Munich Reinsurance Company

Successful renewals in reinsurance business and first-time application of IAS 32/39 (December 2003) as at 31 December 2003

At 1 January 2004 about 60% of Munich Re's total property-casualty reinsurance portfolio was up for renewal. The Group was able to increase its premium volume for renewed business by 9% on average. This growth is ascribable almost equally to rate increases and higher treaty shares. New business accounted for 10% of the business written.

For its financial statements as at 31 December 2003, Munich Re will apply the new version of IAS 32/39 adopted by the IASB on 17 December 2003. In accordance with IAS 32.97/IAS 39.104, both standards will be applied retroactively. The restatements needed for the business years prior to 1 January 2002 will be recognised in equity without impact on the income statement. As far as the business years 2002 and 2003 are concerned, the new provisions of IAS 39 will be reflected in the income statement figures.