulation(EU)2021/2139).Nevertheless,the nuclear and gas-related activities defined there are wholly allocated to the taxonomy-non-eligible assets for the 2022 financial year.This is due to the fact that our investee companies will take the technical scree
322、ning criteria into account only as of 2023,in their reporting for the past financial year.For investments in assets that we have assessed ourselves,590m(0.4 percentage points of the taxonomy share)are associated with gas-related activities.They consist exclusively of investments associated with the
323、construction or operation of power-generation plants that produce electricity from gaseous fossil fuels as per Section 4.29 of Annexes I and II of the Delegated Regulation(EU)2021/2139.We have classified them as taxonomy eligible in their entirety.As a result of the broader scope of companies that a
324、re required to publish a non-financial statement,and the trend towards better data resources,we assume that our share of taxonomy-eligible assets as well as the taxonomy eligibility in the market will continue to improve.Insurance activities Strategy and objectives The main pillar of our corporate r
325、esponsibility is the taking and diversification of risks in primary insurance and in reinsurance.Our objective to create sustainable economic value is enshrined in the key principles of our Group-wide corporate strategy,in our Munich Re Group Ambition 2025 and in our sustainability strategy.Our dedi
326、cation to conducting our business responsibly is underlined by our commitment to key industry initiatives,including the Principles for Sustainable Insurance(PSI)and the Net-Zero Insurance Alliance(NZIA),and by signing the UN Global Compact.Strategic sustainability objectives are defined by the Board
327、 of Managements ESG Committee mentioned earlier.The individual divisions are responsible for implementing these strategic targets and achieving the objectives for the business they underwrite.To implement the strategic targets,the respective divisions regularly report to the ESG Management Team.In o
328、ur insurance business,we take account of ESG aspects in underwriting.In addition to defining exclusion criteria in mandatory guidelines,we aim to support the mitigation of climate change by insuring new,climate-friendly technologies.Our insurance solutions aim to make those technologies more attract
329、ive and financially viable for investors.In addition,the insurance products we offer increase resilience to the economic consequences of natural catastrophes.In order to help achieve the goals of the Paris Agreement,in July 2021 we undertook,in the context of our NZIA membership,to lower emissions a
330、ssociated with our business to net zero by 2050.Corresponding global calculation and reporting methods,as a basis for the measurement,were published by the Partnership for Carbon Accounting Financials(PCAF)for the first time in November 2022.Their application to derive quantitative targets will only
331、 be possible in the future and,in accordance with the Target Setting Protocol published by the NZIA in January 2023,can be expected at the latest by July 2024.We aim to continually expand the availability and quality of the internal and external data necessary for this purpose in the coming years.As
332、 part of our Munich Re Group Ambition 2025,in 2020 we set ourselves our own emission reduction targets with respect to thermal coal and oil and gas production in our primary insurance and facultative and direct(re)insurance business.This also encompasses treaty-like business in the form of facultati
333、ve facilities if it includes the option to Combined management report 33 Combined non-financial statement Munich Re Group Annual Report 2022 decline individual risks.Our reduction targets are based on approaches we developed ourselves,since global calculation standards did not yet exist at the time of publication in late 2020.Moreover,we have undertaken to phase out the(re)insurance of thermal coa