Munich Re, 1Q2020: COVID-19 losses slowed the profit growth

7 May 2020 — press.release
During the first quarter of 2020, Munich Re generated a profit of EUR 221 million, 65% lower year-on-year, decrease mostly driven by the pandemic effects on the markets and world-wide businesses.

The operating result fell to EUR 397 million (1Q2019: EUR 771 million). Gross premiums written increased by 6.8% year on year to EUR 14,284 million.

The group's solvency ratio was 212% (237% at 31 December 2019), which sits within the ideal range (170-220%). The balance sheet shows an annualised return on equity (RoE) of 3.9% in Q1.

Under its 2019/2020 share buy-back programme, Munich Re repurchased 4.2 million of its shares, with a total value of EUR 1.0 billion. As announced on 31 March 2020, implementation of the scheduled 2020/2021 share buy-back programme has been discontinued until further notice and until there is greater clarity both on the actual burdens arising from COVID-19 and on capital requirements for potential organic or inorganic business opportunities.

Munich Re 1Q2020 preliminary figures, y-o-y changes

  • Gross written premiums: EUR 14,284 million (+6.8%), of which:
    • Reinsurance L&H: EUR 3,079 million (+6.3%)
    • Reinsurance P&C: EUR 6,156 million (+12.2%)
    • ERGO: EUR 5,050 million (+1.1%)
  • Net earned premiums: EUR 12,646 million (+8.7%), of which:
  • P&C Combined ratio: 106.0% (+8.7 pp.)
  • Investment result: EUR 1,920 million (+9.3%)
  • Consolidated result: EUR 221 million (-65.1%), of which:
    • Reinsurance L&H: EUR 8 million (-95.6%)
    • Reinsurance P&C: EUR 141 million (-61.7%)
    • ERGO: EUR 72 million (-14.7%)


The reinsurance field of business contributed EUR 149 million (1Q2019: 548) to the consolidated result in Q1. The operating result amounted to EUR 298 million (1Q2019: 633). Gross premiums written increased to EUR 9,235 million (1Q2019: 8,380).

Life and health reinsurance business generated a profit of EUR 8 million (1Q2019: 180) in Q1. Gross premiums written rose to EUR 3,079 million (1Q2019: 2,896). The low quarterly result in this segment is attributable mostly to negative developments in North America that are altogether unrelated to the coronavirus pandemic. Instead, the low result was caused by higher-than-anticipated mortality in the USA, a catch-up effect owing to delays in claims reporting, and premium refunds in excess of expectations for some old policies. In Canada, reserves for outstanding claims were increased following a further reduction in interest rates. Business outside of North America was within expectations; a negative loss experience in the United Kingdom was offset by a higher-than-expected contribution to profits from Australia. The technical result, including business with non-significant risk transfer, was EUR 56 million (1Q2019: 112). Despite the weak start to 2020 in this segment, Munich Re still continues to assume that achieving its annual target of a technical result of EUR 550 million, including business with non-significant risk transfer, is still within reach.

Property-casualty reinsurance contributed EUR 141 million (1Q2019: 367) to the result in Q1. Premium volume rose to EUR 6,156 million (1Q2019: 5,484). The combined ratio (CR) was 106.0% (1Q2019: 97.3%) of net earned premiums.

Major losses of over EUR 10m each totalled EUR 1,181 million (1Q2019: 479). These figures include gains and losses from the settlement of major losses from previous years. Major-loss expenditure corresponds to 21.1% (1Q2019: 9.7%) of net earned premiums, and was thus well above the long-term average expected value of 12%. Man-made major losses amounted to a considerable EUR 973 million (1Q2019: 283), mostly due to losses stemming from the cancellation or postponement of major events on account of the coronavirus pandemic. Major losses from natural catastrophes amounted to EUR 208 million (1Q2019: 195).

In Q1, loss reserves of around EUR 224 million were released for basic claims from prior years, which corresponds to 4.0% of net earned premiums. Munich Re still aims to set the amount of provisions for newly emerging claims at the very top end of the suitable estimation range, so that profits from the release of a portion of these reserves are possible at a later stage.


The Group's investments (excluding insurance-related investments) performed well, with the investment result increasing to EUR 1,920 million (1Q2019: 1,757) in Q1 despite turmoil in the capital markets. The balance of gains and losses on disposal excluding derivatives decreased to EUR 377 million (1Q2019: 602). Regular income from investments fell to EUR 1,544 million (1Q2019: 1,611).

The net balance of derivatives rose to EUR 1,600 million (1Q2019: -231). This very good net balance of derivatives is the result of hedging against interest-bearing investments and equities, which gained significantly in value due to developments in the capital markets. It was thus possible to largely compensate for write-downs and losses on the disposal of equities. Group's prudent risk management and wide-ranging hedging strategies proved themselves in recent weeks, as they were truly tested by capital market developments.

Overall, the Q1 investment result represents a return of 3.1% on the average market value of the portfolio. The running yield was 2.5% and the yield on reinvestment was 1.9%. For purposes of risk mitigation, Munich Re reduced its equity-backing ratio, including equity derivatives, to 3.5% as at 31 March 2020 (6.4% as at 31 December 2019).

Christoph Jurecka, CFO at Munich Re, stated:

"The impact of the coronavirus pandemic on lives and economies is on our minds every day. We express our sympathy for the victims and their families. Munich Re is doing everything it can to protect the health of its clients, staff members and their families. The high losses due to COVID-19 are financially manageable for Munich Re. Thanks to our strong balance sheet and our prudent risk management, we remain a reliable partner to our clients - even in these challenging times."

More financial information about Munich Re can be found at


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