Munich Re has announced a strong performance for the first half of 2024, achieving a profit of EUR 3.76 billion, a significant increase from EUR 2.425 billion in the same period last year. According to a press release, the company’s net result in the second quarter also showed strong growth, reaching EUR 1.62 billion compared to EUR 1.15 billion in the second quarter of 2023.

The reinsurance company’s results are mainly due to organic growth in the life and health reinsurance and property and casualty reinsurance segments.

“With a profit of around EUR 3.8 billion in the first half of the year, Munich Re has once again performed well. Moreover, we have never achieved higher profits in the first six months of a year. This result demonstrates our operating strength in reinsurance and primary insurance – both of which achieved better-than-expected profits,” said Joachim Wenning, Chairman of the Board of Management of Munich Re.

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Despite these strong results, Munich Re maintained its annual forecast of €5 billion. Wenning noted that while the performance in the first half of the year makes it more likely that this target will be met or exceeded, the company remains cautious due to potential uncertainty.

Financial highlights

In the second quarter of 2024, Munich Re saw its insurance contract revenues increase to €14.95 billion from €14.175 billion a year earlier. The overall technical result for the second quarter was €2.5 billion, up from €2.159 billion a year earlier. However, currency losses against the Japanese yen and the 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 annual return on equity rose to 20.3% from 15.8% in Q2 2023. The company’s solvency ratio rose to 287%, exceeding its optimal range of 175-220%.

Munich Re’s reinsurance business contributed €1.339 billion to the group’s net result in the second quarter, up from €904 million a year earlier. The overall reinsurance technical result in the second quarter was €1.989 billion, up from €1.56 billion, while the operating result rose to €1.847 billion from €1.22 billion.

Life & Health Reinsurance performed strongly, achieving a total technical result of €617 million in the second quarter, compared to €325 million a year earlier. Property & Casualty Reinsurance also posted a strong second quarter result of €786 million, up from €578 million, with a total share of 79.6%, remaining below the full-year forecast of 82%.

ERGO, the main subsidiary of Munich Re, contributed €284 million to the net results in the second quarter, up from €250 million a year earlier. In the first half of 2024, ERGO’s results exceeded €500 million, driven by strong performance in both the international and German markets.

Investment results

Munich Re’s investment results rose to €1.47 billion in the second quarter, compared with €596 million in the same period last year. The higher result was due to increased regular income and favourable interest rates.

Expectations

Looking ahead, Munich Re is optimistic about the second half of 2024, supported by favorable market conditions and high reinvestment yields. Despite the uncertainties associated with geopolitical and macroeconomic factors, the company is confident of its strong performance in the first half, indicating a good chance of achieving or exceeding the annual profit target of EUR 5 billion.

All figures are approximate, and future projections are subject to a number of uncertainties including currency and capital market fluctuations, major loss experiences, and other unforeseen factors.

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