Munich Re’s growth strategy in emerging markets Re growth strategy Monika... · Monika Nothhelfer. Abu Dhabi 13 October 2008. Munich Re International Health Munich Re’s growth

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Monika NothhelferAbu Dhabi 13 October 2008

Munich Re International Health

Munich Re’s growth strategy in emerging markets

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1

Global health market volumeEUR billion

Source: OECD, WHO, Team

Development Total Health Expenditures vs. GDPIndex (1995 = 100); 20 largest health markets

100

150

200

250

1995 96 97 98 99 2000 01 02 03 04 05

THE

GDP

MR Group has identified the global health markets as a major growth driver

Demographic development Medical progress Life style changes Economic development

3,150

4,150

5,400

2,300

2000 2005 2010e 2015e

CAGR ~ 6.0%

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2

International Health has been established as a third business field of MR Group

Primary insurance

Munich Re Group

International HealthReinsurance

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3

Our approach is to leverage International Health´s combined health experience in primary and reinsurance

Flexible combination of business models and products as unique selling proposition

Outstanding knowledge and experience in health insurance and reinsurance gained in two decades of global presence

Strong market presence in insurance and/ or reinsurance as solid platform for further growth

Combining the world's No 1 health reinsurer and Europe's No 1 health insurer (DKV)

Health as core business segment within Munich Re Group

Health risk expertise in over 40 countries

More than 2.300 healthcare professionals in 25 locations around the globe

The only specialised health risk carrier with global scope

Our setup Our strengths

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4

MR Group is a true global player

Johannesburg

Dubai

Singapore

Hong Kong

Caracas

PrincetonMilan

Athens

London

Sydney

Beijing Tokyo

Jeddah

AmmanBahrain

Seoul

Toronto

Companies, branches or offices for health

Brussels

Barcelona

Oslo Stockholm

Cologne

MR Group activities in health

BellinghamLuxemburg

Abu Dhabi

Munich

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5

“One size does not fit all”

OPERATIONS

REGULATIONS ECONOMICS

MARKETS

• Large variety of local health systems • Different density and complexity of local

private health market regulation• Basically high political exposure of health

business• Legal market entry and shareholding

barriers

• Variety of health business models to be provided

• Efficiency and cost containment requirements

• Dedicated distribution channels and methods as critical success factor

• Broad range of international skills and capabilities

• Differences in individual disposal income according to local economic situation

• Heterogeneous aging demographics• Differing range of incentives for individuals

and groups to purchase private health cover• Common public cost containment efforts

with direct and indirect impact on private health sector

• Different customer demand (tailor-made vs. standardized benefits)

• Different levels of customer education and awareness for value of private health cover

• Different market stages and life cycles (mature vs. emerging markets)

• Different functions of private health cover (Duplicate – complementary – supplementary)

Challengesfor international

health player

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6

Costcontainment

Access

Quality

Funding

Administration

Product design

Operations Customer access

Healthcare

supply

Private healthinsurance

Publichealthsystem

Medicalmanagement

Emerging markets

Major challenges Munich Re solutions

• Flexible public-private and private-private cooperation models

• Complete IT solutions and operational infrastructure

• Comprehensive and flexible TPA solutions

• Reinsurance capacity• Sophisticated underwriting,

product design and claims management solutions

• Data acquisition and management tools and know-how

• Comprehensive operational private health insurance knowledge

• Global provider network

Munich Re International Health provides comprehensive solutions for emerging markets

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7

Acquisition of specialized health insurance companies, e.g. USA

Take-over of health portfolios of multi-line insurance companies, e.g. Belgium

Belgium

Establishment of specialized health insurer together with government, e.g. Abu Dhabi

Introduction of innovative reinsurance solutions: Consultative Reinsurance (CRI), e.g. Taiwan

Provision of TPA / MSO services to primary insurance clients, e.g. UAE, Jordan

Establishment of specialized private health insurer together with local hospital group, e.g. India

MR is stringently implementing its global health strategy – in mature and emerging markets

Built-up of regional public health delivery system, e.g. Denia/Spain

Salute

Flexible adjustment of business model set-up according to market needs, e.g. Italy

Establishment of private health insurer together with local insurance company, e.g. China

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8

Conclusion

Engaging in international health markets means dealing with multiple challenges

A “one-size-fits-all” approach cannot meet individual market specifics

Only a holistic and flexible business approach can provide the right solutions

Munich Re Group´s dedicated international health organization and expertise provide holistic solutions