Munich Re generated a profit of €2.4bn in H1 of 2023, higher than half of its full year guidance of €4bn, as the firm remains “on track” to achieve its annual target.
The firm explained that the higher result during H1 of 2022 was attributable to lower unwinding-of-discount effects and lower major loss expenditure.
Insurance revenue from insurance contracts issued rose year on year to €14.175bn, up from €13.772bn in Q2. For H1, this figure increased to €28.448bn (27.033bn in the same period last year).
Meanwhile, the total technical result in Q2 amounted to €2.159bn, and the investment result rose to €596m from €317m last year.
Munich Re generated a profit of €1.154bn for Q2 of 2023, down somewhat from €1.585bn in the same quarter last year.
In Q2 2023, annualised return on equity (RoE) amounted to 15.5% (24.2% last year). The RoE for the first half of the year was 16.9% (24.3% last year) – with both figures at the upper end of the RoE target range of 14 to 16% specified in the Ambition 2025 strategy programme.
According to Munich Re, the reinsurance field of business contributed €904m (€1.439bn last year) to the Group’s net result in Q2. For H1, the total reinsurance result was €1.955bn (€2.763bn last year).
The firm attributed the decrease in Q2 in part to intentionally incurred losses from the disposal of fixed-interest securities in P&C reinsurance.
Insurance revenue from insurance contracts issued rose to €9.3bn (€9.019bn last year) in Q2. The total technical result was €1.56bn (€2,014bn last year) and the operating result totalled €1.222bn (€2,007bn last year).
Elsewhere, life and health reinsurance generated a “very strong” total technical result of €325m (€302m last year) in Q2.
Munich Re said the contribution to the net result from release of the contractual service margin was in line with expectations, while strong growth in new business more than offset the amount released.
The net result for life and health reinsurance was €326m (€561m last year). Insurance revenue from insurance contracts issued came to €2.606bn (€2.666bn last year).
P&C reinsurance generated a net result of €578m (€878m last year) in Q2, while insurance revenue from insurance contracts issued here rose to €6.695bn (6.353bn last year).
Due to higher year-on-year expenditure for major losses, the combined ratio amounted to 80.5% (72.3% last year) of net insurance revenue for Q2 and 83.5% (74.5% last year) for H1.
Munich Re’s major-loss expenditure increased year on year to €600m (€464m last year) in Q2. These figures include gains and losses from the run-off of major losses from previous years, the firm said.
Major-loss expenditure corresponded to 9.3% (7.6%) of net insurance revenue and was thus below the long-term average expected value of 14%, both for Q2 and H1 (12.8%).
Although man-made major losses fell to €155m (€308m last year), this was more than offset by major-loss expenditure from natural catastrophes increasing to €445m (€156m), Munich Re explained.
The costliest natural catastrophe for the firm in Q2 was flooding in Italy, with losses amounting to some €200m (nominal value).
Munich Re also generated a “very good” result of €250m (€147m last year) in its ERGO field of business in Q2 and €470m (303m) in H1.
ERGO grew “considerably”, with insurance revenue from insurance contracts issued climbing to €4.875bn (€4.752bn last year) in Q2; in H1, it rose to €9.916bn (9.357bn).
Joachim Wenning, Chair of the Board of Management, commented, “Munich Re posted a profit of €2.4bn during the first six months of 2023 – considerably greater than half of our full-year forecast.
“All areas of our operation are contributing to our success. Munich Re continues to grow profitably because our clients value our strength, consistency and expertise.
“And we’ll keep on resolutely tapping into the encouraging market environment. In addition, we’re systematically making progress on decarbonisation in investments and insurance business and on fostering women leaders.
“Halfway through our Ambition 2025 strategy programme, it’s clear that Munich Re is fully on track to meet its targets.”
