Munich Re soars in Frankfurt, aims for 6 billion profit in 2025

(Il Sole 24 Ore Radiocor) - Reinsurers in the limelight on European stock exchanges, thanks to guidance for next year. Munich Re soared in Frankfurt after announcing that it aimed for a profit of €6 billion in 2025, higher than analysts' estimates, and Swiss Re shone in Zurich on the back of $4.4 billion in expected profits next year. As a communiqué states, "thanks to the strong operating performance of all its business segments, Munich Re is targeting an Ifrs net profit of EUR 6 billion in 2025. The group's insurance revenues should reach a total of EUR 64 billion and the Return on Investment should improve to over 3 per cent'. Munich expects reinsurance revenues to rise to EUR 42bn next year with a profit of EUR 5.1bn.

"In the current favourable market environment, Munich Re will continue to leverage its strong market position. The Combined Ratio is expected to remain at an attractive level of profitability" at 79 per cent in non-life reinsurance and 90 per cent in global specialty insurance (Gsi), which from 2025 will be treated for accounting purposes as a separate segment. In Life and Health reinsurance, the group expects a total underwriting result of 1.7 billion in 2025. The insurance subsidiary Ergo is expected to post revenues of EUR 22bn in 2025, contributing EUR 0.9bn to profits, with a combined ratio of 89% in Germany and 90% in international business. In 2023, the Munich Re Group posted a profit of EUR 4.6bn on revenues of EUR 57.9bn. In the first nine months of 2024, profits have already reached 4.7 billion. The group has around 43,000 employees globally.

Swiss Re, the world's second-largest reinsurer, meanwhile, topped the Smi index. Swiss Re expects a net profit of "over $4.4 billion" by 2025, dividend growth of 7% or more over the next three years, and to maintain a RoE Ifrs target of over 14% over the years. In non-life reinsurance, the Swiss group aims for a combined ratio of less than 85%, and for life and health the target is a net profit of USD 1.6bn. The focus on cost discipline and efficiency should lead to a cutting of operating expenses by about USD 300 million by 2027. "Looking ahead to 2025, we expect pricing in non-life reinsurance to remain strong, with increasing demand for protection driven by the high risk environment," commented CEO Andreas Berger.