Munich Re has set a profit target in the range of €2.3–2.8 billion ($2.55-3.1 billion) for the current year.
The figure, announced at a meeting yesterday (March 15), comes after the reinsurer posted profits of €3.1 billion and GWP of €50.4 billion in 2015, compared with €3.2 billion and €48.8 billion in 2014 respectively, despite difficult market conditions.
Munich Re has also announced a further share buy-back programme: shares with a volume of €1 billion are to be repurchased before the Annual General Meeting (AGM) in 2017. This buy-back is also conditional on no major upheavals occurring in the capital markets or in its underwriting business. On the basis of the current share price, Munich Re would repurchase around 5.4 million shares, or approximately 3.2 percent of the share capital.
The buy-back currently in progress is to be completed by the AGM, and the acquired shares will be retired, as with the previous buy-backs. So far, around 5.2 million shares with a value of approximately €890 million have been purchased under this programme.
The proposal to the AGM will be to raise the dividend to €8.25.
Nikolaus von Bomhard, chief executive officer (CEO), Munich Re, said: "Although 2015 was not an easy year, Munich Re was able to generate a profit of €3.1 billion, thus beating the announced target for the year. Thanks to our capital strength and conservative underwriting and reserving policies, we are able to post gratifying results even in a difficult market environment."
On the outlook for 2016, von Bomhard – who, as already announced, will leave the Board of Management and also step down as CEO on 26 April 2017 – said: "We are aiming for a consolidated result of €2.3–2.8 bilion for 2016. On account of continuing low interest rates and intensive competition in reinsurance, this is an ambitious target – especially because we cannot expect to see a repeat of the below-average expenditure for natural catastrophe claims that we had in 2015."
At the same time, von Bomhard stressed that over the past year Munich Re had made considerable progress with numerous innovation initiatives. Munich Re is offering its clients customised solutions for new, changing or previously uninsured risks – such as in the areas of cyber and reputational risks, non-damage business interruption, or terrorism.
"As a Group, Munich Re wants to take advantage of these opportunities. So we have not only set up teams across the Group for these purposes, but have also established contacts throughout the world with start-ups and large and small companies that offer specific know-how,” added von Bomhard.
“Working in partnership with these companies, together we will tap digital business opportunities.”
Also at its meeting, the Supervisory Board of Munich Re decided on its motions for submission to the AGM. The Supervisory Board proposes that Clement Booth should be elected to the Supervisory Board as successor to Anton van Rossum, who is retiring from the Supervisory Board with effect from the end of the AGM.
Booth was a member of the Board of Allianz SE from 2006 to 2014. From 2003 to 2005, he was Chairman and CEO of Aon Re International in London, and from 1999 to 2003 was a member of the Board of Management of Munich Re.
Booth is being proposed for election to the Supervisory Board for the remaining period of office of van Rossum – namely until the AGM, 2019.
The Supervisory Board also decided to approve the Board of Management's dividend proposal to the Annual General Meeting.
Munich Re, Insurance, Reinsurance, Profit target, Buy-back programme, Nikolaus von Bomhard, Europe