Company Reports

Over second-quarter 2026, Munich Re etched out a convincing beat. The key takeaway from these results is the continuation of low natural catastrophe losses and light large losses more broadly. This is hitting volume and pricing, but we think lighter claims continue to push earnings to a peak.

Munich Re is the largest reinsurance company in the world, yet that size has had its drawbacks. We think the company has some moaty business lines that seem almost unrivaled, yet the impact those lines have on the overall business has not been enough to push it into moaty territory. Munich Re has a strategy to drive growth in its global specialty insurance and possibly cyber. In the context of the property and casualty reinsurance division, insurance revenue in global specialty has been growing faster than the traditional reinsurance lines, though it is expected to decline modestly in 2026. Munich Re’s expansion of an inspection-based model combined with insurance does yield superior underwriting quality. And we believe its traditional area of expertise in providing these inspection-based services utilizing historical records and specialized industrial engineers is probably the way the business has been able to develop sound underwriting earnings. In developing that model into the Internet of Things, there are likely underwriting benefits. We think Munich Re is one of the few reinsurers to be developing specialist insurance and reinsurance with this combination. However, when we think more broadly about the competitive dynamics of that approach versus an engineer-based model, we think the new IoT model has lower barriers to entry. While Munich Re may be able to gain insights from these peripheral technologies and may have a first-mover advantage, we see some risk that another reinsurer could replicate this. We think a stronger focus on research and development and proprietary technology could be a better way to develop a competitive advantage.

Munich Re is the largest reinsurance company in the world, yet that size has had its drawbacks. We think the company has some moaty business lines, that seem almost unrivaled, yet the impact those lines have on the overall business has not been enough to push it into moaty territory. Munich has a strategy to drive growth in its global specialty insurance and possibly cyberlines. In the context of the property and casualty reinsurance division, insurance revenue in global specialty has been growing faster than the traditional reinsurance lines in recent years. Munich Re’s expansion of an inspection-based model combined with insurance does yield superior underwriting results, in our opinion. And we believe its traditional area of expertise in providing these inspection-based services utilizing historical records and specialized industrial engineers is probably the most moaty way the business has been able to develop good underwriting earnings. In developing that model into the Internet of Things, there are likely underwriting benefits obtainable. We think Munich Re is one of the few reinsurers to be developing specialist insurance and reinsurance with this combination. However, when we think more broadly about the competitive dynamics of that approach versus an engineer-based model, we think the new IoT model has lower barriers to entry and is more replicable. While Munich Re may be able to gain insights from these peripheral technologies and may have a first-mover advantage in rollout and integration, we see some risk another reinsurer could replicate this. We think a stronger focus on research and development and proprietary technology could be a better way to develop a competitive advantage.

For the first quarter of 2026, Munich continues the value-over-volume theme. Overall, the results are a beat in some areas and a miss in others, but look good broadly against its targets and our estimates for the full year.

Munich Re is the largest reinsurance company in the world, yet that size has had its drawbacks. We think the company has some moaty business lines that seem almost unrivaled, yet the impact those lines have on the overall business has not been enough to push it into moaty territory. Munich Re has a strategy to drive growth in its global specialty insurance and, possibly, its cyber lines. In the property-casualty reinsurance division, insurance revenue in global specialty is growing faster than in traditional reinsurance lines. Munich Re’s expansion of an inspection-based model combined with insurance does yield superior underwriting results, in our opinion. And we believe its traditional area of expertise in providing these inspection-based services utilizing historical records and specialized industrial engineers is probably the most moaty way the business has been able to develop good underwriting earnings. In developing that model into the Internet of Things, there are likely underwriting benefits obtainable. We think Munich Re is one of the few reinsurers to be developing specialist insurance and reinsurance with this combination. However, when we think more broadly about the competitive dynamics of that approach versus an engineer-based model, we think the new IoT model has lower barriers to entry and is more replicable. While Munich Re may be able to gain insights from these peripheral technologies and may have a first-mover advantage in rollout and integration, we see a risk that another reinsurer could not replicate this. We think a stronger focus on research and development and proprietary technology could be a better way to develop a competitive advantage.

For 2025, Munich Re has reported net income of EUR 6.121 billion. That is slightly below company-complied consensus and below what we were forecasting. The company has provided earnings guidance of EUR 6.3 billion for 2026, indicating that earnings growth is slowing.

Munich Re has reported net income of EUR 1.997 billion for the third quarter, which is unusually strong. This can predominantly be attributed to a low level of major losses within the main property and casualty reinsurance results.

In taking a closer look at European reinsurers, we think that while the industry could be faced with higher volume as a result of climate change, buoyant returns from a harder market have attracted capital. That has led to the cycle turning, and that is more important in the medium term.

Munich Re is the largest reinsurance company in the world, yet that size has had its drawbacks. We think the company has some moaty business lines, that seem almost unrivaled, yet the impact those lines have on the overall business has not been enough to push it into moaty territory. Munich Re has a strategy to drive growth in its global specialty insurance and possibly cyberlines. In the context of the property and casualty reinsurance division, insurance revenue in global specialty is growing faster than the underlying traditional reinsurance lines. Munich Re’s expansion of an inspection-based model combined with insurance does yield superior underwriting results, in our opinion. And we believe its traditional area of expertise in providing these inspection-based services utilizing historical records and specialized industrial engineers is probably the most moaty way the business has been able to develop good underwriting earnings. In developing that model into the Internet of Things, there are likely underwriting benefits to be had. We think Munich Re is one of the few reinsurers to be developing specialist insurance and reinsurance with this combination. However, when we think more broadly about the competitive dynamics of that approach versus an engineer-based model we think the new IoT model has lower barriers to entry and is more replicable. While Munich Re may be able to gain insights from these peripheral technologies and may have a first-mover advantage in rollout and integration, we see risk another reinsurer could not replicate this. We think a stronger focus on research and development and proprietary technology could be a better way to develop a competitive advantage.

While looking at dividends for 2025, when we published our European Insurance Dividends report on June 30, we picked out Admiral, Munich Re, and Scor. We also highlighted Ageas as holding potential to outperform.

For the second quarter of 2025, Munich Re has delivered much better-than-expected results. This has predominantly been driven by lower major loss expenditure and a better investment result.

In our look into European dividends for companies and stocks we prefer for 2025 earnings, we like Admiral, Munich, and Scor, but we prefer Scor over Munich based on its price/fair value ratio. We also think there is potential in Ageas.

Munich Re is the largest reinsurance company in the world, yet that size has had its drawbacks. We think the company has some moaty business lines, that seem almost unrivaled, yet the impact those lines have on the overall business has not been enough to push it into moaty territory. Munich Re has a strategy to drive growth in its global specialty insurance and possibly cyberlines. In the context of the property and casualty reinsurance division, insurance revenue in global specialty is growing faster than the underlying traditional reinsurance lines. Munich Re’s expansion of an inspection-based model combined with insurance does yield superior underwriting results, in our opinion. And we believe its traditional area of expertise in providing these inspection-based services utilizing historical records and specialized industrial engineers is probably the most moaty way the business has been able to develop good underwriting earnings. In developing that model into the Internet of Things, there are likely underwriting benefits to be had. We think Munich Re is one of the few reinsurers to be developing specialist insurance and reinsurance with this combination. However, when we think more broadly about the competitive dynamics of that approach versus an engineer-based model we think the new IoT model has lower barriers to entry and is more replicable. While Munich Re may be able to gain insights from these peripheral technologies and may have a first-mover advantage in rollout and integration, we see risk another reinsurer could not replicate this. We think a stronger focus on research and development and proprietary technology could be a better way to develop a competitive advantage.

While Munich Re's life and health reinsurance division and its primary insurance business, Ergo, have both posted decent results for the first three months, with weak property and casualty reinsurance numbers Munich's financial results overall look light.

Munich Re is the largest reinsurance company in the world, yet that size has had its drawbacks. We think the company has some moaty business lines, that seem almost unrivaled, yet the impact those lines have on the overall business has not been enough to push it into moaty territory. Munich Re has a strategy to drive growth in its global specialty insurance and possibly cyberlines. In the context of the property and casualty reinsurance division, insurance revenue in global specialty is growing faster than the underlying traditional reinsurance lines. Munich Re’s expansion of an inspection-based model combined with insurance does yield superior underwriting results, in our opinion. And we believe its traditional area of expertise in providing these inspection-based services utilizing historical records and specialized industrial engineers is probably the most moaty way the business has been able to develop good underwriting earnings. In developing that model into the Internet of Things, there are likely underwriting benefits to be had. We think Munich Re is one of the few reinsurers to be developing specialist insurance and reinsurance with this combination. However, when we think more broadly about the competitive dynamics of that approach versus an engineer-based model we think the new IoT model has lower barriers to entry and is more replicable. While Munich Re may be able to gain insights from these peripheral technologies and may have a first-mover advantage in rollout and integration, we see risk another reinsurer could not replicate this. We think a stronger focus on research and development and proprietary technology could be a better way to develop a competitive advantage.

We have rolled our model for Munich Re to incorporate the latest figures for 2024 and in doing so, we have revised our forecasts.

Munich Re posted 2024 results that were broadly in line with company-compiled consensus. The results were ahead of our full-year forecast, but we believe these strong numbers are because of a hard market that is softening.

We are raising our fair value estimate for Munich Re to EUR 381 per share, though shares remain overvalued. We maintain our rating of no economic moat. Munich has had a very good year, but we see the end of a hardening reinsurance market in sight as reinsurance price rises have started to fall. Falling inflation and falling interest rates will also negatively affect Munich’s balance sheet but less so than under IFRS 4.

Munich Re is the largest reinsurance company in the world, but that size has its drawbacks. We think the company has some moaty business lines that seem almost unrivaled, yet the impact those lines have on the overall business is not enough to push it into moaty territory. Munich has a strategy to drive growth in its global specialty insurance and cyber lines. In the context of the property and casualty reinsurance division, gross premiums written in these two lines are growing faster than the underlying traditional reinsurance. Munich’s expansion of an inspection-based model combined with insurance does yield superior underwriting results, in our opinion. And we believe its traditional area of expertise in providing these inspection-based services utilizing historical records and specialized industrial engineers is probably the most moaty way the business has been able to develop good underwriting earnings. In developing that model into the Internet of Things, there are likely underwriting benefits to be had. We think Munich is one of the few reinsurers to be developing specialist insurance and reinsurance with this combination. However, when we think more broadly about the competitive dynamics of that approach versus an engineer-based model, we think the new IoT model holds lower barriers to entry and is more replicable. While Munich may be able to gain insights from these peripheral technologies and may have a first-mover advantage in rollout and integration, we see little reason another reinsurer could not replicate this. We think a purer focus on research and development of proprietary technology would be a more durable way to develop an underwriting-based competitive advantage.

Munich Re has missed company-compiled consensus expectations for the third quarter of the year, reporting a EUR 930 million net result versus consensus of EUR 1,419 million. The primary reason for the miss is because of EUR 1,609 million of major loss expenditure in the property and casualty reinsurance division. Munich Re’s property and casualty reinsurance annual major loss expenditure budget is 14% of net insurance revenue. However, this quarter that major loss expenditure has hit 23.1%, supporting a long-term trend of rising claims. The 90.5% combined ratio is much higher than consensus expectations of 82.5%. While the major loss of EUR 1,609 million is much higher than the prior year's third-quarter major loss expenditure of EUR 770 million. This should be put in the context of EUR 1.974 billion and EUR 2.316 billion reported in the third quarter of 2021 and 2022. They buck a longer-term trend of rising catastrophe losses due to rising temperatures and climate change.