Munich Re Earnings: Half Year a Little Wobbly but Still Good

We believe Munich Re delivered a reasonable set of results. In delivering net income of EUR 2.425 billion, or EUR 17.75 in earnings per share for the first six months, the company is tracking slightly ahead of consensus for EUR 31.85 in full-year EPS, as collected by Refinitiv. Munich Re’s earnings today imply a EUR 35.50 full-year EPS number, slightly better than the EUR 33.31 we forecast. Based on these results versus what Munich Re has historically delivered, we believe the company is capable of delivering full-year net income of around EUR 4.74 billion, slightly ahead of our EUR 4.54 billion forecast. That "capable" estimate implies EUR 34.81 in EPS, ahead of both us and consensus. First-half results were mainly affected by lower reinsurance and higher primary insurance results. Underwriting in the core property and casualty reinsurance division has deteriorated since last year, primarily as a result of higher natural catastrophe and human-made losses in the second quarter.