Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München Q3 Earnings Call Highlights

Key Points

• Munich Re raised its 2026 net-profit target to €6.6 billion from €6.3 billion after posting a €1.7 billion third-quarter result, supported by lower-than-expected major losses. Nine-month profit reached €5.7 billion, and return on equity was 21.9%.
• Reinsurance drove performance, contributing €1.5 billion to third-quarter profit; the company now expects full-year reinsurance profit of €5.7 billion. Lower major losses also led it to forecast combined ratios below 80% for P&C reinsurance and 90% for Global Specialty Insurance.
• The revised target is not guaranteed: Munich Re flagged volatile markets and potential large fourth-quarter losses, while abundant industry capital may pressure prices at January renewals. Higher interest rates lifted its reinvestment yield to 4.7%, though they also contributed to investment disposal losses and negative fair-value effects.

Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München ETR: MUV2 raised its 2026 profit target after reporting a third-quarter net result of €1.7 billion, as lower-than-expected major losses supported its reinsurance operations.

Chief Financial Officer Andrew Buchanan said Munich Re now expects a full-year net result of €6.6 billion, up from its previous target of €6.3 billion. The company earned €5.7 billion in the first nine months of 2026, approximately €500 million more than in the same period a year earlier.

The third-quarter result was below the €2 billion reported in the prior-year quarter, which Buchanan described as exceptional. Return on equity for the first nine months rose to 21.9% from 20.8%, above the company’s long-term ambition of more than 18%.

Reinsurance drives higher outlook

Munich Re’s reinsurance business contributed €1.5 billion to the group’s third-quarter result and €4.8 billion over the first nine months. The company increased its full-year net result outlook for the business to €5.7 billion.

Property and casualty reinsurance and Global Specialty Insurance benefited from lower-than-expected major losses. Munich Re now expects full-year combined ratios below 80% for P&C reinsurance and below 90% for Global Specialty Insurance. The combined ratio measures claims and expenses against premiums; a figure below 100% generally indicates underwriting profitability.

P&C reinsurance posted a third-quarter combined ratio of 80.0% and a nine-month ratio of 72.2%. Its nine-month insurance revenue declined 9% to €12.4 billion, or 7% after adjusting for currency effects. Buchanan attributed the decline to currency movements and deliberate reductions in business that no longer met the company’s requirements.

Global Specialty Insurance recorded a combined ratio of 83.9% for the quarter and 85.5% for the first nine months. Its nine-month insurance revenue was €6.4 billion, slightly below the prior-year period, although it rose 2.3% on a currency-adjusted basis.

Life and health reinsurance generated a third-quarter technical result of €493 million, helped by favorable mortality experience. That was partly offset by assumption updates following adverse experience in specific disability portfolios. Its nine-month technical result reached €1.5 billion, and Buchanan said the business was on track for its €1.9 billion full-year target.

Capital markets and loss risks remain

Buchanan said he was comfortable with the revised group profit target but cautioned that it was not guaranteed. He cited volatile capital markets and the possibility of unusually large losses in the fourth quarter. He also said expert opinion suggested that El Niño could shift some risk away from North Atlantic hurricanes toward Asia-Pacific and other regions.

Munich Re released reserves equal to 2% of prior-year basic losses in P&C reinsurance during the third quarter, compared with its usual 6%. Buchanan said the company slowed the releases as a precaution ahead of its annual reserve review, rather than because of a specific problem.

“The signs are overall pretty positive. I’m not concerned about where our reserve review will land,” Buchanan said. He added that the company would examine potential vulnerabilities, including U.S. casualty business.

Renewal pressure and investment yields

With January reinsurance renewals approaching, Buchanan said abundant industry capital and relatively low major losses in the third quarter would continue to put downward pressure on prices. He said it was too early to predict the size of any price change, but described P&C reinsurance pricing as generally still technically adequate.

Asked about an Aon and Blackstone reinsurance facility, Buchanan said he had no inside knowledge of how it would operate or its take-up. He said there was no indication at this stage that Munich Re would lose shares or need to cut prices specifically because of such vehicles.

Munich Re’s investment result was €1.9 billion in the third quarter, with a 3.2% return on investment. Rising interest rates contributed to disposal losses and negative fair-value effects, particularly in fixed income, but also lifted the reinvestment yield by 40 basis points to 4.7%. Buchanan said higher yields were gradually supporting regular investment income.

At the ERGO insurance business, the third-quarter contribution to group profit was €263 million, bringing the nine-month total to €819 million. Buchanan said ERGO was on track for its approximately €900 million full-year net result target.

The group’s Solvency II ratio stood at 301% at the end of September, while IFRS equity was €33.4 billion. Munich Re plans to disclose its 2027 financial outlook on December 10 and present its 2026 full-year results on February 25, 2027.

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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