Munich Re withdraws profit guidance for 2020 and discontinues share buy-back until further notice
In the first quarter of 2020, Munich Re’s property-casualty reinsurance segment saw a considerable claims burden from losses in connection with the effects of the significantly worsened COVID-19 crisis. The claims expenditure is due mainly to the cancellation and postponement of large events. Hence, even though work on the quarterly accounts has just begun, Munich Re only anticipates profits in the low three-digit million euro range for the first three months of 2020 (Q1 2019: €633m).
Owing to the great uncertainty concerning the macroeconomic and financial impacts of COVID-19, from today’s perspective – and assuming a burden from major man-made and natural-catastrophe losses that is otherwise in line with expectations – Munich Re will not attain its profit guidance of €2.8bn for 2020 as a whole.
Even after the impacts of capital-market and loss developments, Munich Re’s solvency ratio is still comfortably within the communicated optimal range of 175–220% of the requirement. The proposal to the Annual General Meeting on 29 April remains unchanged: that the dividend be increased to €9.80 per share. Implementation of the 2020/2021 share buy-back programme announced on 26 February 2020, however, will be 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.
Note: "Solvency ratio" excluding the application of transitional measures for technical provisions
Munich Re is one of the world’s leading providers of reinsurance, primary insurance and insurance-related risk solutions. The group consists of the reinsurance and ERGO business segments, as well as the capital investment company MEAG. Munich Re is globally active and operates in all lines of the insurance business. Since it was founded in 1880, Munich Re has been known for its unrivalled risk-related expertise and its sound financial position. It offers customers financial protection when faced with exceptional levels of damage – from the 1906 San Francisco earthquake through to the 2017 Atlantic hurricane season and to the California wildfires in 2018. Munich Re possesses outstanding innovative strength, which enables it to also provide coverage for extraordinary risks such as rocket launches, renewable energies, cyberattacks, or pandemics. The company is playing a key role in driving forward the digital transformation of the insurance industry, and in doing so has further expanded its ability to assess risks and the range of services that it offers. Its tailor-made solutions and close proximity to its customers make Munich Re one of the world’s most sought-after risk partners for businesses, institutions, and private individuals.
This media release contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forward-looking statements or to make them conform to future events or developments.