Global reinsurer Munich Re has today announced a rise in insurance revenue from contracts issued to €15.1 billion for the first quarter of 2024, driven by organic growth in its reinsurance business and also at ERGO International.
Last month, Munich Re pre-announced a net profit of €2.1 billion for Q1 2024 and a reinsurance combined ratio of 75.3% in property and casualty (P&C), and a total technical result in life and health (L&H) of €586 million.
Today, the reinsurer has released its full results for the opening quarter of the year, which alongside the rise in insurance revenue, includes a total technical result of €2.8 billion, up from €1.8 billion in Q1 2023, and an operating result of almost €3 billion compared with €1.8 billion last year.
In Q1 2024, the reinsurance segment contributed €1.888 billion to the net result, which is an improvement on Q1 2023’s €1.051 billion. Insurance revenue from insurance contracts issued rose from €9.232 billion to €9.858 billion. At the same time, the total technical result increased by 77% to €2.2 billion, and the operating result increased by 77% to €2.592 billion.
Within reinsurance, the P&C arm produced a net result of €1.336 billion in Q1 2024 compared with €760 million in Q1 2023, as insurance revenue from insurance contracts issued rose slightly to €6.831 billion. The P&C reinsurance combined ratio improved from 86.5% to 75.3%, and the normalised combined ratio was 79.5%.
During the quarter, major losses in excess of €30 million each totalled €650 million for Munich Re, which is lower than last year’s €1.035 billion, and includes gains and losses from the run-off of major losses from previous years. Major loss expenditure corresponded to 9.9% of net insurance revenue, which is below the average of 14%. Man-made major losses increased to €418 million from €165 million, with the largest individual loss being the collapse of the Francis Scott Key Bridge in Baltimore. Major losses from natural catastrophes fell to €232 million from €870 million.
Turning to life and health reinsurance, and the segment produced a higher technical result of €586 million compared with €320 million in Q1 2023. The contribution to the net result from the release of the contractual service margin was in line with expectations, says Munich Re. The segment’s net result increased to €552 million from €291 million, and insurance revenue from insurance contracts issued rose to €3.027 billion from €2.734 billion.
Munich Re has also commented on its experience at the April 1st, 2024, reinsurance renewals, revealing that it was able to grow the volume of business written by 6.1% to €2.6 billion.
“The company selectively exploited the ongoing favourable market conditions to expand attractive business, with growth opportunities being realised particularly in India, Latin America and Europe. These involved both strengthening existing client relationships and establishing new ones,” says the firm.
Overall, price development was stable at 1.4, with primary insurance prices also increased in many markets, with Munich Re benefiting as regards proportional reinsurance contracts. Overall, the high price level of Munich Re’s portfolio was practically unchanged, with a decrease of just –0.7%. However, when adjusted for portfolio diversification effects, rates rose by 0.6%, says the firm.
Although market pressure is increasing, Munich Re says that it expects the environment to remain positive in the upcoming July renewal round.
Turning to ERGO, the firm’s primary insurance business, and Munich Re highlights a very good net result of €252 million, up on last year’s €219 million. Insurance revenue from insurance contracts issued increased to
€5.204 billion from €5.041 billion, driven by the International segment in particular.
As well as a better underwriting result, Munich Re has today reported that its Q1 2024 investment result increased to €2.163 billion from €1.612 billion, as regular income from investments increased to €1.807 billion from €1.601 billion. Overall, the investment result for Q1 represents a return of 3.8% on the average market value of the portfolio, so above the firm’s forecast of above 2.8% for the full year.
Looking ahead, the reinsurer is anticipating sustained advantageous business opportunities, and aiming to generate a net result of €5 billion for the 2024 financial year.
Munich Re kicked off the new financial year with great momentum. Our Q1 net result this year is nearly 70% higher than in 2023. Every line of business played a role in this impressive performance. In addition, we got a boost from the treaty renewals at 1 April, where we tapped into attractive growth opportunities against a backdrop of continuing high rates. We still expect to generate a profit of €5bn in 2024. In fact, it has become more likely that we will surpass that target,” said Christoph Jurecka, Chief Financial Officer (CFO).
