Munich Re Continues the Strong Underwriting Poor Investments Story; We Think Shares Are Undervalued

Munich Re reported strong first-half 2022 results, continuing with the strong underwriting and poor investments reinsurance story. While top-line growth has been buoyed by currency, even accounting for this there is double-digit organic growth within Munich’s largest business—reinsurance of property and casualty. The performance of investments has been the headwind because while Munich’s regular income has risen to EUR 3.258 billion, the write downs on investments in this half amounted to EUR 2.030 billion. Versus the gains that the business generates usually, this means Munich is looking at an investment result for the full year that is lower by close to EUR 3.2 billion, the majority from fixed-income and equities.