Current Ratings, Solvency Ratios & CDS Spreads

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Ratings and Solvency

Ratings, Solvency Ratios and CDS Spreads

Insurance Financial Strength Rating
Assessment of an insurance company's ability to meet its obligations towards policyholders. For many years Munich Re has been one of the reinsurers with excellent ratings.

Ratings of Munich Re

Rating Outlook Last rating modification Reports
A.M. Best A+ (Superior) stable 07.12.2017 Download (PDF, 625 KB)
Fitch AA (Very strong) stable 06.07.2016 Download (PDF, 343 KB)
Moody's Aa3 (Excellent) stable 17.03.2005 Download (PDF, 1.2 MB)
S&P Global Ratings AA- (Very strong) stable 22.12.2006 Download (PDF, 348 KB)

Solvency II
The solvency ratio under Solvency II is the ratio of the eligible own funds to the solvency capital requirement.

Solvency II solvency ratio

    31.12.2016 Prev. year Change
Eligible own funds1
€m 40.6672 40.687 -19
Solvency II capital requirement
€m 15.256 13.475 1.781
Solvency II ratio % 267 302  

1 The capital measures included in the eligible own funds amounted to -€2.3bn in the year under review and mainly concern the dividend payment and share buy-backs.
2 Eligible own funds excluding the application of transitional measures for technical provisions; including the application of transitional measures for technical provisions, the eligible own funds amounted to €48.2bn (Solvency II ratio: 316%).

The Solvency balance sheet prepared in accordance with Solvency II is used to determine the excess of the Group's assets over its liabilities, with both assets and liabilities largely being measured at fair value. This surplus is the key element of eligible own funds. Other components mainly comprise eligible subordinated liabilities, which need to be added to the calculation, and share buy-backs announced but not yet carried out at the reporting date, which must be deducted. Own fund items leading to restrictions in eligibility, such as surplus funds or minority interests in equity, must also be deducted. The dividend planned for the 2016 financial year is still included.

CDS Spread
A Credit Default Swap (CDS) is a tool for hedging credit risk. By buying a CDS, a market participant hedges certain risks arising from credit relationships in exchange for a premium, which is referred to as a CDS Level. The higher the level, the higher the default risk estimated by the market for the issuer.

CDS Spread

CDS Spread - Munich Re

Munich Re

Source: Bloomberg, Datastream / Status: 31.12.2017

Development of Munich Re’s five-year CDS compared to the CDS indexes iTraxx Europe and iTraxx Senior Financials with the same maturity respectively. The iTraxx Europe encompasses 125 major European companies. The iTraxx Senior Financials is composed of 25 European financials.

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