Munich Re reports strong H1 2024 performance with record profit
Munich Re reports strong H1 2024 performance with record profit | Insurance Business New Zealand
Reinsurance
Munich Re reports strong H1 2024 performance with record profit
Board chair says results demonstrate company’s robust operations
Reinsurance
By
Jonalyn Cueto
Munich Re announced a robust performance for the first half of 2024, achieving a profit of €3.76 billion, a significant increase from the €2.425 billion recorded in the same period last year. According to a news release, the company’s second-quarter net result also showed strong growth, reaching €1.62 billion compared to €1.15 billion in Q2 2023.
The reinsurer’s results are mainly attributed to the organic growth in its life and health reinsurance and property-casualty reinsurance segments.
“Thanks to a profit of nearly €3.8 billion in the first half-year, Munich Re has performed well once again,” said Joachim Wenning, chair of Munich Re’s board of management. “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.”
Despite these strong results, Munich Re maintained its annual guidance of €5 billion. Wenning noted that while the half-year performance makes achieving or surpassing this target more likely, the company remains cautious due to potential uncertainties.
Financial highlights
In the second quarter of 2024, Munich Re saw its insurance revenue from contracts increase to €14.95 billion from €14.175 billion a year earlier. The total technical result for Q2 was €2.5 billion, up from €2.159 billion in the previous year. However, currency losses against the Japanese yen and Mexican peso impacted the currency result, which fell to -€70 million from €44 million.
The operating result improved to €2.21 billion from €1.57 billion, and the annualized return on equity (RoE) increased to 20.3% from 15.8% in Q2 2023. The company’s solvency ratio also rose to 287%, surpassing its optimal range of 175-220%.
Munich Re’s reinsurance business contributed €1.339 billion to the Group’s net result in Q2, an increase from €904 million a year ago. The total technical result for reinsurance in Q2 was €1.989 billion, up from €1.56 billion, while the operating result climbed to €1.847 billion from €1.22 billion.
The life and health reinsurance segment performed strongly, generating a total technical result of €617 million in Q2, compared to €325 million in the previous year. The property-casualty reinsurance segment also reported a solid Q2 result of €786 million, up from €578 million, with a combined ratio of 79.6%, maintaining a performance below the full-year expectation of 82%.
ERGO, Munich Re’s primary insurance subsidiary, contributed €284 million to the Q2 net result, increasing from €250 million a year prior. For the first half of 2024, ERGO’s result surpassed €500 million, driven by strong performance in both international and German markets.
Investment results
Munich Re’s investment result surged to €1.47 billion in Q2, up from €596 million in the same period last year. The higher result was attributed to increased regular income and favorable interest rates.
Outlook
Looking ahead, Munich Re is optimistic about the second half of 2024, supported by favorable market conditions and high reinvestment yields. Despite uncertainties related to geopolitical and macroeconomic factors, the company is confident in its strong first-half performance, suggesting a good chance of meeting or exceeding its annual profit target of €5 billion.
All figures reported are rounded, and future projections are subject to various uncertainties including currency and capital market fluctuations, major loss experiences, and other unforeseen factors.
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