Munich Re reports full-year trading figures

It highlights profit guidance in the billions for 2023

Munich Re reports full-year trading figures

Insurance News

By Mia Wallace

German reinsurance giant Munich Re has issued its trading results for the 2022 financial year, reporting a profit of €3.6 billion, up significantly from 2021’s €2.9 billion and surpassing its profit guidance of €3.3 billion.

Among the key results posted by the reinsurer, it revealed a GWP jump of 12.7% to €67.1 billion, up from €59.56 billion in 2021. Its operating result for the 2022 business year amounted to €3.58 billion, roughly on par with 2021’s €3.51 billion, while the other non-operating results amounted to -€81 million, compared to -€91 million in 2021.

Reinsurance results

The reinsurance arm of the business contributed €2.59 billion to the consolidated result in the 2022 financial year and €1.39 billion in Q4, compared to €2.32 billion and €734 billion respectively in 2021. In a Press release, Munich Re noted that its reinsurance business “slightly surpassed” its adjusted profit guidance of €2.5 billion.

Meanwhile, the operating result of the business amounted to €2.57 billion, up from €2.69 billion in 2021 while GWP increased sharply to €48.07 billion from €41.35 billion in 2021 – which Munich Re accredited to its “growth strategy, an improved market environment and due to positive currency translation effects”.

Munich Re’s life and health reinsurance business generated a profit of €737 million for the 2022 financial year, up from €325 million last year while premium income rose to €13.67 billion, compared to 2021’s €12.56 billion.

Property-casualty reinsurance contributed €1.86 billion to the 2022 result, down from €2.003 billion in 2021. Premium volume grew robustly to €34.4 billion from €28.79 billion in 2021. And despite high natural catastrophe losses in the market, the combined ratio decreased to 96.2% (99.6%) of net earned premiums.

Major losses of over €10 million each totalled €4.17 billion for the full year, and €615 million for Q4, both down from last year. Meanwhile, in the reinsurance renewals as of January 1, 2023, Munich Re was able to increase written business volume to €15.3bn (+1.3%).

ERGO results

In its ERGO field of business, Munich Re generated a profit of €8.26 billion in 2022 - up from €605 million in 2021 - of which €124 million was in Q4, surpassing its profit guidance of €800 million. ERGO grew successfully in all three segments in 2022.  Overall premium income across all segments rose substantially to €20.06 billion, an increase from 2021’s €19.17 billion while GWP increased to €19.06 billion, up from €18.21 billion.

Outlook for 2023

Commenting on the group’s results for the financial year 2022, Joachim Wenning, chair of the board of management noted that Munich Re, “absorbed the crises of 2022 well and continues to grow profitably”.

“We are robust, both financially and in terms of capital,” he said. “Our broadly diversified business portfolio not only makes us more resilient, but also opens up new earnings prospects. In times of great uncertainty due to war and volatile capital markets, our clients value reliability. Our shareholders will benefit from both an increased dividend and a new round of share buy-backs.”

Looking to the year ahead, Munich Re noted that it is on course to achieve its Ambition 2025 and aiming for a profit of €4 billion in 2023. The group’s insurance revenue, which will supersede “premium income” in future, is expected to hit about €58 billion in 2023.

In the reinsurance field of business, Munich Re anticipates insurance revenue of about €39 billion and a profit of around €3.3 billion in 2023. The ERGO field of business is expected to contribute approximately €0.7 billion to the consolidated result. However, it highlighted that all forecasts and targets face considerable uncertainty due to ongoing fragile macroeconomic developments and volatile capital markets.

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