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Munich Re achieves profit of €3.8 bn in H1 2024

Munich Re achieves profit of €3.8 bn in H1 2024

Munich Re generated a net result of €1,623 mn in the second quarter of 2024 and €3,763 mn in H1 2024.

Insurance revenue from insurance contracts issued rose year on year in Q2 to €14,953mn; the H1 figure increased to €30,014 mn.

This development in Q2 was primarily due to organic growth in both reinsurance segments; the total technical result in Q2 amounted to €2,521 mn.

  • Q2 net result of €1,623 mn; annual guidance unchanged at €5 bn
  • Combined ratio in property-casualty reinsurance remains below 80% (Q2: 79.6%); total technical result of €617 mn in Q2 for life and health reinsurance demonstrates sustained strength
  • ERGO contributes €284 mn to Q2 net result; H1 result surpasses €500 mn
  • July renewals emphasise profitability and portfolio optimisation: price increase of 0.6% and volume decrease of 5.4%
Munich Re achieves profit of €3.8 bn in H1 2024

Owing mainly to currency losses against the Japanese yen and the Mexican peso, the currency result fell to –€70 mn.

The operating result was €2,211mn) and the effective tax rate came to 24.9% (24.6%).

Equity was higher at the reporting date (€30,695mn) than at the start of the year (€29,772 mn). Munich Re’s solvency ratio increased to 287%, thus remaining above the optimal range of 175–220%.

The annualised return on equity (RoE) amounted to 20.3% (15.8%) in Q2, with RoE in H1 up to 24.3% (17%).

Joachim Wenning, Chair of the Board of Management

Thanks to a profit of nearly €3.8 bn in the first half-year, Munich Re has performed well once again. What’s more, we’ve never earned more in the first six months of any year

Joachim Wenning, Chair of the Board of Management

“This result demonstrates our operational strength in reinsurance and primary insurance – both of which delivered better-than-expected profits. Encouraging July renewals plus the continued high yield on reinvestment add up to an optimistic outlook for the rest of 2024. Although our profit target for 2024 remains unchanged at €5 bn, our impressive half-year result does make it more likely that we can achieve or even outperform our full-year guidance,” Joachim Wenning said.

The reinsurance sector contributed €1,339 mn to the Group’s net result in Q2; the H1 result was €3,227mn. Insurance revenue from issued contracts rose to €9,875mn in Q2. The total technical result increased to €1,989mn, and the operating result climbed to €1,847mn.

Life and health reinsurance achieved a strong total technical result of €617mn in Q2. The release of the contractual service margin met expectations. New business growth offset the amount released. The net result in the reinsurance segment rose to €553mn. Insurance revenue from issued contracts reached €2,961mn.

Property-casualty reinsurance generated a Q2 result of €786mn; insurance revenue from issued contracts rose to €6,914mn.

The combined ratio was 79.6% in Q2 and 77.5% in H1, outperforming the full-year expectation of 82%. The normalized combined ratio was 80.5% in Q2.

Major losses over €30mn each totaled €957mn in Q2, including gains and losses from previous years’ major losses. Major-loss expenditure in Q2 was 14.4% of net insurance revenue, slightly above the expected 14%.

H1 major-loss expenditure was below the expected value, at 12.2%. Man-made major losses decreased to €110mn, while natural catastrophe losses increased to €846mn.

These figures account for discounting and risk adjustment effects. The most costly natural catastrophe for Munich Re in Q2 was the flooding in southern Germany, with reinsurance losses of €0.2bn and ERGO posting losses of €44mn.

In Q2, €332mn reserves were released for prior years’ basic losses, corresponding to 5.0% of net insurance revenue. Munich Re aims to set provisions for newly emerging claims at the top end of the estimation range, allowing for adequate risk management and potential profit from reserve releases following positive claims development.

In the reinsurance renewals as of July, the business volume decreased slightly to €3.5bn, as Munich Re selectively chose not to renew or write business that did not meet expectations regarding prices, terms, and conditions.

The primary focus of the July renewals was business in North America, South America, Australia, and with global clients.

Price development was stable overall, with different trends depending on claims experience, future loss expectations, and market conditions. Prices for reinsurance cover rose considerably in some markets, including Latin America and Australia, offsetting elevated loss expectations due to inflation or other trends.

Nataly Kramer   by Nataly Kramer