Munich Re profits exceed target for third year in a row

Renewals marked by attractive business opportunities

Munich Re profits exceed target for third year in a row


By Kenneth Araullo

Reinsurance giant Munich Re has reported its results for the fiscal year 2023, in line with the new IFRS 9 and IFRS 17 standards starting January 2023.

The company achieved a profit of €4.597 billion, surpassing its revised October target of €4.5 billion, which itself was an increase from the initial forecast of €4.0 billion. The fourth quarter contributed €1.004 billion to the annual profit.

Insurance revenue, on the other hand, saw a rise to €57,884 million, which the firm attributed to organic growth within the property-casualty reinsurance segment and at ERGO, despite facing headwinds from currency translation effects.

The return on equity (RoE) for Munich Re in 2023 was 15.7%, with earnings per share reaching €33.88. In line with this, the board of management has proposed a dividend of €15 per share, marking a 29.3% increase from the previous year. The solvency ratio, after accounting for the proposed dividend, stood at approximately 267% as of December 31, 2023.

Munich Re 2023 results across segments

Munich Re’s total technical result for the year increased to €7,545 million, with the investment result rising significantly to €5,374 million. However, due to currency losses against the Japanese yen and the US dollar, the currency result dropped to –€292 million.

The operating result saw a decrease to €5,702 million, while the effective tax rate improved to 16.9% due to positive one-time effects. Equity at the end of the year was higher at €29,772 million.

In the reinsurance sector, Munich Re reported a net result of €3,876 million, with insurance revenue climbing to €37,786 million. The life and health reinsurance segment achieved a technical result of €1,433 million, aligning with the adjusted target of €1.4 billion. The net result in this segment increased to €1,428 million. However, insurance revenue saw a slight decrease due to currency effects.

The property-casualty reinsurance segment reported a net result of €2,448 million with insurance revenue rising to €27,061 million. The combined ratio for this segment was 85.2%, with a normalized combined ratio of 86.5%.

Major-loss expenditure for the year was €3,278 million, below the expected value, with the largest individual loss attributed to the earthquake in Turkey, valued at approximately €0.7 billion.

For 2024 reinsurance renewals, Munich Re increased its business volume to €15.7 billion, which the firm attributed to its leverage of expertise and client relationships to tap into attractive business opportunities.

Looking ahead to 2024, Munich Re aims for a net result of €5 billion, with projected insurance revenue totaling €59 billion and an anticipated improvement in the return on investment. The reinsurance segment, meanwhile, has a projected net result of €4.2 billion and an improved combined ratio for property-casualty reinsurance.

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