Strong growth at Munich Re as price rises offset loss expectations
Munich Re has reported a profit of €3.76bn in H1 2024, a 55% increase over HI 2023, while insurance revenue from insurance contracts issued rose to €30.01bn from €28.45bn. The combined ratio in P&C reinsurance remained below 80% from 79.6%.
Joachim Wenning, chair of the board of management, said: “Thanks to a profit of nearly €3.8bn in the first half-year, Munich Re has performed well once again. What’s more, we’ve never earned more in the first six months of any year. This result demonstrates our operational strength in reinsurance and primary insurance – both of which delivered better-than-expected profits. Encouraging July renewals plus the continued high yield on reinvestment add up to an optimistic outlook for the rest of 2024. Although our profit target for 2024 remains unchanged at €5.0bn, our impressive half-year result does make it more likely that we can achieve or even outperform our full-year guidance.”
Reinsurance contributed €3.28bn to the half-year result, comapred to €1.96bn for H1 2023. Insurance revenue from insurance contracts issued rose to €19.73bn. P&C reinsurance generated an H1 result of €2.12bn, compared to €1.39bn for H1 2023. Insurance revenue from insurance contracts issued rose to €13.76bn.
Major-loss expenditure in H1 was below the expected value at 12.2%, said the reinsurer. Man-made major losses decreased to €110m from €155m, while major losses from natural catastrophes increased to €846m from €445m. The costliest natural catastrophe for Munich Re in Q2 was the flooding in southern Germany, with nominal losses in reinsurance of €200m and ERGO posting losses of €44m.
ERGO contributed €535m to the net result of the group, a 14% increase on the same period in 2023. Insurance revenue from insurance contracts issued in H1 rose to €10.28bn from €9.92bn.
The result at ERGO International increased to €146m from €116m in Q2. “This very positive trend was underpinned by a good total technical result in international property-casualty business – particularly in Poland, Greece and the Baltic states,” said Munich Re.
The company said that price development was stable overall, though prices for reinsurance cover rose considerably in some markets, including Latin America and Australia. These price increases were sufficient overall to offset elevated loss expectations owing to inflation or other developing trends, said Munich Re.
It said that overall, prices across the Munich Re portfolio increased slightly by 0.6% in the July renewals. For the next round of renewals in January, Munich Re said it expects that the market environment “will remain favourable and offer attractive business opportunities”.
