Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München Q1 Earnings Call Highlights

Key Points

• Munich Re posted a Q1 2026 net result of EUR 1.7 billion, with CFO Andrew Buchanan calling it a strong start to the year. The company said it remains on track to meet its full-year net profit target of EUR 6.3 billion.
• The reinsurer’s capital position remained strong, with IFRS equity rising to EUR 34.6 billion and a Solvency II ratio of 292%, even after accounting for the new share buyback program. However, the quarter’s investment result was pressured by market volatility, leaving returns below full-year guidance.
• Reinsurance and ERGO both contributed solidly, helped by low major losses and strong underwriting performance, especially in P&C reinsurance where the combined ratio was 66.8%. Munich Re also kept its outlook unchanged despite noting that meeting its EUR 40 billion reinsurance revenue target is becoming more challenging.

Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München ETR: MUV2 reported a net result of EUR 1.7 billion for the first quarter of 2026, with Chief Financial Officer Andrew Buchanan saying the reinsurer made “a strong start to the year” despite geopolitical and market uncertainty.

Speaking on the company’s media conference call, Buchanan said the result was supported by strong underlying operating performance across all business segments and benign major loss experience. Those positives were partly offset by weaker investment and currency results. He added that the direct underwriting impact from the conflict in the Middle East remained “very manageable,” while capital market volatility weighed on the investment portfolio.

Munich Re said it remains on track to achieve its full-year 2026 net result target of EUR 6.3 billion. Buchanan noted that the first-quarter result was above the company’s proportional earnings expectation for the year, with return on equity reaching 19.7% for the quarter.

Capital Position Remains Strong

Buchanan said Munich Re’s IFRS equity increased by more than EUR 1 billion during the quarter to EUR 34.6 billion. Net earnings more than offset outflows related to the final tranche of the prior share buyback program, which was completed before the annual general meeting.

The company’s Solvency II ratio declined to 292% from 298% at year-end. Buchanan said the decline reflected the deduction of the full EUR 2.25 billion amount for the new 2026/27 share buyback program, even though repurchases are expected to occur in stages through the annual general meeting next year. Solid economic earnings during the quarter partially offset that downward effect.

Investment Result Hit by Market Volatility

Munich Re reported an investment result of just under EUR 1.7 billion for the first quarter, corresponding to a return on investment of 2.9%. Buchanan said that represented a significant improvement from the first quarter of 2025, but remained below the company’s 2026 guidance of at least 3.5%.

He said rising oil and gas prices renewed inflation concerns and triggered volatility across bond and equity markets. Munich Re recorded negative fair value changes in its fixed-income and listed equity portfolios, which were largely offset by positive revaluations in alternative investments and commodities.

The group had EUR 238 billion in investments at quarter-end. Buchanan said Munich Re slightly increased its equity allocation, net of derivatives, to 3.3% and also modestly expanded alternative investments. The reinvestment yield rose to 4.2% in the quarter, which he said should support investment income in coming quarters.

Regular investment income was 3.5%, below the 3.7% level recorded in the fourth quarter of 2025. Buchanan attributed the decline partly to quarterly volatility in private equity distributions and the accounting treatment of inflation-linked bonds, adding that the company expects a catch-up effect in the second quarter once recent consumer price inflation developments are reflected.

ERGO Delivers Solid First-Quarter Contribution

Munich Re’s ERGO segment delivered a net result of EUR 235 million in the first quarter, which Buchanan described as a promising start toward the segment’s 2026 net profit target of EUR 900 million. ERGO Germany contributed EUR 157 million, while ERGO International contributed EUR 78 million.

For ERGO Germany, Buchanan said the total technical result rose to EUR 425 million, supported mainly by higher earnings in short-term businesses such as travel insurance and short-term health insurance. The long-term life business remained stable and within expectations, with a contractual service margin release of EUR 210 million. The property and casualty business recorded a combined ratio of 86.7%, helped by a low major loss burden.

ERGO International’s net result was driven by good operating performance but partly offset by a lower contribution from joint ventures compared with an exceptionally strong prior-year quarter. Buchanan said technical profitability in life and health was below expectations, mainly due to a one-off effect from a portfolio sale in the Belgian life business. In property and casualty, the combined ratio was 89.5%, broadly in line with full-year guidance, despite weather-related claims in Poland and the Baltics following severe winter conditions.

Reinsurance Supported by Low Major Losses

Life and Health Reinsurance delivered a total technical result of EUR 500 million, slightly above the pro rata annual target. Buchanan characterized the quarter as “relatively quiet” and “very solid.” He said the prior-year comparison was elevated by positive U.S. claims experience that was not considered representative of the normal underlying level. The contractual service margin in Life and Health Reinsurance increased by around EUR 500 million, driven by business growth and positive currency effects.

In Property and Casualty Reinsurance, insurance revenue fell 19.8% from the prior-year quarter to EUR 3.9 billion. Buchanan said the decline reflected foreign currency effects, particularly after most major currencies depreciated against the euro in 2025, as well as deliberate organic reductions in business that did not meet Munich Re’s return requirements.

The P&C Reinsurance combined ratio was 66.8%, significantly below the company’s full-year guidance of 80%, supported by a major loss ratio of only 3.5%. Normalized for the low major loss experience, the combined ratio was 80.3%. Buchanan said that was within expectations but acknowledged upward pressure from the January and April renewals and a higher expected major loss level, which the company increased by 1 percentage point to 18%.

In the April P&C reinsurance renewals, Munich Re reduced renewed treaty volume by 18.5% to maintain portfolio quality while largely preserving terms and conditions. Buchanan emphasized that the April renewal book represented about 11% of the total P&C portfolio. Risk-adjusted pricing declined 3.1%, driven notably by natural catastrophe business, though Buchanan said margins on retained business remained healthy overall.

Outlook Unchanged Despite Revenue Challenges

Munich Re left its 2026 outlook unchanged, continuing to expect a group net result of EUR 6.3 billion. Buchanan said achieving the company’s reinsurance revenue guidance of EUR 40 billion has become “more challenging” than initially expected, but remains within reach.

He cited negative premium adjustments in the first quarter that the company does not expect to recur, along with attractive business opportunities over the remainder of the year. Buchanan said large deal activity was relatively quiet in the first quarter but is expected to accelerate, particularly in Life and Health, with additional potential in P&C.

“Overall, we can look back on a successful Q1 and are confident in the outlook for the rest of the year,” Buchanan said.

About Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München ETR: MUV2

Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München engages in the insurance and reinsurance businesses worldwide. It also offers life and health reinsurance solutions, such as digital underwriting and advanced analytics solutions, health insurance management system, financial market risks, financing, portfolio risk management, digitalized investment-linked solution, MIRA digital suite, MIRA POS, MIRApply insured and physician, claims risk adjustment, CLARA plus, data analytics, underwriting and claims, medical research, capital management, and health market.

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