Munich Re reveals €1bn share buy-back plan in 'challenging environment'

Munich Re has revealed it plans to buy back up to €1 billion of its own shares by April 2018, as it struggles to find profitable opportunities in what its chairman, who steps down in April this year, said will remain a challenging environment.

The buyback of up to 11 million shares would be equivalent to 3.5 percent of its share capital based on the current price.

Munich Re had already released preliminary results for 2016 in February in which it also proposed a dividend of 8.60 euros per share, up four percent on 2015.

The company made a profit of €2.6 billion in 2016. Its profit forecast for 2017 looks more cautious with the reinsurer predicting a profit of between €2 billion and €2.4 billion.

Nikolaus von Bomhard, chairman of the board of management at Munich Re, said: “With a profit of €2.6 billion for 2016, we have clearly met our most recent forecast of ‘well over €2.3 billion’. On the basis of this result, we are able to propose that this year’s Annual General Meeting raise the dividend to €8.60. Our dividend policy thus remains shareholder-friendly.”

On the outlook for 2017, von Bomhard added: “For the financial year 2017, Munich Re is aiming for a profit in the range of €2.0–2.4 billion in what is set to be a challenging environment.”

Looking at the current challenges, von Bomhard stated: “Digitalisation is changing client demand, allows for the development of innovative business models, and requires us to set up partnerships that would previously not have been considered.

“More than ever, Munich Re is a company embracing change – as demonstrated by our innovation schemes, the ERGO Strategy Programme, and the recent decision to adopt a new set-up in the global health markets. My successor as chairman of the Board of Management, Joachim Wenning, will continue to drive this change forward.”

Today’s top stories

Munich Re forecasts profits to dip, combined ratios to soar in 2017

Arcus 1856 targets property with former Berkley Re, Everest exec hire

Liability 'storm tracks' to revolutionise casualty modelling, claims Lloyd’s

CII appoints Zurich's regulatory and policy head to a new role

NN Group reappoints CEO Friese for another term

Did you enjoy reading this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.