A second seismic shift: Munich Re under National Socialism (1933–1945)

Initially, the National Socialists’ assumption of power brings about no fundamental changes for business operations. The Board of Management complies with the National Socialists’ expectations. As a reinsurer, Munich Re is not directly involved in life insurance contracts with Jewish policyholders, but benefits indirectly from the increasing policy terminations. Via its reinsurance share, Munich Re is also involved in Allianz’ business with the SS. In the course of the war, Munich Re extends its influence in occupied areas and plans a new order for the continental European insurance industry under German domination.

Despite the new balance of power, Munich Re is anxious not to endanger good relations with foreign business partners. With one exception, it does not participate in the corporate takeovers in occupied countries, unlike other large German corporations with significant foreign business. When the Second World War ends, the very existence of the Company comes under threat. Munich Re loses all its assets abroad and access to all foreign markets. Its reserves and premium reserves, chiefly invested in Reich bonds and Reich treasury bills have become worthless following the end of the German Reich.

1933 – Treatment of Jewish staff members in Germany
The National Socialists call upon companies in the financial sector in particular to dismiss Jewish employees. In 1933, Munich Re has only one Jewish staff member, and she retires in March 1937 under circumstances that are not clear. Two other staff members are regarded as “Jewish Mischlinge” according to the Nuremberg Laws of 1935, but are not dismissed.

1934 – Cooperation with the German Labour Front (DAF)
In May 1933, free trade unions are banned in Germany and replaced by the German Labour Front (Deutsche Arbeitsfront – DAF). Munich Re acquires the goodwill of DAF by providing support for its staff, and reaps the rewards of this in its business. For example, in 1934 the DAF’s life insurer Volksfürsorge ceded Munich Re an 80% share of its reinsurance business.

1934/1935 – Kurt Schmitt returns to Allianz
Kurt Schmitt maintains good relations with the Nazi leadership. He has been a friend of Hermann Göring since 1930 and in 1933 accepts Reichsführer-SS Heinrich Himmler’s offer to join the SS with the honorary title and rank of Oberführer. In 1934, Schmitt asks to be relieved from his position as Reich Minister of Economics. He returns to Allianz in 1935 as Chair of its Supervisory Board and also receives a seat on Munich Re’s Supervisory Board.

1935 – Largest reinsurer again
For the first time since the First World War, Munich Re generates higher gross premium income than Schweizer Rück. Munich Re thus again takes on the mantle of the world’s largest reinsurer in terms of premium income.

1938 – Cancellation profits in life insurance
Following the pogrom on 9 and 10 November, a mass exodus of Jewish citizens from Germany begins. To finance their flight and escape anti-Semitic persecution, thousands of Jews cancel their life insurance. The premature termination of their agreements brings financial losses for the clients, while leading to cancellation profits for the primary insurers. Munich Re benefits from this as a result of its quota-share participations and thus posts profits of up to 600,000 reichsmarks in the 1938–1939 financial year alone.

1938 – Kurt Schmitt is appointed Chair
In late 1937, the Supervisory Board appoints Kurt Schmitt as Wilhelm Kißkalt’s successor. In the Supervisory Board’s view, it is politically shrewd to have a Chair with personal connections to the Nazi leadership – also with a view to blocking initiatives to nationalise the insurance industry. Schmitt becomes Chair of the Board of Management and remains in office until 1945.

1939 – Property from Jewish owners
Munich Re acquires several properties owned by Jews at prices below their market value. After the war, the Company makes restitution payments for this. A considerable profit was made as a result of “aryanisation”.

1939 – Foreign business via Union Rück
Since 1923, camouflaged transactions in countries where German companies are unwelcome or have no market access are conducted via the Swiss subsidiary Union Rück. In 1935, Munich Re grants Union Rück the authority to dispose of its foreign assets in the event of war. This enters into force upon the invasion of Poland on 1 September 1939. Union Rück assumes the liabilities arising from reinsurance treaties with clients from Allied and neutral states.

1940 – New cooperative agreement between Allianz and Munich Re
The reinsurance ratio of 50% officially agreed between Allianz and Munich Re is no longer in line with the relative sizes of the companies. Allianz has grown faster than Munich Re. At the end of the 1920s, the ratio is lowered to 37.5% by mutual agreement. Ten years later, Allianz is so economically strong that even this ratio seems too high, placing a strain on relations between the companies. The Boards of Management negotiate a new cooperative agreement in 1940, lowering Munich Re’s reinsurance ratio to 30%.

1940–1941 – Brief drop in premium
The war-related interruption to direct business relations with insurers in France, the United Kingdom and many neutral states leads to a slump in premium volume to 186m reichsmarks in 1940–1941. Due to additional new business in the occupied territories, premium volume rises again quickly, reaching a new high of around 250 million reichsmarks in the 1942–1943 financial year.

From 1940 – Participation in business with the SS
Several companies belonging to Munich Re in Warsaw are part of a consortium headed by the Allianz subsidiary Bayerische Versicherungsbank, which concludes several fire insurance contracts with the forced labour camp Płaszów near Kraków (a concentration camp from 1944). Alongside this direct participation, Munich Re is also involved in Allianz’ business with the SS via its reinsurance share. This also includes contracts insuring the barracks and operations in the concentration and extermination camps Auschwitz, Buchenwald, Dachau, Neuengamme, Ravensbrück, Sachsenhausen and Stutthof. The same applies for the contracts with which the Łódź ghetto administration insured itself with Allianz against fire, theft and other risks.

1941 – Acquisition of Čechoslavia in Prague
Following the occupation of Prague in early 1939, Munich Re pushes for a majority shareholding in the primary insurer Čechoslavia. This does not come about until 1941, after the former Chair of the Board of Directors and his deputy are murdered by the German occupying forces. The owners then give in to the violence and sell their shares – Munich Re increases its shareholding to 55%. This is the only instance in which Munich Re uses the occupation for a takeover. In other occupied territories, it instead attempts to keep its network unscathed and even defends primary insurers in which it holds a participation.

1941 to 1943 – Association for the coverage of large risks
At Munich Re, plans are drawn up to reshape the European insurance industry under German domination. Kurt Schmitt initiates an “Association for the coverage of large risks”, which is tantamount to a politically motivated cartel. Apart from Munich Re, the association includes the Italian insurers Generali and Riunione, and Schweizer Rück. Schmitt becomes the President of the association and heads it until it collapses in late 1943 when Italy changes sides.

1944 – Isolated aid for Jewish representatives of the Group
Whilst no Jews were employed at Head Office in Munich – with the exception of one staff member – the situation in many Group companies outside Germany was very different, for example in occupied Poland. Here, the companies in which Munich Re holds participations dismiss their Jewish staff members owing to the rigid statutory provisions. In individual cases, however, members of the Board of Management intercede on behalf of Jewish representatives of the Group and protect them from deportation. Business considerations influence these actions. For example, Alois Alzheimer travels to Hungary in June 1944 and arranges for the Director of Europäische Güter- und Reisegepäck-Versicherung in Budapest and his brother to be allowed to continue working as accountants. Both are Jews.