Press release

• Munich Re Group intends to substantially increase profitability in the U.S. as part of its global Changing Gear initiative
  
  
• Munich Re announces new client-centric structure for its U.S. operations
  
  
• New Munich Re America management team named
  

Munich Re today announced a new long-term profitable growth strategy to increase direct and broker reinsurance, as well as primary insurance, in the U.S. property-casualty market. A new Munich Re America management team has been named, effective January 1, 2008, to implement this strategy beginning in 2008.

With over 50 billion USD in reinsurance premiums and nearly 500 billion USD in insurance premiums, the U.S. non-life (re)insurance market is one of the largest and most competitive in the world. Munich Re considers this a core market and is one of the leading risk carriers in the United States.

"Under the leadership of John Phelan, the company has implemented strenuous underwriting controls and cycle management to accomplish a turnaround of its business, producing positive results from recent underwriting years. Munich Re America is ready for the next phase of its development. The Munich Re Group aims to substantially increase its profitability in the U.S. by broadening and deepening its client relationships," said Dr. Torsten Jeworrek, head of the Munich Re Group’s worldwide reinsurance operations. "During all phases of the reinsurance cycle Munich Re stays fully committed to risk adequate pricing."

A new client-centric structure will foster Munich Re’s reinsurance strategy of underwriting excellence and profitable growth. The Munich Re Group’s goal is to achieve the full potential of U.S. property-casualty market. Over the course of the market cycle it aims for sustainable, profitable growth. It will increase profitability from direct and broker reinsurance as well as primary insurance by

• employing a client-centric approach to develop client strategies and reinsurance solutions that leverage the Munich Re Group’s expertise and risk appetite;
• developing closer broker relationships to support clients’ needs;
• building a dominant presence in niche primary insurance segments.

In implementing the client-centric reinsurance strategy, the Munich Re Group will align its U.S. business model along client lines. Each U.S. property-casualty reinsurance client will have a single Munich Re Group client manager to ensure a consistent Group-wide approach across business units and channels (direct and broker). The client manager will serve a client’s needs throughout the reinsurance life cycle, including reinsurance placement structuring, underwriting, actuarial, claims and other services for that client.

Each reinsurance brokerage firm will be assigned a dedicated broker manager who will focus on fostering greater respective organizational alignment and on mutual growth opportunities.

Clients and brokers will benefit from better responsiveness and consistent risk appetite with respect to the U.S. market’s needs.

"Our coordinated approach will significantly improve efficiencies in serving our clients and brokers, and will emphasize the alignment of Munich Re America with the Group’s underwriting standards and methodologies. This will mean providing consistent risk appetite, pricing, combined capabilities and above all the whole Group capacity to all Munich Re Group clients regardless of distribution channel," said Dr. Peter Roeder, the newly appointed board member with responsibility for Global Clients and the U.S. and Canada non-life reinsurance operations.

Currently, Munich Re America is structured by distribution and product type, e.g. treaty and facultative. Starting next year, Munich Re America will have a new structure and management team aligned by client type to support its strategy, comprised of the following changes:

• The new National Clients division will have account management responsibility for all Munich Re Group U.S. national property-casualty clients placing business both direct and through reinsurance brokers. It will be led by Pina Albo, who was named President of the division. Currently, Pina is an Executive Manager in Munich responsible for the United Kingdom and Ireland.
• The new Regional Clients division will have responsibility for all Munich Re Group U.S. regional property-casualty clients who prefer to do business on a direct basis. The division will be led by Dominic Addesso, who was named President. Dom currently serves as President of the Direct Treaty business.
• The Broker Market division will continue to have responsibility for all Munich Re Group U.S. regional property-casualty business written through reinsurance brokers, as well as managing overall strategic relationships with brokers. The division will be led by Gregory Coda, who was named President of the division. Greg is currently Senior Vice President in Direct Treaty.
• Munich Re America’s Specialty Markets division will continue to have responsibility for all U.S. alternative market and primary property-casualty insurance business. The Specialty Markets division will build a dominant presence in U.S. niche primary insurance segments by using a repeatable model for successfully evaluating, entering and competing in each specialty insurance area. Growth may be both organic and inorganic. The division will be led by Craig Smiddy, who was named President effective immediately. Craig was previously Senior Vice President in Specialty Markets.

The National Clients, Regional Clients and Broker Market divisions will provide their clients with treaty and facultative reinsurance and capital market solutions, and will deliver the full breadth of the Munich Re Group’s capabilities and services. Global clients for the Munich Re Group will continue to be managed out of the existing Global Clients Unit in Munich, which supports clients both directly and through brokers.

Each member of the new management team will report to Anthony J. Kuczinski, who will – as previously announced – succeed John P. Phelan as Chief Executive Officer on January 1, 2008, and will report to Dr. Peter Roeder, Member of Munich Re’s Board of Management as from October 1, 2007.

"The U.S. strategy will enable Munich Re America to grow in a disciplined manner, with a focus on the bottom line and sustainable long-term contribution to earnings. We will only use growth opportunities if they fulfill our underwriting profit goals, which are the key driver of our Changing Gear initiative globally," said Tony Kuczinski. "Our long-term success will hinge on how well we deliver value-adding products and services to meet our clients’ needs. We will work in cooperation with clients and brokers to find the optimal way to service their business."

Münchener Rückversicherungs-Gesellschaft
signed Dr. Jeworrek           signed Dr. Lawrence