New jump in profits in sight: Munich Re: Golden balance sheets in times of crisis

Despite the devastating fires in California and the associated costs, the world’s largest reinsurer Munich Re expects golden results. CEO Joachim Wenning reiterated the goal set in December of a net profit of six billion euros this year, although, according to the manager, the natural disaster in the USA also meant major damage for the Munich-based company.

“Don’t throw us off track”

The group mainly insures other insurance companies – hence the term reinsurer. Since several US insurers are customers, the financial impact of the fire disaster also affects the people of Munich. “But it certainly remains well below the provisions we always have for natural catastrophes,” said Thomas Blunck, the board member responsible for reinsurance. “So it doesn’t throw us off track at all.”

In the USA, the total insured losses for the industry are estimated at 20 to 30 billion euros. According to Blunck and Wenning, it is not yet clear how much of this will affect Munich Re – especially because the fires have not yet been put out.

Expect a sensational jump in profits

2024 was already a record year for Munich Re, as Wenning emphasized, without naming a number. The DAX group’s goal for last year was a profit of more than five billion euros. “And it will be fine,” said the CEO. Compared to the 2024 target, the group result of six billion euros targeted for this year corresponds to a jump in profits of 20 percent. The insurance industry has so far been largely spared from the poor global economy.

Natural disasters in the USA are the deciding factor

Whether Munich Re achieves its profit targets has always depended heavily on the forces of nature in the USA. North America is the region of the world where hurricanes, tornadoes, common storms, fires and other natural disasters regularly cause much greater damage than in other parts of the world.