(corrects last sentence: share buyback starts on May 6th, not March 6th)
MUNICH (Reuters) – Munich Re exceeded its profit target last year and is confident about 2023 in view of rising prices.
Despite billions in damage from natural catastrophes, net profit rose by 17 percent to 3.42 billion euros, as the world’s largest reinsurer announced on Thursday in Munich. The board around Joachim Wenning had recently made 3.3 billion, analysts thought that was realistic. “Munich Re coped well with the crises of 2022 and continues to grow profitably,” said Wenning. He confirmed the goal of achieving a profit of 4.0 billion euros in the current year. The gross premiums written rose by almost 13 percent to 67.1 billion euros – significantly more than expected.
In the contract negotiations with primary insurers at the turn of the year, Munich Re wrote 1.3 percent more business at EUR 15.3 billion, the company said. Adjusted for changed risks, the prices were increased by an average of 2.3 percent. Above all, the prices for the assumption of major losses from natural catastrophes are rising sharply in view of climate change. However, they only account for ten percent of renewed contracts, according to a presentation. The division is “one of the most profitable” at Munich Re. Despite the devastating hurricane “Ian” in the USA, the burden of natural catastrophes fell to 2.43 (2021: 3.14) billion euros in the past year and was therefore below the budget that the reinsurer had reserved for this.
Things also went better than expected at the primary insurance subsidiary Ergo, which increased profits to 826 (2021: 605) million euros. She had recently made 800 million. In the new year, it is expected to contribute around 700 million euros to group profits.
Rising interest rates drove Munich Re’s solvency ratio to 260 percent at the end of the year (end of 2021: 227 percent). It is thus well above the target corridor of 175 to 220 percent. With another share buyback of over one billion euros, the reinsurer wants to distribute part of the excess capital to the shareholders, as announced on Wednesday. Together with the dividend, which has increased by 60 cents to EUR 11.60 per share, Munich Re is returning EUR 2.6 billion. The buyback is scheduled to begin on May 6th.
(Report by Alexander Hübner, edited by Myria Mildenberger. If you have any questions, please contact our editorial team at [email protected] (for politics and the economy) or [email protected] (for companies and markets).)
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