Reinsurer - Munich Re pays record dividend after high profit

The world's largest reinsurer, Munich Re, is breaking one record after another despite natural disasters and a weak global economy: last year, the DAX-listed company increased its profits by 23 percent to almost 5.7 billion euros, as CEO Joachim Wenning and CFO Christoph Jurecka reported when presenting the annual financial statements. Insurance sales reached 60.8 billion euros.

Thanks to the good figures , Munich Re shares rose significantly. The group's market value is around 73 billion euros. Munich Re employs around 44,000 people worldwide.

The company thus significantly exceeded its original profit target of five billion euros and was already very close to the six billion hoped for this year. Accordingly, the Munich Re Board of Management wants to delight shareholders with a substantial dividend increase: the payout is to be increased by a third from 15 to 20 euros per share, the highest dividend ever paid.

Wenning does not want to increase the profit target for this year: "You can't expect things to repeat themselves so positively every year." The CEO and CFO both stressed that the company would remain cautious. According to current estimates, the devastating forest fires in and around Los Angeles alone will cost Munich Re around 1.2 billion euros, which will be posted in the first quarter.

Reinsurers primarily insure other insurers such as Allianz or Axa. The financial sector as a whole has so far been spared from the weak global economy, which is affecting industry and many service providers worldwide. This is due, among other things, to the rise in interest rates and the upturn in the capital markets.

At Munich Re, an additional factor is the long-term trend of increasing losses from natural disasters: although these costs a lot of money, they also increase the demand for insurance cover. Reinsurers in general have therefore been able to increase their prices significantly in recent years.

However, this phase could now be coming to an end: When renewing contracts in the property and casualty business with primary insurers such as Allianz and Generali at the turn of the year, Munich Re had to accept price declines of an average of 0.6 percent.