Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (ETR:MUV2) said it is on track to meet its 2026 earnings targets after reporting a first-half net result of €3.9 billion, representing more than 60% of its full-year guidance. The group reported a 23% return on equity for the period, above its Ambition 2030 target of more than 18%.
Chief Executive Officer Christoph Jurecka said the first-half performance benefited from low major-loss claims and strong equity markets, while also reflecting solid underlying results across the company’s businesses. Second-quarter net profit totaled €2.2 billion, according to Chief Financial Officer Andrew Buchanan.
Reinsurance discipline amid softer pricing
Jurecka said the group is navigating a softer property and casualty reinsurance market by emphasizing risk-adjusted returns rather than premium growth. P&C reinsurance accounted for about half of first-half earnings, but growth in Global Specialty Insurance, life reinsurance and ERGO is helping diversify earnings, he said.
At the July renewals, Munich Re’s reinsurance volume declined about 9%, driven largely by a 5.5% price decrease and a further reduction in U.S. casualty business. The reported pricing change included about one percentage point of negative business-mix effects due to a larger proportional-business share.
The company withdrew from business with inadequate returns, particularly in excess-of-loss coverage, while adding selected proportional and non-proportional business. Jurecka said pricing softening did not accelerate compared with the April renewals, and market discipline in structures and policy wordings was largely maintained.
“We can afford to walk away from business where pricing does not meet our profitability requirements,” Jurecka said, citing Munich Re’s capitalization, global footprint and client relationships. He added that the group continues to identify opportunities in markets including Latin America and the U.S.
P&C reinsurance posted a 68.9% combined ratio in the second quarter and a 67.9% ratio for the first half, supported by very low major losses. Reserve releases contributed six percentage points to the second-quarter ratio. The normalized combined ratio rose to about 82% in the quarter, reflecting the earn-in of recent renewals, changes in business mix and a large structured transaction written during the quarter.
Buchanan said the normalized ratio is expected to rise more gradually through the rest of 2026 as July renewals and the structured transaction continue to earn in. He said the company does not plan to alter its reserving philosophy or reduce conservatism in loss assumptions to manage the effects of the cycle.
Life reinsurance and specialty operations contribute
Life and health reinsurance generated a total technical result of more than €1 billion in the first half. The second-quarter technical result was €528 million, above the pro rata level needed to meet the annual target. Munich Re’s life contractual service margin stock reached €16 billion, supported by new business and favorable currency effects.
The company completed a longevity transaction covering €4 billion of pension liabilities in the first half and said two large structured U.S. transactions would be reflected in its results later in the year. Jurecka said the company remains selective in transactional business and that aggregate experience was tracking slightly better than expected.
When asked about a public long-term-care transaction involving Manulife, Jurecka said Munich Re generally has limited appetite for standalone long-term-care risk, but evaluates client relationships and customized transactions on a broader risk-and-return basis. He described the arrangement as a proportional treaty and said details available publicly represented what the company could disclose.
Global Specialty Insurance, or GSI, reported a first-half combined ratio of 86.3%, including an 88.9% ratio in the second quarter. Reported GSI revenue declined about 3% year over year in the first half, though organic growth was positive after adjusting for currency and accounting effects.
Buchanan said growth opportunities include Hartford Steam Boiler, international specialty markets, European surety products and selected North American excess-and-surplus lines. He said GSI’s expense ratio is weighted by acquisition costs paid through distribution channels and does not necessarily indicate weaker internal operating efficiency.
ERGO results and investment income
ERGO reported a second-quarter net result of €321 million, including €235 million from ERGO Germany and €86 million from ERGO International. The quarter benefited from investment performance, particularly private equity investments, while German P&C operations produced good technical profitability and adopted a more prudent reserving approach, Buchanan said.
Management retained its €24 billion ERGO insurance-revenue guidance for 2026. Buchanan said expected second-half growth will be supported by continued expansion and reinsurance internalization at ERGO NEXT Insurance, consolidation of the group’s Chinese life business, and the acquired Gjensidige business in the Baltics.
ERGO NEXT reported an 88.6% combined ratio in the U.S. business disclosed under ERGO International. Buchanan said the result was encouraging but should not be treated as the business’s normalized ratio. The company still expects ERGO NEXT to reach overall bottom-line break-even by the end of 2027, as it continues to invest in capabilities.
Munich Re’s investment return was 5.5% in the second quarter and 4.2% in the first half, above its full-year guidance of more than 3.5%. The running yield reached 4%, aided by higher interest rates, dividend seasonality and inflation-linked bond effects. The reinvestment yield increased to 4.3%.
The group’s Solvency II ratio rose to 304% in the second quarter. Jurecka said Munich Re remains committed to returning excess capital through rising dividends and share buybacks, while maintaining its Ambition 2030 objectives of more than 18% return on equity and average annual earnings-per-share growth above 8%.
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.
