Munich Re to pay out ‘significantly increased’ dividend to shareholders

Munich Re will pay a significantly increased dividend of €8.25 ($9.37) per share for the financial year 2015, up €0.50 on the previous year's dividend of €7.75. Munich Re's total payout to its shareholders will now be more than €1.3 billion.

The relevant proposal was approved by shareholders the firm’s annual general meeting (AGM).

In addition, Munich Re is returning unneeded surplus capital to its shareholders via share buy-back programmes. Since the last AGM, it has repurchased shares with a value of €1 billion; this is equivalent to almost 5.8 million shares or around 3.47 percent of its share capital.

In a new share buy-back programme, shares with a volume of up to €1 billion are to be repurchased again before the AGM on 26 April 2017. This buy-back is conditional on no major upheavals occurring in the capital markets or in its underwriting business.

If the dividends and share buy-backs are taken together, in the past ten years Munich Re has directly or indirectly paid out around €20 billion to its shareholders.

Nikolaus von Bomhard, chief executive officer (CEO) of Munich Re, said: "Last year, Munich Re achieved a profit of €3.1 billion – despite the difficult environment. This is the fourth year in succession that we have generated a profit of over €3 billion. That is a good result."

"We are therefore raising the dividend by 50 cents to €8.25. But the sustainability of our dividend is even more important to us than the amount. We are confident that we will be able to maintain this rate of €8.25 per share in future, provided that developments remain within normal bounds."

Commenting on the profit target for 2016, von Bomhard, who will leave the board of management and relinquish his appointment as CEO on 26 April 2017, said: "For the current year, we projected a profit in the range of €2.3–2.8 billion. This target figure does not take into account major expenditure for implementing ERGO's programme for the future, which will be communicated in the second quarter.

In a first, very early, assessment of the first three months of the current year, von Bomhard said: "From January to March, the incidence of major losses was once again low, but initial estimates now show that the result for the first quarter will remain well below our expectations and the result for the first quarter of 2015. Capital markets were highly volatile in the first quarter – share prices in particular fell, and we will be posting write-downs."

With regard to Munich Re's business perspectives, he said Munich Re is persisting in its endeavours to open up new markets and develop new products.

“Innovation has always been a key component of our corporate culture,” he added. “Those who fail to innovate will end up a mere footnote in history. We do not fear these changes. On the contrary: I see digitalisation – and the whole issue of innovation – as a tremendous opportunity.”

Also at the AGM, the supervisory board elected Clement Booth 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 elected to the board for the remaining period of office of van Rossum – namely until the 2019 AGM.