Press release

• Successful reinsurance renewals at 1 January 2004 
  
  
• Earnings potential substantially increased 
  
  
• First-time application of IAS 32/39 (December 2003)
   

In the renewal of its property-casualty reinsurance business, Munich Re adhered to its goal of achieving sustainable underwriting profits. For the third year in succession, the Group achieved significant improvements in prices and conditions.

Stefan Heyd, member of Munich Re's Board of Management: "In the continuing good situation on the reinsurance market, we have above all achieved more favourable treaty conditions. We thus managed to substantially improve our portfolio's risk structure and with it our profit potential, although price competition is mounting in some sectors. Our policy is geared to securing and increasing our profitability long term."

The marked enhancement of this earnings potential was mainly attributable to the consistent improvements in the conditions of many insurance treaties. Examples include the introduction of additional limitations in business interruption covers, the greater implementation of event and annual aggregate limits in covers for natural hazards, and higher underlying retentions for primary insurers in motor liability insurance.

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. 21% of the business was not renewed, as Munich Re consistently pursued its strategy of selective and profit-oriented underwriting. Therefore the renewal season in property-casualty reinsurance will probably show a slight decline in premium overall for 2004.

For its financial statements as at 31 December 2003, Munich Re will apply the new version of IAS 32/39 adopted by the International Accounting Standards Board (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.

Owing to the substantial additional work involved in this change, the provisional figures published on 17 March 2004 for Munich Re's consolidated financial statements will be less detailed than last year. The balance sheet press conference is scheduled to take place in Munich on 15 April 2004.

We will report on the provisional figures for 2003 in a telephone conference at 10 a.m. on 17 March 2004.

Münchener Rückversicherungs-Gesellschaft
signed Heyd          signed Küppers