11th May 2022

Munich Re generates a profit of E608m (589m) in Q1

The operating result totalled E780m( E98m), while the other non-operating result amounted to –E14m(–E12m). The currency result totalled E17m(–E23m), and the effective tax rate was 17.6%(16.3%). Supported by strong organic growth across all segments, especially in property-casualty reinsurance, gross premiums written increased substantially by 15.7% year on year to E16,833(E14,551m).
The solvency ratio was approx. 231%(227% as at 31st December 2021), which is above the optimum range(175–220%), and includes the deduction of E1bn share buy-back.
The reinsurance field of business contributed E511m(E410m) to the consolidated result in Q1. The operating result rose to E654m(E558m) and gross premiums written increased to E11,307m(E9,389m).
Life and health reinsurance business generated a loss of E78m(+E52m) in Q1, mainly due to COVID-19-related losses of E150m, above all from the Omicron wave in the US. Premium income rose to E3,369m(E3,058m).
Property-casualty reinsurance contributed E589m(E358m) to the result in Q1. Premium volume increased substantially to E7,938m(E6,330m), with a continued strong focus on quality. The combined ratio was 91.3 98.9) of net earned premium. In Q1, Munich Re posted expenditure related to the war in Ukraine of slightly over E100m in some specialty lines.
In the reinsurance renewals as at 1st April 2022, Munich Re was able to increase the volume of business written to E2.7bn(+7.6%). It was possible to tap into growth opportunities, especially in Asia– particularly in Japan and India–as well as in Latin America. By contrast, Munich Re once again selectively discontinued business that no longer met risk/return expectations.
Prices were up overall in the sectional markets, with significantly different trends dependent upon claims experience, future loss expectations and the situation in each individual market. Prices for reinsurance cover rose considerably in some markets, including the US.
All in all, prices for the Munich Re portfolio continued to be at a high level (–0.1%). This figure is, as always, risk-adjusted. In other words, price increases are offset if they are associated with increased risk and, consequently, elevated loss expectations. Particularly in light of higher inflation, Munich Re was deliberately cautious in calculating future loss expectations.
Munich Re anticipates that the market environment will remain stable in the next renewal round in July, offering attractive growth opportunities.
Despite adverse effects from volatile capital markets and major losses, ERGO posted a profit of E96m(E178m) for Munich Re in Q1 thanks to ongoing very pleasing operating performance across all segments. ERGO again saw substantial growth in Q1. Overall premium income rose to E5,803m (E5,362m) supported by all segments, while gross premiums written increased to E5,526m(E5,163m). The Property-casualty Germany segment saw particularly strong premium growth.

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