Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (ETR:MUV2) reported full-year 2025 net earnings of €6.1 billion, up nearly 8% year over year, as management highlighted another record year that closed out its Ambition 2025 plan. Speaking on the company’s annual results and January renewals call, CEO Christoph Jurecka and CFO Andrew Buchanan said disciplined underwriting, active investment management, and a diversified earnings mix supported the result, even as Munich Re deliberately strengthened reserves and repositioned parts of its investment portfolio.
Ambition 2025 closes with record earnings and higher capital returns
Jurecka said Ambition 2025 “concluded last year” with Munich Re more than doubling net earnings over the five-year period and increasing return on equity to 18.3%. He emphasized that shareholder value creation was also reflected in dividend per share growth that outpaced earnings per share growth during the period.
January renewals: pricing pressure, disciplined underwriting, and lower volume
Management described January renewals as a “good outcome” despite abundant market capacity and increased price competition. Munich Re reported a 2.5% risk-adjusted price decline across its portfolio, which Jurecka said was within expectations, while emphasizing that terms and conditions and structures were “largely unchanged.”
Munich Re reduced renewed treaty volume by nearly 8% (cited as -7.8% in Q&A), with Jurecka noting that roughly three-quarters of the decline came from proportional business, which he said has limited impact on the bottom line. Management said it was willing to walk away from business that did not meet risk-return hurdles, and that selective growth in areas such as certain casualty markets and credit only partially offset the reductions.
Pricing pressure was strongest in Property XL and natural catastrophe business, where Munich Re cited a 6% price decline, though management said margins remain attractive at levels similar to three to four years ago. In proportional business, the company said it reduced positions that no longer met its criteria while selectively expanding in areas including casualty in Europe and Latin America.
Segment performance: GSI, Life & Health Reinsurance, and ERGO
Jurecka said Munich Re’s specialty insurance operations benefit from being “under one roof,” supporting a diversified portfolio across specialty lines. GSI delivered what he called an “excellent performance” in 2025, helped in part by below-average major losses but driven more by strong underlying performance and prudent reserving. He reiterated an expected 5% to 9% compound annual growth rate outlook for GSI and clarified in Q&A that the growth target is organic and does not assume M&A.
In Life and Health, management pointed to continued new business momentum and a contractual service margin (CSM) of above €15 billion, despite adverse currency effects, which Jurecka described as roughly a 40% increase since introduction at the end of 2022. He said Munich Re expects around a 7% annual CSM release to earnings, providing a “predictable income stream.” He also cited market evolution toward larger transactions and said large transactions since 2022 have pushed new business CSM and operating changes by more than €3 billion, with a “healthy pipeline” anticipated.
ERGO again met guidance with strong net earnings, according to management. Jurecka said the German business delivered profitable growth, and that ERGO’s P&C combined ratio was 89% as the company focused on technical improvements, including steps to improve motor profitability. He also noted that international operations are growing faster than Germany and now account for about 30% of ERGO revenue, a share he said continues to rise. Jurecka highlighted ERGO’s acquisition of NEXT Insurance as a strategic expansion into the U.S. small and medium enterprises market and said the unit is developing “exactly as expected.”
Reserving, investments, and capital position
Buchanan said the 2025 result was supported by strong underlying performance across segments, with low major losses roughly offset by significant currency losses and a lower-than-planned top line mitigated by higher investment income. He said Munich Re used stronger-than-expected performance in Q4 to strengthen the balance sheet, including deliberate fixed income disposal losses to lift running yield and further enhancing claims reserve prudence.
In P&C reinsurance, Buchanan said the company’s annual reserve review confirmed a favorable trend, but management reinforced prudence in three areas:
- New business prudence: booked at the upper end of best estimate, adding roughly 1 percentage point above the usual prudence level.
- Lower reserve releases: prior-year basic loss reserve releases were 5.0% for the full year versus the approximately 6% typically expected.
- Higher man-made losses/outlier reserves: additional caution in several long-tail casualty lines; in Q&A, management referenced scenarios such as PFAS (“forever chemicals”), sexual abuse and molestation exposures, and asbestos, and characterized the reserve strengthening as “a few hundred million euros.”
Munich Re’s P&C reinsurance headline combined ratio improved to an all-time low of 73.5% for 2025, which management attributed to very benign major losses, while the normalized combined ratio reflected the additional prudence described on the call.
On investments, Buchanan reported a full-year return on investment of 3.2%, above guidance of at least 3%, with supportive capital markets’ fair value gains offset by deliberate disposal losses. Management said reinvestment yields declined to 3.8% at year-end 2025, partly due to reinvestment into shorter maturities at lower yields, but Buchanan indicated potential upside in running yields of roughly 10 basis points per year.
Capitalization remained strong. Buchanan said the Solvency II ratio rose to 298% (described as “almost 300%”), reflecting strong operating performance and lower required capital, including FX effects. He also said the ratio already reflects the proposed dividend, while the announced buyback will be deducted in the first quarter. Under German GAAP (HGB), Munich Re reported improved results of €5.5 billion and disclosed a stock of distributable earnings of more than €10 billion, which Buchanan said supports forward-looking dividend stability.
2026 outlook and priorities under Ambition 2030
Management confirmed 2026 financial targets presented at its Capital Markets Day in December, including projected net income of €6.3 billion. Jurecka said expected earnings growth should be driven by less cyclical segments—Life & Health Reinsurance, GSI, and ERGO—while Munich Re anticipates a “muted” development in P&C reinsurance amid a more competitive environment.
Munich Re also reiterated its emphasis on capital repatriation, with Buchanan noting the company’s intention to pay out more than 80% of IFRS net earnings annually and pointing to the current year’s announced payout of 87% as evidence of flexibility when conditions allow.
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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