Munich Re unveils ‘ambitious’ group profit target of €2.5bn for 2019

In its 2019 outlook, Munich Re has unveiled a group profit target of around €2.5bn, saying the reinsurer is “on track” to achieve this.

The German company has set its sights on increasing profits by €200m to around €2.5bn for 2019, with around €2.1bn to come from reinsurance and around €0.4bn from ERGO.

Referencing its good results in 2018, and the planned improvements in earning power for 2019, Munich Re said it would propose a significant increase in the dividend to €9.25 at the annual general meeting in April and launch a further share buy-back programme with a volume of €1bn. It said the moves are evidence of the reinsurer’s sustainable and shareholder-friendly capital repatriation policy.

The company has raised its expected technical result for life and health reinsurance to around €500m and has plans to improve the combined ratio for property-casualty reinsurance to around 98 percent this year.

In the ERGO property-casualty Germany segment, an improved combined ratio of about 93 percent is expected, while the combined ratio for the ERGO International segment will be around 95 percent, it said.

Munich Re also expects an investment result of around €6.5bn for 2019, representing a return on investment of about 3 percent.

Joachim Wenning, board chairman, said: “2018 was a successful year for Munich Re, and the good result is a clear endorsement of our long-term and ambitious goals. Following the significant increase in profit last year, we anticipate that profits for 2019 and 2020 will continue to rise, reaching our medium-term profit guidance of €2.8bn in 2020.

“In reinsurance, we are pursuing our ambitious growth targets, and the successes of ERGO’s Strategy Programme are becoming clearly evident. At the same time, we are reducing complexity in our internal processes and resolutely driving forward digital transformation. Munich Re is on track.”

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