Mastering the risk by acting responsibly
Our aim is to offer our investors a safe investment with an attractive return. For years, we have systematically pursued a risk and investment strategy that secures Munich Re’s sustainable development. We do not allow short-term trends in the international financial markets to throw us off course. The fact that we were able to manage the financial market crisis relatively well confirms we are on the right track.
Developments since the beginning of this decade have shown that we must expect » volatility in the international financial markets to remain high. Where and when crises and booms develop in future and the magnitude they assume is impossible to predict with certainty given the complexity of the international interdependences involved. Our risk and investment strategy allows for this fact. On the other hand, the capital market is sensitive to short-term developments of listed companies. It is against this background that we define our strategy.
Clear financial management brings long-term success
Munich Re has clearly positioned itself with its disciplined financial management. Our integrated risk management enables us to identify and manage all the significant risks in our Group. Our investment policy allows only investments based on our defined risk appetite and on sustainability. In pursuing this policy, we remain true to our principle of investing solely in assets we understand. Our value- and risk-based management is geared to the evaluation of risk on an economic basis. We consider only investment returns – particularly in the case of long-term business – that can be achieved even in times of crisis. It is this disciplined management that enables us to secure the financial strength of our company in the long term and that forms the basis of our business and our stakeholders’ confidence in Munich Re. That is why we were able to support our clients with comprehensive solutions and exploit new business opportunities even during the financial crisis. Munich Re’s shares offer all investors a » risk-return profile that is attractive in the long term. We are a safe investment and, as such, were in a position to maintain our dividend policy throughout the financial crisis and buy back shares as planned.
Investments in companies with sustainable business practices
Irrespective of developments in the financial markets, Munich Re has determined that 80% of Group-wide investments in shares and government and corporate bonds should comply with sustainability criteria. We are convinced that the risks of sustainable investments are often lower and their long-term returns tend to be higher because they are more crisis-resistant.
Munich Re is also an investor in renewable energy. Munich Re expects premium volume in this segment to increase substantially by 2020. In mid-2010, we launched our investment project RENT (renewable energies and new technologies). Since then, Munich Re and MEAG experts and have been sounding out the potential for significant investment in renewable energy and new technologies, in a move aimed primarily at energy generation from non-fossil sources. Munich Re's asset manager MEAG is responsible for selecting and managing the investments.
