In Q1 2025, Munich Re generated a net result of €1,094m (2,115m). Insurance revenue from insurance contracts issued rose to €15,811m (15,061m). The total technical result fell to €2,054m (2,646m), which was primarily attributable to high major-loss expenditure in reinsurance. The currency result totalled –€506m (277m), due particularly to foreign exchange losses in connection with the US dollar. The operating result decreased to €1,465m (2,891m) and the effective tax rate was 22.3% (25.8%).
Equity was slightly higher at the reporting date (€33,310m) than at the start of the year (€32,901m). The solvency ratio3 was 285% (31 December 2024: 287%), which is above the optimum range (175–220%). The new share buy-back programme totalling €2.0bn has already been factored into the solvency ratio of 285%.
The annualised return on equity (RoE) for Q1 2025 was 13.3% (27.2%).
Reinsurance: Result of €853m1
Munich Re will present Global Specialty Insurance (GSI) as a separate reinsurance segment from the first quarter of 2025. Previously part of the property-casualty reinsurance segment, GSI now globally bundles those primary specialty insurance activities that are managed by the reinsurance organisation. The comparative information has been restated accordingly.
The reinsurance field of business contributed €853m (1,888m) to the net result in Q1. Insurance revenue from insurance contracts issued rose to €10,251m (9,858m). The total technical result decreased to €1,505m (2,101m) and the operating result to €1,142m (2,592m).
Life and health reinsurance generated a higher Q1 total technical result of €608m (484m), with the segment’s net result rising to €501m (487m). Insurance revenue from insurance contracts issued increased to €3,071m (3,027m).
Although Munich Re did not emerge unscathed from the devastating wildfires in Los Angeles in January 2025, we nevertheless managed to generate a quarterly profit of €1.1bn. This exemplifies the Munich Re Group’s resilience, boosted once again by the prudent management of our business portfolio. For example, the impressive contributions to the net result from life reinsurance and from ERGO partially offset the higher combined ratios for property-casualty reinsurance and Global Specialty Insurance. We’re sticking with our profit guidance of €6bn for the 2025 financial year – thanks in no small part to ongoing favourable market conditions and the high quality of our portfolio.
Christoph Jurecka
CFO
The property-casualty reinsurance segment posted a net result of €343m (1,239m); insurance revenue from insurance contracts issued rose to €4,892m (4,696m). The combined ratio was 83.9% (69.7%) of net insurance revenue and the normalised combined ratio was 78.8%.
Overall claims expenditure resulting from major losses totalled €1,008m (450m) in the property-casualty reinsurance segment. These figures include gains and losses from the run-off of major losses from previous years. Major-loss expenditure corresponded to 21.3% (10.0%) of net insurance revenue, exceeding our expectation of 17%. Man-made major losses amounted to €251m (262m), while major losses from natural catastrophes increased to €757m (189m). The major-loss figures above take account of the effects from discounting and risk adjustment. The devastating wildfires in Los Angeles resulted in this segment’s largest single claims event, totalling approximately €0.8bn (nominal).
The Global Specialty Insurance segment posted a net result of €8m (163m); insurance revenue from insurance contracts issued rose to €2,289m (2,135m). The combined ratio was 95.5% (87.6%) of net insurance revenue. Again, the LA wildfires constituted GSI’s largest single claims event (about €0.2bn).
Munich Re currently anticipates all claims attributable to the wildfires in Los Angeles to total around €1.1bn.
In the reinsurance renewals as at 1 April 2025, Munich Re managed to increase the volume of business written to €2.8bn (+6.1%). Growing market challenges notwithstanding, the environment has remained favourable. Munich Re was thus able to leverage both its close relationships with clients and its expertise to tap into attractive business opportunities arising from the expansion of existing client relationships as well as new business – particularly in India, Latin America and Europe.
It was possible to maintain the portfolio’s high quality thanks to stable contractual terms and conditions. Munich Re consistently discontinued business that did not meet expectations with regard to prices or terms and conditions.
Although prices fell overall, they mostly compensated for the higher loss estimates in some areas, which were primarily attributable to inflation and other loss trends. Primary insurance prices also increased in many markets, with Munich Re benefiting as regards proportional reinsurance contracts. Despite a 2.5% drop, the high price level of Munich Re’s portfolio changed little overall. When adjusted for portfolio diversification effects, rates dropped by 1.7%. These figures are, as always, risk-adjusted. In other words, price increases are offset if they are associated with increased risk and, consequently, elevated loss expectations.
Despite market pressure increasing, Munich Re expects the environment to remain positive in the upcoming July renewal round.
ERGO: Result of €241m2
From Q1 2025, regular reporting on ERGO will focus on the segments ERGO Germany and ERGO International.
In the ERGO field of business, Munich Re posted a net result of €241m (226m) in Q1. Insurance revenue from insurance contracts issued grew to €5,560m (5,204m), with particularly strong growth in international business.
ERGO Germany generated a result of €140m (161m); the minor decline was attributable to a lower investment result. Conversely, the segment’s insurance service result was somewhat higher year on year. Property-casualty business in Germany profited in Q1 2025 from lower costs and from major-loss expenditure that was slightly higher than the very good Q1 2024 figure but lower than anticipated. At Life and Health Germany, the release of the contractual service margin was similar year on year; the insurance service result from short-term health and travel business improved.
The ERGO International segment generated a higher net result of €100m (65m) – primarily underpinned by property-casualty business in Poland and Greece, by health business in Spain, and by higher result contributions from joint ventures in Asia. This segment’s insurance service result was good thanks to ongoing profitable growth and favourable claims development.
The total technical result for the ERGO field of business amounted to €549m (545m) and the operating result rose to €323m (299m). The combined ratio was 88.8% (87.6%) at Property-casualty Germany and 89.0% (89.5%) in the ERGO International segment.
Investments: Investment result of €1,323m
Munich Re’s investment result decreased to €1,323m (2,163m) in Q1, while regular income from investments increased to €2,090m (1,807m) – owing in part to sustained high interest rates. The balance from write-ups and write-downs was –€39m (–48m); the balance from gains and losses on the disposal of investments came to –€40m (–55m). The fair-value change was –€527m (586m).
Negative fair value changes of fixed-interest securities were the main reason behind the lower investment result compared with Q1 2024. Fixed-interest securities namely depreciated on account of higher European interest rates in Q1.
Overall, the Q1 investment result represents a return of 2.2% (3.8%) on the average market value of the portfolio. The running yield was 3.5% (3.2%) and the reinvestment yield was 4.6%. As at 31 March 2025, the equity-backing ratio including equity-linked derivatives amounted to 3.5% (2.9% as at 31 December 2024). The carrying amount of the investment portfolio as at 31 March 2025 was €227,921m (230,716m).
Outlook for 2025: Annual guidance unchanged at €6bn
Anticipating sustained advantageous business opportunities in coming quarters, Munich Re is aiming to generate a net result of €6.0bn for the 2025 financial year. The targets communicated for 2025 in Munich Re’s Group Annual Report 2024 remain unchanged.
Please note that all figures are rounded values. As usual, all forecasts and targets are subject to increased uncertainties stemming from geopolitical and macroeconomic developments, to major losses remaining within normal bounds, and to the income statement not being impacted by severe fluctuations in the currency or capital markets, significant changes in the tax environment, or other one-off effects.
Discussion about this post