Munich Re pegs LA wildfire loss at €1.2bn as it delivers record 2024

Munich Re has reported a €1bn spike in its net result to total €5.67bn in 2024, outpacing its profit target for the fourth consecutive year and beating initial guidance by €700m, despite a rise in claims for major losses and a dip in Q4. The group’s commercial insurer ERGO booked a 10% rise in its net result contribution to €791m for 2024 to just meet its profit target of €0.8bn, after gains across its portfolio. ERGO’s international business reported a 5% increase in its net result to €301m despite high nat cat losses from flooding in Poland and Austria in September, while its German P&C business booked a net result of €260m, up 3%. The group also disclosed it expects to book a loss of about €1.2bn from the wildfires in Los Angeles at the start of 2025 against its property and casualty and global specialty insurance lines, although it said the estimate is subject to a high degree of uncertainty because of the complexity of the losses. Munich Re’s net profit for Q4 dipped by 2.5% to €979m after a 4% fall in the contribution from its reinsurance net result to €887m from €926m, while ERGO recorded an 18% rise in net result to €92m for the quarter. At full-year, Munich Re’s reinsurance operations booked a profit of €4.88bn, up 26%, surpassing its target of €4.2bn, after a 31% rise in the P&C net result to total €3.2bn. The combined ratio improved to 82.4% across the year from 85.2%. Joachim Wenning, chair of the board of management at Munich Re, said: “Munich Re’s profit growth has been truly substantial and sustained in the context of our five-year Ambition 2025 strategy programme, which we’ll conclude at the end of the year.” He added that the group is seeking further profit growth this year to hit €6bn following 1 January renewals. “We tapped into attractive business opportunities – including the expansion of existing client relationships and new business. It was possible to maintain the high quality of our portfolio thanks to stable or improved contractual terms and conditions,” the group said, citing stable price development in the 1 Jan renewals, reporting a slight decrease of risk-adjusted rates at -0.6% across its portfolio. “Despite market pressure increasing slightly in the most recent renewal round, Munich Re expects the environment to remain positive in the upcoming April and July renewal rounds – with the attractive price levels and improved terms and conditions largely being upheld,” the group said, adding that “recent claims attributable to natural disasters are clearly impeding a softening of prices”. Munich Re’s operating result closed the year 40% higher at €7.97bn, including a 5% increase from ERGO to break the €1bn mark, while the group’s investment result also rose sharply by 34% to €7.19bn. But the group was hit by a 19% rise in its major loss bill to €3.89bn in 2024 after increases in claims for both man-made losses (up 32% to €1.24bn) and nat cat claims, which closed the year 13% higher at €2.64bn. Hurricane Helene was the single largest nat cat to hit Munich Re in 2024, costing it €0.5bn in claims, followed by a €0.4bn loss from Hurricane Milton in Q4. Munich’s Re’s major losses accounted for 14.3% of net insurance revenue in 2024, slightly higher than the budgeted 14%. Munich Re confirmed 2025 targets first disclosed in December last year, anticipating net profit of €0.9bn from ERGO and €5.1bn from its reinsurance operation, which will report global specialty insurance as a separate line from this year.

Munich Re pegs LA wildfire loss at €1.2bn as it delivers record 2024

ERGO increase its contribution to the group net result by 10% to €791m

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