Munich Re: Record profits despite declining sales – what’s behind it?

Munich Re: Record profits despite declining sales – what’s behind it?

Munich Re, one of the big players in the reinsurance market, reported pleasing results for the first half of 2025. The group has confirmed its profit forecast for the full year at 6 billion euros. But at the same time, as the reports show, there are some challenges facing the reinsurance market. Loud Insurance Journal Both the price level and the volume in reinsurance fell in July, which can be attributed to a strategic realignment towards profitability and portfolio optimization.

In the first half of 2025, the company achieved an impressive total underwriting result of 5,088 million euros, which is almost the same as the previous year (5,086 million euros). Particularly noteworthy is the record result of 2.1 billion euros in the second quarter, made possible by a good combined ratio and positive developments in life reinsurance. On the other hand, however, the net financial surplus fell from 1,012 million to 213 million euros, and the consolidated result fell from 3,715 million euros to 3,178 million euros.

Reinsurance under pressure

Reinsurance remains a central component of business operations and contributed EUR 2,687 million to the consolidated result. However, the company suffered a decline of 16.7% compared to the previous year. The reinsurance area for life and health suffered from major losses, which reduced the result from 1,000 to 845 million euros. The decline in sales due to a weaker US dollar was also felt in property and casualty reinsurance: here the segment result fell from 2,010 million euros to 1,537 million euros.

Although the combined ratio improved to 77.9 percent, it remains under pressure. Natural disasters that have struck many parts of Europe in recent years have placed even greater strain on the combined ratio. How The shareholder reported that they caused costs of around 20 million euros in the property and casualty business, which represents a huge decrease compared to the previous year.

Looking to the future

The reinsurance business has decent growth potential in Germany. Loud Mordor Intelligence The German reinsurance market is expected to grow to over $96 billion by 2029 at an annual growth rate of 4.20%. Munich Re plans to strengthen its presence with innovative approaches such as the CertAI validation service to optimize the use of artificial intelligence in customer service.

Experts expect an attractive market environment for the upcoming contract renewals in January 2026. It remains to be seen how prices will stabilize, as risk-adjusted prices fell to an average of 2.5% in the last round of renewals. But despite all the challenges, optimism at Munich Re is great. CEO Joachim Wenning is confident and is consistently leading the company towards its annual goals.

Overall, it is important to follow developments in the reinsurance sector closely, because a good hand will be crucial in order to assert oneself in the changeable market environment.