20 NewRe Annual Report 2021 Management Report Overall NewRe generated a favourable result of EUR 156 m compared to the previous year s figure of EUR 109 m NewRe s gross premiums dropped from EUR 5 2 bn in 2020 to EUR 2 5 bn in 2021 driven mainly by one Life contract which was terminated by the client due to a change in US regulations The termination of the US Life contract also affects net premiums and acquisition costs gross The decline in premiums was partially offset by growth in all business segments The motor business in the UK in particular increased in line with the overall growth in Non life business The Change in technical provisions gross line item decreased driven by the structured Non life business In 2021 NewRe suffered European NatCat losses of EUR 95 m due in particular to the flooding in Germany which was one of the largest European events in the past few years In addition COVID 19 claims of approxi mately EUR 50 m once again burdened the Life result in the reporting year However the claims were partially offset by a retrocession which is reflected in prem iums ceded and claims paid ceded Despite significant losses from NatCat events and COVID 19 NewRe gener ated a positive technical result of EUR 41 4 m 110 5 m in 2020 This favourable overall result stems from NewRe s well diversified business mix in particular from profits of the Non US Life and European Non life businesses Staff NewRe has 119 employees at the end of 2021 with 111 full time equivalents FTEs at the beginning and 111 FTEs at the end of 2021 average for the year 111 FTEs Innovation and development In Non life reinsurance we strive to offer solvency and earnings protection In Life reinsurance our focus is on supporting primary insurance companies in offering innovative products to their clients and on covering the risks associated with those new products Significant events Non life was impacted by floods and severe weather events in central and western Europe Combined both events weighed down the bottom line by approximately EUR 95 m net of retrocession Risk management Due to the volatile nature of the reinsurance business and the potential for significant losses NewRe has a dedi cated risk policy and maintains a strict risk management system The features of this risk management system are explained in more detail in the relevant section of this report see page 21 Risk assessment Outlook In NewRe s Non life reinsurance business 1 January is the date on which a significant portion of the book is due for renewal The 1 January 2022 business renewals saw growth in both the Property and Casualty traditional segments which was offset by the cancellation of a significant single structured motor quota share treaty In total premium volume decreased by EUR 85 m to EUR 609 m for the 1 January 2022 renewal On a risk adjusted basis prices in Casualty essentially remained level or increased slightly In loss free NatCat markets Property saw a fairly stable rating environ ment on a risk adjusted basis In loss affected countries such as Germany prices increased significantly follow ing the 2021 flooding In risk or frequency protection rein surance business we profited from a favourable mar ket environment Overall the growth in non proportional business overcompensated the decrease in propor tional business resulting in a higher profitability and a decreased combined ratio of the entire portfolio Life reinsurance business is written throughout the year In the light of NewRe s positioning in the market and its growth strategy bottom line growth is expected Business in the pipeline and first signings in 2022 especially in Germany and the US are supporting this expectation Although the overall outlook for NewRe s business in 2022 is favourable the reinsurance business by nature remains highly volatile The natural catastrophe rein surance segment and the parametric weather business in particular may be affected by large loss events and weather extremes In addition NewRe has significant risk in the Life segment from a number of possible events such as a pandemic large losses lapse and losses on our market risk transfer portfolio On the basis of NewRe s current capitalisation and growth expectations future profits will be distributed as dividends to Munich Re NewRe Annual Report 2021 Inhalt indd 20 25 04 22 10 19

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