Munich Re, 2Q2020: Consolidated profit stood at EUR 579 million, impacted by COVID-19 losses

6 August 2020 — press.release
In the second quarter of 2020, Munich Re generated a consolidated profit of EUR 579 million, 41.7% smaller compared to the value recorded in the second quarter of 2019. COVID-19 related-losses totaled EUR 700 million, dragging the profit down.

COVID-19 related-losses from January to June 2020 amounted EUR 1.5 billion. Approximately EUR 1.4 billion was attributable to property-casualty reinsurance and around EUR 0.1 billion to life and health reinsurance. In the ERGO field of business, pandemic-related losses were in the low double-digit million euro range.

The operating result fell year on year to EUR 755 million (-46.8%), while the other non-operating result amounted to EUR -6 million (2Q2019: -54). The currency result totaled EUR 23 million, and the effective tax rate was 19.3% (2Q2019: 25.7%). Gross premiums written increased to EUR 12,827 million (+8.7%).

Munich Re's solvency ratio remained stable at 211% in Q2 (1Q2020: 212%). In 2Q2020, annualized return on equity (RoE) amounted to 10.4%.

Munich Re 2Q2020 preliminary figures, y-o-y changes

  • Gross premiums written: EUR 12,827 million (+8.7%), of which:
    • Reinsurance L&H: EUR 3,332 million (+21.6%)
    • Reinsurance P&C: EUR 5,524 million (+14.1%)
    • ERGO: EUR 3,971 million (-5.8%)
  • Net earned premiums: EUR 12,515 million (+5.6%)
  • Operating result: EUR 755 million (-46.8%)
  • Consolidated result: EUR 579 million (-41.7%)


The reinsurance field of business contributed EUR 407 million (-52.6%) to the consolidated result in Q2. The operating result amounted to EUR 465 million (-60.0%). Gross premiums written rose considerably to EUR 8,856 million (+16.8%).

In Q2, Life and health (L&H) reinsurance business generated a profit of EUR 59 million (-61.9%). Premium income increased to EUR 3,332 million (+21.6%). The technical result, including business with non-significant risk transfer, was EUR 48 million (2Q2019: 72). "From today's perspective - owing in particular to losses stemming from a mortality rate pushed up by COVID-19 - the annual target of EUR 550 million set for the technical result, including business with non-significant risk transfer, is no longer realistically attainable," the group mentions.

In Q2, property-casualty (P&C) reinsurance business contributed EUR 348 million (704m) to the result. Premium volume rose to EUR 5,524 million (+14.1%). The combined ratio was 99.9% (2Q2019: 86.9%) of net earned premiums in Q2.

Major losses of over EUR 10 million each totaled EUR 799 million (2Q2020: 202). These figures include gains and losses from the settlement of major losses from previous years. Major-loss expenditure corresponds to 14.8% (2Q2019: 4.1%) of net earned premiums, and was thus above the long-term average of 12%. This was primarily attributable to major losses associated with the coronavirus pandemic. In this context, the most significant losses were incurred in connection with the cancellation or postponement of major events. On a smaller scale, there were also losses in other lines of property-casualty reinsurance, including business interruption. All in all, man-made major losses amounted to a considerable EUR 632 million (2Q2019: 47). Major losses from natural catastrophes were comparatively low, at EUR 167 million (2Q2019: 155).

Prices across the Munich Re portfolio increased by 2.8%. This figure is risk-adjusted. Munich Re anticipates that the market environment will see further year-on-year improvement in the next large renewal round in January, as in previous renewals in the current year.


The Group's investment result (excluding insurance-related investments) decreased to EUR 1,697 million (-11.6%) in Q2.

The balance of gains and losses on disposals excluding derivatives increased to EUR 1,189 million (2Q2019: 436). This increase is partly due to the disposal of fixed-interest securities for financing the additional interest reserve and to higher gains on disposals in reinsurance that arise inevitably from the restructuring of portfolios of fixed-interest securities against a backdrop of falling interest rates.

The net balance of derivatives amounted to EUR -906 million (2Q2019: -97). Upward trends in equity markets resulted in losses on derivatives for hedging the equity portfolio in primary insurance. These losses were partly offset by gains on the disposal of equities and by dividends, with a parallel increase in unrealised gains and losses on equities.

Regular income from investments fell slightly to EUR 1,721 million (2Q2019: 1,848).The Q2 investment result represents a return of 2.7% on the average market value of the portfolio. Munich Re's investment portfolio (excluding insurance-related investments) increased to EUR 230,080 million (4Q2019: 228,764).

Joachim Wenning, Chairman of the Board of Management, said:

"The world is far from defeating the coronavirus. That is why we have been doing everything in our power to protect staff and their families as well as clients and contractual partners from COVID-19. Munich Re will emerge from this crisis economically stronger. We are growing profitably, while taking steps to benefit from the significantly improved market conditions for reinsurers. In addition, we are utilising the capital originally earmarked for the 2020/2021 share buy-back programme - which we will not implement - to invest in profitable reinsurance growth. Prices have risen in nine consecutive renewal rounds, and premium income has grown correspondingly. With our high-quality portfolio, we expect to post a premium volume of EUR 54bn in 2020 - which would set a new record in the 140-year history of Munich Re."

More financial information about Munich Re can be found at


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