Munich Re kicks off 2024 with strong Q1 results

CFO expects to surpass targets for the year

Munich Re kicks off 2024 with strong Q1 results


By Kenneth Araullo

Munich Re has reported a strong start to 2024, with its Q1 net result climbing to €2,140 million, up from €1,271 million in the previous year.

The performance was attributed to lower than average major-loss expenditures, robust investment returns, and solid operational results across all business divisions.

The company’s insurance revenue from contracts issued increased to €15,061 million, up from €14,273 million, driven largely by organic growth in the reinsurance segment and at ERGO International. The total technical result also saw a rise, reaching €2,785 million compared to €1,809 million in the prior period, while the currency result improved significantly to €176 million, a reversal from a €145 million loss, primarily due to gains against the US dollar.

The operating result surged to €2,928 million from €1,768 million, with the effective tax rate slightly decreasing to 25.9% from 26.4%.

Equity as of March 31, 2024, stood at €31,226 million, an increase from €29,772 million at the beginning of the year. The solvency ratio also rose to 273%, staying well above the ideal range of 175-220%. Additionally, a share buy-back program worth €1.5 billion has been planned.

The annualized return on equity (RoE) for Q1 2024 was reported at 27.3%, up from 17.6% in the previous year.

Munich Re Q1 reinsurance results

In the reinsurance sector, the net result contributed €1,888 million to overall performance, marking a significant year-on-year increase. Revenues from issued insurance contracts in the sector rose to €9,858 million from €9,232 million. The total technical result improved to €2,203 million from €1,248 million, and the operating result increased to €2,592 million from €1,467 million.

The life and health reinsurance segment also showed positive trends, with the Q1 total technical result rising to €586 million from €320 million. The segment’s net result grew to €552 million from €291 million; revenues from issued insurance contracts increased to €3,027 million from €2,734 million.

Property-casualty reinsurance saw a Q1 net result of €1,336 million, up from €760 million, with issued insurance revenue climbing to €6,831 million from €6,498 million. The combined ratio improved significantly to 75.3% of net insurance revenue, with a normalized ratio of 79.5%.

Major losses exceeding €30 million totaled €650 million, down from €1,035 million, including gains and losses from the runoff of previous years’ major losses. This expenditure represents 9.9% of net insurance revenue, well below the expected average of 14%.

Man-made major losses rose to €418 million, with the largest being the collapse of the Francis Scott Key Bridge in Baltimore. Losses from natural catastrophes decreased to €232 million from €870 million.

During the April 1 reinsurance renewals, Munich Re increased its business volume to €2.6 billion, a 6.1% rise. The company took advantage of favorable market conditions to expand its business, particularly in India, Latin America, and Europe, by enhancing existing client relationships and establishing new ones.

“Munich Re kicked off the new financial year with great momentum,” CFO Christoph Jurecka said. “Our Q1 net result this year is nearly 70% higher than in 2023. Every line of business played a role in this impressive performance. In addition, we got a boost from the treaty renewals at 1 April, where we tapped into attractive growth opportunities against a backdrop of continuing high rates. We still expect to generate a profit of €5bn in 2024. In fact, it has become more likely that we will surpass that target.”

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