Global reinsurance giant Munich Re has posted a profit of EUR3,419m ($3,622m) in the 2022 financial year, exceeding its profit guidance of EUR3.3bn. The figure is 16.6% higher than the EUR2,932m chalked up in 2021.
Gross premiums written rose by 12.7% to EUR67,133m year on year, Munich Re states in its financial reports for 2022. This was also higher than in 2021 when GPW stood at EUR59,567m.
The Board of Management and Supervisory Board have recommended paying shareholders a dividend of EUR11.60 per share for the 2022 financial year, constituting an increase of 5.5%. As of 31 December 2022, after making the customary deduction for the proposed dividend, the solvency ratio was approximately 260% (31 December 2021: 227%) and was thus also at a high level.
Reinsurance
The reinsurance business contributed EUR2,593m (2021: EUR2,328m) to the consolidated result in the 2022 financial year. Reinsurance was thus well able to absorb the expenditure for Hurricane Ian in Q3 and the lower investment result, and – with further increased profitability of the business – slightly surpassed its adjusted profit guidance of EUR2.5bn. Gross premiums written increased significantly, to EUR48,075m (2021: EUR41,354m) as a result of Munich Re's growth strategy in an improved market environment and due to positive currency translation effects.
Life and health reinsurance business generated a profit of EUR737m in 2022 (2021: EUR325m) whereas property-casualty reinsurance contributed EUR1,856m (2021: EUR2,003m).
Mr. Joachim Wenning, Munich Re chair, said, “Munich Re absorbed the crises of 2022 well and continues to grow profitably. We are robust, both financially and in terms of capital. Our broadly diversified business portfolio not only makes us more resilient but also opens up new earnings prospects. In times of great uncertainty due to war and volatile capital markets, our clients value reliability. "
2023
In 2023, Munich Re intends to generate a consolidated profit of EUR4.0bn. Insurance revenue is expected to reach around EUR58bn in 2023. In the reinsurance field of business, Munich Re anticipates insurance revenue of about EUR39bn and a profit of around EUR3.3bn in 2023.
In the reinsurance renewals as at 1 January 2023, Munich Re was able to increase written business volume to EUR15.3bn (+1.3%). Munich Re reduced the share of proportional business and, owing to the attractive price level, grew in the area of nonproportional natural catastrophe covers in particular. Due to improved contractual terms and conditions, the quality of the portfolio improved further.
There has been active optimization of the portfolio and the realization of growth opportunities from business development across almost all regions, Munich Re says. The main driver was the expansion of existing business and the acquisition of new business with selected clients, particularly in Europe, Asia and Australia.
Prices developed positively overall and more than compensated for the significantly higher loss estimates in some areas, which were caused primarily by inflation or other loss trends. To varying degrees, price increases were evident around the world. All in all, prices for the Munich Re portfolio increased by 2.3%, risk-adjusted. In other words, price increases are offset if they are associated with increased risk and, consequently, elevated loss expectations.
Despite increasing market pressure, Munich Re expects the market environment to remain positive and to present attractive growth opportunities in the upcoming April and July renewal rounds.
Source: asiainsurancereview.com
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