Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (ETR:MUV2) reported a net result of EUR 1.7 billion for the first quarter of 2026, with management pointing to strong operating performance across business segments and low major losses, partly offset by weaker investment and currency results.
Andrew Buchanan, chief financial officer of Munich Re, said on the company’s quarterly earnings call that the group had made “a strong start to the year” despite “elevated geopolitical and macroeconomic uncertainty.” He said the direct impact of the conflict in the Middle East on underwriting results remained “very manageable,” while volatility in capital markets weighed on the investment portfolio.
Investment result pressured by market volatility
Munich Re generated a return on investment of 2.9% in the quarter, below its full-year guidance. Buchanan said rising oil and gas prices renewed inflation concerns and contributed to volatility in bond and equity markets. The company recorded negative fair value changes in fixed income and equity portfolios, though those were “largely offset” by positive revaluations in alternative investments and commodities.
The company used higher bond yields to reinvest at more attractive levels, lifting its reinvestment yield to 4.2%. Buchanan said the running yield was slightly below expectations and broadly flat versus the first quarter of 2025, reflecting lower-than-usual private equity distributions and accounting effects related to inflation-linked bonds. He said Munich Re expects a catch-up effect in the second quarter tied to recent consumer price inflation developments, with support also expected from higher reinvestment yields and the dividend season.
Reinsurance performance helped by low major losses
In Life & Health Reinsurance, Munich Re reported a total technical result of EUR 500 million, slightly above the pro rata annual ambition. Buchanan described the quarter as “relatively quiet,” with mortality experience slightly positive and the result from insurance-related financial instruments supported by large transactions completed in the second half of last year.
Property and casualty reinsurance posted a combined ratio of 66.8%, reflecting very low major losses. Reserve releases contributed the expected 6 percentage points to the combined ratio, while the discounting effect was approximately 9.5%, above guidance of around 9%, primarily due to higher interest rates.
The normalized combined ratio was 80.3%, which Buchanan said was aligned with full-year guidance of around 80. However, he acknowledged some upward pressure from the January and April renewals and a higher expected level of major losses. Munich Re raised its major-loss expectation by 1 percentage point to 18%, comprising about 14.5% for natural catastrophes and 3.5% for man-made losses.
In response to an analyst question, Buchanan said the higher large-loss budget was partly a mechanical result of lower prices on natural catastrophe-exposed business, since the expected loss ratio rises when premium per unit of exposure falls. He said terms and conditions had remained “largely unchanged” and that the increase was “not really” tied to looser contract language.
April renewals reflect competitive pricing environment
Buchanan said the April renewals produced a “good outcome” despite a highly competitive market. Munich Re actively reduced renewed treaty volume by 18.5%, particularly in casualty proportional business and property excess-of-loss business, where returns did not meet requirements. He noted that the decline related to a relatively small book renewed in April.
Pricing remained the main area of competition, especially in natural catastrophe business, which represented more than 30% of renewal volume in April. Munich Re reported a risk-adjusted price decline of 3.1% for the April-renewed portfolio. Buchanan said the margins on retained business remained “healthy overall” due to strong starting levels.
Asked about the July renewals, Buchanan said April was only an approximate indicator because the July book differs by geography, clients and business mix. He said strong supply remains available in the reinsurance market, but cautioned that the April volume outcome was influenced by a limited number of client negotiations in a relatively small renewal book.
ERGO contributes EUR 235 million
Munich Re’s primary insurance business, ERGO, delivered a net result of EUR 235 million in the quarter, which management described as a promising start toward its 2026 net profit target of EUR 0.9 billion.
ERGO Germany reported a segment result of EUR 157 million. Technical performance improved in life and health, helped by short-term health and travel business, profitable growth, and favorable claims and cost development. In German property and casualty insurance, ERGO posted a combined ratio of 86.7%, better than full-year guidance, supported by low major losses and sound operating performance.
ERGO International recorded a net result of EUR 78 million. Buchanan said operating development was good but partly offset by a lower contribution from joint ventures versus an “exceptionally strong” prior-year quarter. Life and health profitability in ERGO International was below expectations due mainly to a one-off effect from a portfolio sale in the Belgian life business. Property and casualty posted a combined ratio of 89.5%, broadly in line with full-year guidance, despite winter weather-related claims in Poland and the Baltics.
Buchanan also said ERGO Next Insurance, Munich Re’s recent U.S. acquisition, was developing according to plan.
Guidance maintained, revenue target more challenging
Munich Re left its 2026 outlook unchanged, continuing to expect a net result of EUR 6.3 billion. The company also maintained its reinsurance revenue guidance of EUR 40 billion, though Buchanan said reaching that figure has “certainly become more challenging” than when the outlook was set five months earlier.
He cited negative premium adjustments in the first quarter that Munich Re does not expect to recur, as well as a healthy pipeline of large transactions, particularly in life and health reinsurance. Buchanan said financial reinsurance-related results in the first quarter were broadly representative of a typical quarterly run rate, supported by transactions closed in the second half of 2025.
Munich Re’s Solvency II ratio declined to 292%, reflecting the full deduction of the new share buyback program, partly offset by operating performance and economic earnings. Buchanan said the group’s economic position remains “very strong” and reiterated that Munich Re’s capital return approach remains tied to profitable deployment opportunities, with decisions on share buybacks made annually.
About Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (ETR:MUV2)
Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München engages in the insurance and reinsurance businesses worldwide. It also offers life and health reinsurance solutions, such as digital underwriting and advanced analytics solutions, health insurance management system, financial market risks, financing, portfolio risk management, digitalized investment-linked solution, MIRA digital suite, MIRA POS, MIRApply insured and physician, claims risk adjustment, CLARA plus, data analytics, underwriting and claims, medical research, capital management, and health market.
