The Weimar Republic and the Second World War

No sooner had the economic slump caused by the First World War been overcome than the Second World War broke out. The consequences of the war posed a serious threat to the company’s existence. Besides assets in eastern Germany, those in the countries involved in the war and in many neutral countries were lost. International business was prohibited until 1950. False information on foreign assets was submitted, as a result of which fines and custodial sentences were imposed by the American Military Tribunal. On top of that, fires and natural disasters led to large losses.

1920 – The inter-war years

After the war, the Treaty of Versailles keeps important countries such as Russia, France, Britain and the USA closed to Germany for many years. Many reinsurance treaties with foreign clients are annulled. Munich Re is even denied access to its portfolios in the USA.

1922 – The first change in Chairman

Carl von Thieme moves to the Supervisory Board in 1922; his successor as Chairman of the Board of Management is Wilhelm Kisskalt, who leads the company through difficult and changing times until 1937. In 1938, Dr. Kurt Schmitt takes over as Chairman and heads up the company until 1945.

1923 – Founding of Union Zurich

During Kisskalt’s term of office, the Union Reinsurance Company is established in Zurich, receiving its licence on 4 June 1923. The company is used to maintain Munich Re’s international business during the Second World War.

1937 – Return to pre-war levels

At the end of the 1920s, Munich Re is still suffering the effects of the First World War. From 1933, exchange control and political developments have an adverse effect on international business. Nevertheless, in 1937 Kisskalt is able to report to the Supervisory Board that business has returned to pre-war levels and the company is back to its old strength despite being unable to do business with Russia and the USA.

1938 Dr. Kurt Schmitt is appointed Chairman

Dr. Kurt Schmitt, the Reich’s Economics Minister from 1933 to 1934, takes over from Kisskalt as Chairman and heads up the company until 1945.

1940 – The war years (II)

The war also leaves its mark within the company. Consumption of paper and other materials has to be drastically reduced; after work, typewriters and adding machines have to be carried into the air-raid shelter. In 1943, Accounting is transferred to Schliersee for security reasons.

1945 – After the Second World War

The situation after 8 May 1945 is critical, with the company's continued existence at risk. Not only has it lost its assets in the countries involved in the war and in the eastern areas of Germany, but also most of its assets in neutral countries.

1945 – A new Chairman

Dr. Eberhard von Reininghaus is appointed Chairman, shouldering the difficult task of rebuilding the company until his death in 1950.

1946 – Criminal proceedings against Munich Re

In the summer of 1946, Munich Re is brought before the highest American Military Tribunal charged with providing false information on its foreign assets. The tribunal imposes a fine of four million reichsmarks; three members of the Board, Gustav Mattfeld, Georg Paul and Hans Oldenburg are each sentenced to 18 months’ imprisonment. Due to the age and poor health of all three, the sentences are suspended after six months. Dr. Franz Buchetmann and Willy Reichert are sentenced to two and a half years’ imprisonment. Though acquitted, Dr. Alois Alzheimer and Kurt Schmitt are initially prohibited from working at the company, but a subsequent appeal against this restriction is successful.

1947 – Complete prohibition of activity outside Germany

Control Council Law no. 47 dated 10 March prohibits any activity by German reinsurers outside Germany.

1948 – Currency reform

On 21 June, the reichsmark is replaced by the deutschmark. Munich Re has to prepare a final balance sheet in reichsmarks by 20 June and a conversion account by 21 June. An opening balance sheet is then drawn up in deutschmarks. Munich Re’s equity after the currency reform amounts to DM 29m.

1948 – Large losses a further burden on business

After World War II, it is virtually impossible to achieve a geographical spread of risk, and all business in eastern and central Germany and in other countries has been lost. As a result, the impact of the large losses occurring after the currency reform is all the more severe. An explosion at BASF in Ludwigshafen, a major blaze at Karstadt, a fire at Brohntal AG, the Holzminden fire and the Adana fire all occur within a short space of time.

1949 – Heavy losses from storms

Winter storms, especially those on 3 and 4 December, cause severe damage in the Rhineland, Schleswig-Holstein and other parts of West Germany. The storm losses consume the profits earned during the entire period since the company started offering windstorm insurance in 1900.