Letter to Shareholders

Dear Shareholders,

Munich Re continues to thrive. We generated a net result of €5.7bn in 2024, outperforming four annual targets in a row. Our profit growth has been substantial and sustained in recent years. In comparison with our peers, our achievements stand out.

And continually rising net results are not the only sign of our Group’s success. Our share price likewise mirrors our strength. After topping €400 for the first time ever in 2023, Munich Re’s share price surpassed the €500 mark in 2024. Since the launch of our five-year Ambition 2025 strategy programme in 2021, our share price had essentially doubled by the end of 2024.

We also continue to be at the forefront of the eight leading (re)insurers in Europe in terms of total shareholder return. This is where the greatest value for shareholders is created through rising share prices and dividends. Simply put, the trust you place in our Group pays off.

Subject to approval by the Annual General Meeting, we will increase the dividend by €5 to €20 per share. We have also approved a new share buyback with a volume of €2bn, a rise of €500m year on year. This boosts our distributions to shareholders for yet another significant increase.

In economic terms, 2024 was another spectacular year for Munich Re, which enabled us to make further provision once again. In addition to boosting reserves, we realised tactical investment losses so as to profit from higher interest rates upon reinvestment – in turn fostering future profits. Our balance sheet and capital position continue to be exceptionally strong. This makes Munich Re resilient to crisis.

That is important, as market losses due to natural disasters have been going up, and only up. 2024 was no exception – on the contrary, this trend has even accelerated. Natural catastrophes caused US$ 320bn in worldwide losses last year, of which about US$ 140bn were insured. Only two years since 1980 were more expensive for our industry. But this claims development has not caught us off guard. Indeed, overall our risk models have proved to be very accurate one year after another. And we have in total managed to earn the requisite rates. As in years past, Munich Re’s major-loss expenditure in 2024 matched our budgeted amount almost exactly.

When we look at the macroeconomic environment in which we operate, we are confronted with something no less challenging. Global economic growth in 2024 was merely moderate. And the outlook for 2025 is not much better. We predict that the world’s economy will grow moderately – with solid growth in the United States, but only weak growth in Europe and China’s economy slowing down further.

And then there are geopolitical uncertainties. Elections are leading to change in many countries. New motives and ambitions are emerging. New balances of power are forming. The world order has become more fragile. When turbulence reigns, strength is key. Now more than ever, Munich Re is a financial powerhouse. And that makes us resilient to external influences.

In the interest of strategic leadership in a competitive industry, we excel by anticipating change and ensuring that we are fit for the future. This applies, for example, to artificial intelligence and other technological advancements. Munich Re once again made targeted investments in AI applications last year. Throughout the Munich Re Group, we have identified, launched or already implemented over 300 AI use cases. In the medium term, deploying artificial intelligence will help to increase efficiency, enhance our competitive edge and close gaps created by demographic change.

Our financial stability can largely be traced to the diversification of our business portfolios. As all our portfolios are now profitable, we are better positioned than ever to offset fluctuations in (re)insurance profit. And now for some details on each operating segment.  

In 2024, ERGO achieved its annual target by generating a net result of around €790m. ERGO earned much more insurance revenue in international business year on year, which was primarily attributable to property-casualty insurance business in Poland and Thailand. Revenue in international health business likewise rose substantially.

ERGO has successfully acquired companies outside of Germany in recent years, paving the way for further profitable growth. Since 2024, ERGO has been the sole owner of the Norwegian health insurer Storebrand Helseforsikring AS¹ after acquiring the remaining 50% of the voting shares. ERGO also concluded in 2024 an acquisition agreement for the Baltic non-life insurer ADB Gjensidige. And since obtaining control in 2023 of Nam Seng Insurance, a property-casualty insurer in Thailand, ERGO has improved its market position there and transformed the entity into one of the country’s ten largest property insurers.

In the ERGO Life and Health Germany segment, insurance revenue rose thanks to long-term and short-term health business in particular. Demand for supplementary insurance continued to rise, with considerable interest in travel insurance products, too. New business grew with regard to both cover for life risks and creation of capital-efficient retirement provision.

In the Property-casualty Germany segment, insurance revenue increased – particularly in fire and property as well as motor insurance.

The reinsurance field of business continues to be very profitable. We expanded reinsurance business further in 2024, with insurance revenue rising to just over €40bn and this field’s result to about €4.9bn – a billion euros more year on year.

The performance of the life and health segment in particular remained excellent. In fact, we surpassed the annual target for this segment after just the first nine months of 2024 thanks to substantial growth in new business, among other factors. The 2024 total technical result here ultimately amounted to €2.1bn, which was €650m more than initially expected. That set a new record profit level for life reinsurance. The contractual service margin (CSM)², which represents the value of anticipated future profits, rose during 2024 from €12.3bn to €14.5bn.

Munich Re also grew profitably once again in its property-casualty segment – in traditional reinsurance and specialty insurance business alike; the latter is managed by our Global Specialty Insurance (GSI) division. The combined ratios for both lines of business proved robust in the face of the above-mentioned nat cat claims trends. Although the lion’s share of claims here was once again attributable to the peak risk of hurricanes in the USA, secondary perils such as flooding, severe storms and wildfires also resulted in high claims burdens. Against a backdrop of rising market losses, such perils will become increasingly significant going forward.

Buoyed by sustained, very good earnings performance in primary insurance and reinsurance, we were able to foster the rise in current return on investment through the early sale at a loss of fixed-interest securities with low interest rates – the proceeds of which we invested anew at higher interest rates. We did this to generate higher investment returns in the long term. Our reinvestment yield was 4.4% in 2024, with the running yield rising to 3.5%. Overall, the 2024 investment result represented a return of 3.1% – which outperformed our target of more than 2.8%.

All in all, 2024 was the latest very good year of many for Munich Re. Profits throughout the Group have risen in significant and sustained ways in recent years. Reinsurance business truly stands out in this regard. We are fully on track to meet – and in some cases even surpass – the financial and nonfinancial targets of Ambition 2025.

Our profit target for 2025 is €6bn. The outlook remains good for growth and profits in property-casualty reinsurance. New business in life and health continues to grow. And ERGO is set to stay the course of stable success. Although we expect our investments to continue benefiting from respectable interest rates, confidence must always be tempered with prudence. There is no guarantee that profits will rise for evermore. The extensive wildfires in Los Angeles in January 2025 served as an alarm bell that large loss events can occur at any time. Depending on risk exposure, extreme events can even impact our financial targets. But these events also reinforce the value of the products we sell.

2025 will be a pivotal year for Munich Re. We are now in the home stretch of Ambition 2025. And in December of this year we will unveil our next strategy programme, which we are working flat out to formulate.

Our nearly 44,000 staff members worldwide are fully committed to making Ambition 2025 a complete success. When it comes to achieving goals, 2025 will be a milestone. We will do our very best to ensure it is a year that we will all recall fondly.

I wish to thank you, dear shareholders, for the trust you place in our Group.

Yours sincerely,

Joachim Wenning