Munich Re stock rises as company cheers investors with latest earnings

The sun sets behind the skyline as clouds drift by in Frankfurt, Germany, Tuesday, Nov. 7, 2023
The sun sets behind the skyline as clouds drift by in Frankfurt, Germany, Tuesday, Nov. 7, 2023 Copyright Michael Probst/Copyright 2023 The AP. All rights reserved
Copyright Michael Probst/Copyright 2023 The AP. All rights reserved
By Indrabati Lahiri
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A stronger operational performance and less major-loss expenses than previously thought contributed to Munich Re's latest financial results.


Shares in German reinsurance giant Munich Re rose on Wednesday after the company announced its first-quarter (Q1) 2024 results, clocking in a net profit of €2.14 billion, which was almost a 70% jump from the €1.2 billion seen in Q1 2023. 

This was mainly due to major-loss expenditure being less than anticipated, as well as a robust operational performance across the board - and investments yielding high returns.

Insurance revenue from insurance contracts also increased to €15.1 billion in Q1 2024 from €14.2 billion in the first quarter of 2023. This was mainly due to the reinsurance sector seeing significant internal growth.

The company saw a technical result of about €2.7 billion in the first quarter of 2024, a significant increase from the €1.8 billion seen in Q1 2023. The operating result was also optimistic, coming in at €2.9 billion, up from Q1 2023’s €1.7 billion.

The company’s solvency ratio also surged to 273%, up from the 267% seen on 31 December 2023. This was well above the target range of 175% to 220%. Munich Re has also announced a share buy-back worth about €1.5 billion.

As of 31 March 2024, the company’s equity came up to about €31.2 billion, which was a tad higher than the €29.7 billion seen on 1 January this year.

The company’s shares as of Wednesday afternoon were trading at €43, an increase of 2.38% on the day.

Christoph Jurecka, the chief financial officer (CFO) of Munich Re said in a press statement, “Munich Re kicked off the new financial year with great momentum. Our Q1 net result this year is nearly 70% higher than in 2023. Every line of business played a role in this impressive performance.

“In addition, we got a boost from the treaty renewals on 1 April, where we tapped into attractive growth opportunities against a backdrop of continuing high rates. We still expect to generate a profit of €5 billion in 2024. In fact, it has become more likely that we will surpass that target.”

Munich Re invests in geothermal energy startup

Munich Re has recently also recently announced that it was investing in Zanskar, a geothermal energy start-up which delves deeper into AI-led exploration technology. The reinsurance company joins the ranks of other investors such as Lowercarbon Capital, First Star Ventures, Safar Partners and Union Square Ventures and Obvious Ventures.

Regarding Obvious Ventures coming on board, Carl Hoiland, CEO and co-founder of Zanskar said, as reported by Coverager, “We are ready for this next phase of growth and are excited to bring Obvious onto the team. We want to make geothermal the cheapest and most widely deployed firm renewable on the planet.

“Since our Series A, we beat industry discovery records and developed new tools to unlock a deep pipeline of new geothermal resources needed in our energy transition.”

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