Joachim Wenning, who recently commenced his role as Chief Executive Officer (CEO) and Chairman of the Board at reinsurer Munich Re, has expressed support for the company’s primary insurance division, Ergo.
In recent times investors have expressed concern with the performance of the Ergo unit, which provides a comprehensive range of insurance products and services, with some apparently worried that the division is a drag on the profitability of Munich Re’s core reinsurance operations.
However, during the recent Munich Re annual general meeting (AGM), Wenning told shareholders that “Ergo is on a solid path,” and one of “modernisation and slimming down.”
The concerns of investors aren’t entirely without warrant, with the Ergo unit posting a loss in 2016, although this was perhaps somewhat expected as the unit underwent a deep restructuring in June, 2016, in an effort to return to profitability.
However, the German domiciled reinsurance giant is confident its primary insurance unit will generate profit of between €150 million (US$162.8mn) and €200 million (US$217.1mn) in 2017, and contribute €600 million (US$651.3mn) to the firm’s profit from the year 2021.
Munich Re announced recently that despite challenging market conditions it expects to reach its profit target for 2017, of between €2 billion (US$2.18bn) and €2.4 billion (US$2.62bn).
