Ulan Bator, October 16th, 2014 Günter Becker
Courtesy Oyu Tolgoi
Risk Management and Insurance Solutions for Mongolian Industries
Disclaimer
Münchener Rückversicherungs-Gesellschaft (“Munich Reinsurance Company”) is a reinsurance company organized under the laws of Germany. In some countries, including in the United States, Munich Reinsurance Company holds the status of an unauthorized reinsurer. Policies are underwritten by Munich Reinsurance Company or its affiliated insurance and reinsurance subsidiaries. Certain coverages are not available in all jurisdictions.
This presentation contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forward-looking statements or to conform them to future events or developments.
This presentation and its contents are provided to the recipient for information only on an “AS IS” basis. The recipient is not permitted to create any distributions beyond those in the recipient’s organization who have a need for the material. The recipient is furthermore not permitted to create any modifications, reproductions publications or to use it in any other kind for commercial or public purposes. Neither Munich Re nor any of its affiliates nor any of its employees makes any representation or warranty of any kind with respect to the accuracy, completeness, or applicability of this material to any recipient’s circumstances. This material is not intended, nor shall be relied upon by any recipient, as legal, underwriting, financial, investment advisory or any other type of professional advice. The recipient should consult with its own counsel or other advisors to verify the accuracy and completeness of any information used and to determine its applicability to the recipient’s particular circumstances, including but not limited to applicability of any securities law. Munich Re, its affiliates, and their employees disclaim any and all liability whatsoever resulting from any use of or reliance upon this material that would result in any duty of any kind to any recipient, and recipient hereby acknowledges and agrees to the foregoing terms of receipt and use of the material presented.
Munich RE Group
*This listing is incomplete and provides no precise indication of shareholdings.
Munich Re (Group)*
Asset Management
Primary insurance
Reinsurance Munich Health
Corporate Insurance Partner Great Lakes Reinsurance (UK) PLC KA Köln.Assekuranz Agentur GmbH MSF Pritchard Syndicate 318 Temple Insurance Company Watkins Syndicate
Belgium
Munich Re Stop Loss ®
Munich Health North America ®
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Outlook 2014 Munich RE Group Financials
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Gross premiums written
Net result
Return on investment Target 20141 ~€48bn
Munich Re (Group)
Reinsurance Primary insurance Munich Health
Focus on bottom-line prevails Uplifting annual guidance after strong half-year performance
RoRaC target of 15% after tax over the cycle to stand
Combined ratio
Combined ratio
Combined ratio
Net result Net result Net result
Target 2014 ~3.5% (prev. 3,3%)
Target 2014 €3bn
Target 2014 ~95% (prev. ~94%)
Target 2014 ~95% Target 2014 ~99%
Target 2014 €2.3–2.5bn Target 2014 €400–500m Target 2014 ~€100m
1 By segment: Reinsurance slightly above €26bn, primary insurance slightly above €16.5bn, Munich Health slightly below €5.5bn.
Solvency and ratings
Rating agency
A.M. Best
Fitch
Moody‘s
Standard & Poor‘s
Rating
A+ (Superior)
AA- (Very strong)
Aa3 (Excellent)
AA- (Very strong)
Outlook
Stable
Stable
Stable
Stable
Last Changes
7 Sept. 2007
19 July 2005
17 March 2005
22 Dec. 2006
Ratings
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Present in all markets Reinsurance activities
6
Chicago Columbus
Montreal
Philadelphia
Princeton
San Francisco
Toronto
Bogotá Caracas Mexico Santiago de Chile São Paulo
Auckland Melbourne Sydney
Beijing Calcutta
Hong Kong Kuala Lumpur Mumbai Seoul Shanghai Singapore
Munich London Madrid Malta
Moscow Paris
Accra Cape Town Nairobi Port Louis
Milan
Zurich
Amelia
New York
Vancouver
Buenos Aires Johannesburg
Taipei Tokyo
Atlanta
Hartford Dubai
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Global Clients, Lloyd's, Munich Re America, Munich Reinsurance Canada Non-Life Group
Structure of the reinsurance group
Global Clients/North America
Europe/Latin America
Germany, Asia Pacific and Africa
Europe (except Germany), Latin America
Germany, Middle East, Africa, Asia, Australasia, Greater China, Southeast Asia
Special and Financial Risks
Corporate Insurance Partner, , Aviation and space, credit and bonding, enterprise and contingency risks, New Re Zurich, Great Lakes UK, Munich Re Capital Markets, Agro
Corporate Underwriting
Corporate Underwriting and Knowledge Networks
Life
Life reinsurance worldwide
Corporate Insurance Partner
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Lines of business: pooled knowledge and expertise
Corporate Insurance Partner A. Pröbstl
General Property D. Herrenpoth
Energy A. Wimmer
Engineering S. Lämmle
Casualty M. Hillmann
Special Enterprise Risks NN
Client Management J. Sirr
Claims & Operations A. Studener
Liability NA S. Schmitt
Europe/LA P. Steenwegen
North America 2 B. Hartinger
London market2
A. Fox
Power & Utilities R. Abt
Construction A. Dosch
Claims 2 A. Knoerchen
Operations T. Dierkes
Wording | Globalisation F. Montjoie
Mining G. Becker
US market1
E. Leibrock
1 Part of Munich Reinsurance America, Inc. 2 Part of Great Lakes Reinsurance (UK) PLC 3 Part of Münchener Rückversicherungs-Gesellschaft, London Branch 4 Part of Münchener Rückversicherungs-Gesellschaft, Singapore Branch 5 Part of Great Lakes Reinsurance (UK) PLC
North America 1 C. Wiegele
Oil & Gas H. Lund including London desk²
Claims 1 S. Hirlinger
Liability E/APA-LA S. Hüskes
London market3
W. Martini
US market1 R. Beck
Spec. Lines2
P. Woods
Singapore4
S. Vetters
Green Tech Solutions M. Schrempp
Art & Financial Solutions
A. Fraser5
New Risk Solutions C. Storer
Strategy & Analytics W. Boffo
Claims handling & Monitoring C. Schmid
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Agenda
What makes Mining risks special ?
Dealing with „Mother Nature“
A mine is never „Ready to Use“
What is the „Insured Property“
Information Required
Company Information
Risk Information
Risk Management Information
Requested Coverage
„Popular Losses“
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Dealing with „Mother Nature“
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Mine location is determined by „Mother Nature“
High Altitude (Yanacocha Gold Mine – Peru)
Diavik Diamond Mine (Rio Tinto - Canada)
Dealing with “Mother Nature” High Altitude
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Some mines are located high up in the mountains
Examples:
Grassberg 4200m
Antamina 4100m
Yancoccha 4200m
Pascua Lama 5200m
(Grassberg is located in Indonesia, the others are in the Andes)
Never Ready - Constant Change
A mine is never complete – is constantly under construction
Hotel Blue Sky Ready to use
Batu Hijau Mine, Indonesia Being worked on
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Mining Insurance is Property Insurance
Insurable Property ? Sükhbaatar Square, Ulan Bator
Insurable Property ? Oyu Tolgoi Mine
Defining Insured Property 11.10.2014 19
Property in Mining Operations
Insurable Property ? Oyu Tolgoi Mining Equipment
Insurable Property ? Oyu Tolgoi Processing Plant
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Do you know what that is?
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Miners have a special language
HD-Truck Shovel
Shearer
Slope
Bench
Shaft
Gob Dozer
Crusher
Anchor
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And Underwriters know that…..
The Objective is to find a risk adequate and sustainable risk transfer solution for you
Mining Risks are very special Property Risks
The requirements stated in the following reflect the information needed by Underwriters at Munich RE Risk Solutions (Mining Team) to be able to properly evaluate a mining in respect to property insurance. Coverage is not granted merely on providing of such information, it only initiates the process of risk evaluation.
Information Required
Name of the Company
Location of the Company (registered office)
Shareholders
Holdings/Subsidiaries
Fields of Activity
Corporate Sustainability
Checking for existing participation and/or (legal) restrictions
Company Details
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Information Required
Type (Mining, Processing, Storage) incl. details about
Method and Equipment of Mining, Processing, etc.
Commodity, Product
Geocodes (Longitude/Latitude)
Environment (e.g. Geology, Access)
Values per Location (PD/BI) Sum/Explaine
Main Exposures and Challenges
Determining the (Physical) Risk Exposure
Risk Details
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Information Required
Responsibilities (e.g. Org Charts, Standards
Emergency Response
Loss Prevention Measures (physical)
Maintenance and Spare Parts Strategy
Reports from qualified surveyors incl. recommendations (plus: your reply)
Loss History
LTIF
Etc.
Evaluation of Risk Quality
Risk Management
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Information Required
Slip (Insured, Reinsured, Limit, Deductibles, Sublimits, Claims Protocol)
Policy wording (Exclusions, Definitions)
Special conditions
BI Calculation
Coverage requested
Defining Coverage and Agreement
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Pit Wall Failure
Landslide 2003: 2.5 million tonnes Landslide 2013: 145 million tonnes