Reinsurer Munich Re

Reinsurer Munich Re has announced a profit of €768 million and €1.4 billion for the second-quarter and first half of 2022, respectively, driven by a solid performance across the Group as it took advantage of growth opportunities at the mid-year renewals.

Q2 profit figure of €768 million compares with €1.1 billion in the prior year period, while the H1 2022 total declined from €1.7 billion to roughly €1.4 billion.

Group-wide gross written premiums increased by more than 8% in Q2 to €15.9 billion and by 12% in H1 2022 to €32.7 billion, driven by strong organic growth, notably in property and casualty (P&C) reinsurance.

The company’s reinsurance segment contributed €608 million to the consolidated result in the quarter and €1.12 billion in the first half of the year, compared with €951 million and €1.36 billion in 2021, respectively. Munich Re attributes the decline to the negative investment result within reinsurance.

Within its reinsurance business, P&C contributed €462 million to the result in the second quarter, down from the €858 million seen a year earlier. However, premium volume grew from roughly €7.2 billion to €8.1 billion, as the combined ratio improved from 90.1% to 89.7%.

Prices were up overall in the sectional markets, with significantly different trends dependent upon claims experience, future loss expectations and the situation in each individual market. Prices for reinsurance cover rose considerably in some markets, including the US, Latin America and Australia. These increases were sufficient overall to offset elevated loss expectations owing to inflation or other developing trends.

Major losses had more of an impact this year than last within reinsurance, with losses of over €10 million each reaching €575 million, compared with €432 million in 2021, and which includes gains and losses from the settlement of major losses from previous years. According to Munich Re, major loss expenditure corresponded to 7.5% of net earned premiums.

At the same time, man-made major losses increased to €322 million from €229 million, and includes €90 million of losses from Russia’s invasion of Ukraine. Major losses from natural catastrophes increased from €203 million to €253 million, with the costliest event for Munich Re being the drought in South America at a cost of €130 million.

In addition, the firm also released loss reserves of €308 million in Q2 2022 for basic losses from prior years.

Within its life and health (L&H) reinsurance business, profit increased from €93 million in Q2 2021 to €147 million in Q2 2022, as premium income grew to €3.3 billion. Munich Re notes that business with non-significant risk transfer continued to see “very pleasing growth.”

All in all, the L&H segment’s technical result moved from €64 million in Q2 2021 to €240 million in Q2 2022.

Losses related to the COVID-19 pandemic reached €100 million in Q2 and €259 million in H1 2022.

According to Munich Re, it exploited growth opportunities at the July 1st, 2022, reinsurance renewals, and managed to increase the volume of business written by 6% to €4.4 billion.

by Nataly Kramer