Munich Re lifts 2023 profit guidance with ‘significantly’ better P&C combined ratio

Reinsurance giant  Munich Re is targeting a consolidated profit of around €4 billion for the 2023 financial year  under the new reporting standard IFRS 17, with around €3.3 billion coming from its reinsurance field of business.

The world's second largest reinsurer expects its insurance revenues, which it noted represent the IFRS 17 item that will supersede “premiums” in future, to reach around €58 billion across the business.

Munich Re has said that it anticipates the return on investment to amount to at least 2.2%.

Within its reinsurance field of business, insurance revenues are projected to be around €39 billion and a profit of around €3.3 billion in 2023.

The combined ratio in property/casualty reinsurance is likely to “improve significantly” to around 86%, mainly owing to the disclosure method per IFRS 17 compared to the method under IFRS 4, Munich Re stated in its latest guidance for 2023.

In life and health reinsurance, Munich Re projects a total technical result of around €1 billion, which it said in future will include the disclosure of the result from business with non-significant risk transfer.

The ERGO field of business will contribute around €0.7bn to the consolidated result in 2023, with ERGO’s insurance revenues expected to total around €19bn. A combined ratio of around 89% is envisaged in the ERGO Property-casualty Germany segment, and about 90% in the ERGO International segment.

“All forecasts and targets face increased uncertainty owing to fragile macroeconomic developments, volatile capital markets and the unclear future of the pandemic,” management cautioned. “In particular, there continues to be considerable uncertainty regarding the financial impact of the Russian war of aggression in Ukraine.”

“The projections are subject to major losses being within normal bounds, and to the income statement not being impacted by severe fluctuations in the currency or capital markets, significant changes in the tax environment, or other one-off effects,” Munich re said.

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