MUNICH Re's outlook for 2017: business environment remains challenging

"For the financial year 2017, MUNICH Re is aiming for a profit in the range of EUR 2.0-2.4 billion in what is set to be a challenging environment," Chairman of the Board of Management, Nikolaus von BOMHARD said on the group's outlook for 2017.

Looking at the current challenges, von BOMHARD stated: "Digitalisation is changing client demand, allows for the development of innovative business models, and requires us to set up partnerships that would previously not have been considered. More than ever, MUNICH Re is a company embracing change - as demonstrated by our innovation schemes, the ERGO Strategy Programme, and the recent decision to adopt a new set-up in the global health markets. My successor as Chairman of the Board of Management, Joachim WENNING, will continue to drive this change forward."

MUNICH Re is aiming for a consolidated result of EUR 2.0-2.4 billion in 2017, subject to major losses being within normal bounds, and to its income statement not being impacted by severe currency or capital market developments, significant changes in tax parameters, or other exceptional factors.

The consolidated result in reinsurance is projected to be in the range of EUR 1.8-2.2 billion. In life and health reinsurance, the technical result - including the result from reinsurance treaties recognised in the non-technical result owing to insufficient risk transfer - should be at least EUR 450 million. In property-casualty reinsurance, MUNICH Re is aiming for a combined ratio of around 97% of net earned premiums in 2017, taking into account the relatively low incidence of major losses until the end of February. At the beginning of the year, MUNICH Re projects major losses in the order of around EUR 2 billion for 2017, corresponding to an unchanged 12% of net earned premiums.

MUNICH Re expects the ERGO field of business to contribute EUR 150-200 million to the consolidated result. The combined ratio for the ERGO Property-casualty Germany segment should be around 99% in 2017, provided that major losses remain within normal bounds. A combined ratio of around 98% is expected for the ERGO International segment if major losses are at a normal level.

On 1 February 2017, the MUNICH Health field of business was integrated into the two larger fields of business, reinsurance and ERGO. Thus the profit contribution of health reinsurance has been included in the profit target for reinsurance. Profits from international health primary insurance will be recognised under ERGO International.

MUNICH Re anticipates that interest rates will also remain very low overall in 2017, with correspondingly lower regular income from fixed-interest investments. Overall, MUNICH Re expects an investment result of around EUR 7 billion, representing a return on investments of about 3%.

Assuming exchange rates remain stable, the Group anticipates that its gross premiums written for the financial year 2017 will be in the range of EUR 48-50 billion. Gross premium should be in the range of EUR 31-33 billion for the reinsurance field of business, and EUR 17-17.5 billion for the ERGO field of business. Total premium income in the ERGO field of business (including the savings premiums of unit-linked life insurance and capitalisation products) should amount to EUR 18-19 billion in 2017.

Related articles

MUNICH Re expects to generate a profit of EUR 2.1-2.5 billion in 2018

MUNICH Re announced it has raised its profit guidance compared with the previous year and is expecting to generate a profit of EUR 2.1-2.5 billion in 2018. The Company also announced that it would buy back another EUR 1 billion worth of shares before the Annual General Meeting in 2019.


GENERALI Group reports record annual operating result

GENERALI Group reported FY net profit of EUR 2.11 billion, up by 1.4% y-o-y, while its operating result amounted to a record of EUR 4.89 billion (2.3% more y-o-y) "thanks to the positive performance of the life segment and the Investments, Asset & Wealth Management business and to the cost reduction reached two years ahead of schedule (-EUR 200 million in mature markets)".



AON UK Ltd appoints new Chief Risk Officer

AON UK Ltd has confirmed the appointment of Matt KIMBER as Chief Risk Officer (CRO). Matt KIMBER has joined AON from JARDINE LLOYD THOMPSON Group (JLT), replacing John NICHOLSON who has been interim CRO for the last 11 months.


New Head of Investor Relations at AEGON

Jan Willem WEIDEMA has been appointed as the new Head of Investor Relations at AEGON. He succeeds Willem van den BERG who has led the Investor Relations team over the past 7 years.



"Insurance and Pensions reloaded" - the 7th EIOPA Annual Conference

The 7th EIOPA Annual Conference takes place today in Frankfurt am Main, Germany. A review of the current supervisory covergence issues and of the prospects of the Pan European Personal Pension Product are on the event's agenda, together with analyzing the ways in which regulation may enable innovation.



"IIF2017 - Insurance in the DIGITAL World" Conference took place in Vienna

"IIF2017 - Insurance in the DIGITAL World" conference brought together in Vienna well-known insurance professionals from all over the world who analyzed the latest digital trends in the industry, taking into account the fast digitalization of the financial services providers' world, in particular in the insurance field, which is creating both huge opportunities and strong challenges for the players.



Croatian Insurance Days Live

On 9 November has started in Opatija, Croatia, the 2017 edition of the Croatian Insurance Days Conference, the traditional meeting of the Croatian insurance top professionals with their European peers. XPRIMM Publications are supporting the event as Media Partners.



The 2017 Baden Baden Meeting: Short recap

The Baden-Baden meeting, one of the key events in the reinsurance calendar, has just set the final point of this year's edition. XPRIMM Publications have reported from the meeting's premises. Let's recap!


Baden Baden Headlines 3: CEE insurance markets are attractive for reinsurers

Central and Eastern Europe insurance markets are an important source of business for Lloyds, total premium income from this region increasing by EUR 64 million since 2010, pointed out the Lloyd's representative in a seminar dedicated to CEE insurance markets: "We are seeing strong growth from Czech Rep, Poland, Slovakia and Ukraine. At the same time are some contractions from Russia, Bulgaria, Romania and Hungary due to challenging trading conditions as political implications and other sanctions".


See all