Munich Re bullish on €4bn target, ‘tapping into encouraging market’
Global reinsurance giant Munich Re is bullish on achieving its target net result of €4 billion for 2023, having generated “considerably greater” half year profit than expected. CEO Joachim Wenning highlighted that the results were driven by solid performance in both the ERGO and reinsurance fields of business, supported by an overall “encouraging market environment”.
Munich Re generated a profit of €1.154 billion in the second quarter of 2023, and €2,42 billion in the first six months of the year.
The reinsurance field of business contributed €904 million to the group’s net result in Q2. For H1, the total reinsurance result was €1.95 billion.
Insurance revenue from insurance contracts issued rose to €9.3 billion in Q2. The total technical result was €1.56 billion and the operating result totalled €1.22 billion.
The net result for life and health reinsurance totalled €326 million. Insurance revenue from insurance contracts issued came to €2.61 billion.
Property/casualty reinsurance generated a net result of €578 million in Q2, compared with €878 million in the prior year period. Insurance revenue from insurance contracts issued rose to €6.7 billion. On account of higher year-on-year expenditure for major losses, the combined ratio amounted to 80.5% of net insurance revenue for Q2, and 83.5% for H1.
Munich Re’s major-loss expenditure increased year on year to €600 million in Q2. These figures include gains and losses from the run-off of major losses from previous years. Major-loss expenditure corresponded to 9.3% of net insurance revenue, and was thus below the long-term average expected value of 14%, both for Q2 and for the half-year, the firm noted.
Although man-made major losses fell to €155 million from €308 million in the prior period, but was “more than offset” by major-loss expenditure from natural catastrophes increasing to €445 million from €156 million last year.
The costliest natural catastrophe for Munich Re in Q2 was flooding in Italy, with losses amounting to some €200 million (nominal value).
Munich Re ERGO generated a result of €250 million in Q2 and €470 million in H1, both higher than last year. ERGO’s insurance revenue from insurance contracts issued climbed to €4.87 billion in Q2 and €9.92 billion in H1.
Munich Re’s investment result increased to €596 million in Q2, with regular income from investments climbing to €1.76 billion.
Munich Re said it is “confident” in its outlook for further positive business opportunities in the second half, and is still aiming for a net result of €4 billion for the 2023 financial year.
“The probability of surpassing this target has increased given the strong half-year result,” management stated.
The company’s CEO and chair of the board Wenning said: “Munich Re posted a profit of €2.4bn during the first six months of 2023 – considerably greater than half of our full-year forecast. All areas of our operation are contributing to our success.
“Munich Re continues to grow profitably because our clients value our strength, consistency and expertise. And we’ll keep on resolutely tapping into the encouraging market environment.
“In addition, we’re systematically making progress on decarbonisation in investments and insurance business and on fostering women leaders. Halfway through our Ambition 2025 strategy programme, it’s clear that Munich Re is fully on track to meet its targets.
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