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Strategy for value creation

The strategies of Munich Re for value creation build on the company’s competitive advantage in its areas of expertise – a robust combination of, financial strength, risk know-how and solutions competence – and intimate knowledge of market processes.

Three strategic priorities guide the business decisions of Munich Re (Group)

With total shareholder return virtually stable over time, Munich Re shares regularly earn top spots in peer comparisons. These excellent showings speak of the confidence of capital markets not only in our company, but also in the viability of our business model. 

From this position of strength and stability, backed by a strong balance sheet that gives us the flexibility to grow through organic growth or by acquisition, we have built an overarching strategy plan for Munich Re (Group). For its execution, we have set three priorities: We will increase our earning power, drive our digital transformation, and reduce the complexity of our organisation.

Growing earning power, while simplifying structures and processes

Executing the strategic plan of Munich Re (Group)

As part of the initiatives of Munich Re (Group) to increase and stabilise value growth, the company will seize business opportunities arising from the on-going demand for large and complex reinsurance programmes. At the same time, the reinsurance arm will leverage its underwriting competence to take on a wider range of risk in selected areas, while rigorously adhering to the risk policies of Munich Re.

Munich Re has the potential to manage a growing business with fewer resources. Analyses show that Munich Re can simplify – or even do away with – certain structures and processes, without adversely affecting business operations. As a result, one strategic focus of Munich Re is on streamlining and pruning these structures and processes.

Focus on digital transformation – from within and without

Pushing Munich Re’s digital transformation by building on the expertise of its reinsurance and primary-insurance arms

Munich Re is becoming more digital. We are investing systematically in digital transformation. Our focus is on solving the specific problems that our primary insurance clients or sales partners face, and in return we want to participate in the business this generates. We are one of the leading providers of cyber risk insurance, and we offer our clients insurance cover and a wide array of services ranging from preventive measures to the recovery of lost data.

As the market leader in managing cyber risk – an area fast gaining in importance – Munich Re is an active risk partner serving clients with an extensive range of products. Cutting-edge data analytics form the sound basis for efficient and flexible risk solutions and for scalable digital business models. The digital transformation is creating new roles for Munich Re, for example as a partner for small and medium-sized clients, offering solutions for the Internet of Things.

Cyber risks are one of the biggest threats to the networked economy. Munich Re is making highly targeted investments in know-how and development of networks in order to continually improve its services and insurance products. Together with technology partners, we want to keep on developing solutions for these risks in the future.
Torsten Jeworrek
Munich Re
Member of Board of Management

Solid showing in financial year 2018

In 2018 we increased our profit and achieved our result target – despite the volatile capital markets and high losses from natural catastrophes in the fourth quarter.
€2,275m
consolidated result as per 31 Dec. 2018
€9.25
dividend per share in FY 2018
€49.1bn
gross written premiums in FY 2018

Strategies of the Munich Re business fields

Traditional reinsurance business continues to have sustained growth potential

In the reinsurance field of business, we have already launched a wide array of initiatives and set out our ambitions. Together, these form the overall picture of where our journey will take us. 

Our strategic initiatives aim to secure profitable growth throughout the market cycle and can be grouped into three pillars: 

  • Growth
  • Business excellence
  • New strategic options 

We will continue to be present in all regions, in close proximity to our clients.  

We will move into further elements of the insurance value chain in line with our DNA, and develop new monetisation models.In summary, it is our ambition to expand our market leading position in our core field of business – reinforced by data and technology 

Munich Re combines its in-depth knowledge of risk with innovative technologies and insurance solutions to shape the transformation of the insurance industry. 

While the demands placed on insurers are changing rapidly, their fundamental role remains the same – namely to secure value in order to promote prosperity and preserve livelihoods. New technologies are giving rise to novel opportunities to do just that. Alongside loss indemnification itself, the importance of loss mitigation and avoidance is increasing.  

Yet a large portion of natural catastrophe losses remain uninsured worldwide – even in highly developed markets.  

Our strategy is to enhance our core business and push back its boundaries using digital ingredients. Reinsurance and insurance will continue to be the heart of our business. Munich Re is becoming more profitable, more digital and leaner.
Joachim Wenning
Munich Re
Chairman of the Board of Management

Primary insurance goes digital and global

As the primary-insurance arm of the Munich Re (Group), ERGO’s strategy plan centres on improving overall profitability and on reinforcing its role as one of the key players in its core markets in Europe and Asia. ERGO caters to more than 35 million, primarily private, customers worldwide. Its intuitively designed product and services combine short response times with personal consultations – either online or face to face.  

ERGO is driving forward the digital transformation of its business model. The primary insurer has launched Digital Ventures as a digital line of business, and its spin-off, nexible, has successfully established itself in the market as an online-only insurer. 

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