Munich Re posted a record quarterly profit of €1.714 billion, yet two of its largest institutional shareholders have headed for the exits. The US asset manager Capital Group has reduced its holding to 2.89%, slipping below the mandatory reporting threshold, while JPMorgan Asset Management trimmed its voting rights to 2.99%. The retreat marks a striking disconnect between the reinsurer’s operational strength and the sentiment among big-money investors.
The Munich-based group is fighting back on multiple fronts. Five members of the management board have bought shares near the stock’s 52-week low of €437.50, including a €200,000 purchase by executive Mari-Lizette Malherbe in May. That show of faith is backed by a €2.25 billion buyback programme, with the first tranche of €900 million running until August 2026. Since mid-May, Munich Re has already scooped up more than 850,000 of its own shares.
The first-quarter numbers that triggered the record profit give the board plenty of ammunition. Net income jumped from €1.094 billion a year earlier, pushing earnings per share to €13.41 from €8.34. The solvency ratio stood at a fortress-like 292%, well above the internal target, and the dividend was lifted to €24.00 per share. Management is sticking to its full-year profit target of €6.3 billion.
But the pricing cycle that underpinned those margins is softening. Broker Howden Re reports that property catastrophe rates fell 15% to 20% in June, and loss-free programmes dropped by a quarter. Munich Re itself has already shown discipline: at the April renewal round, it deliberately walked away from nearly a fifth of premium volume to protect profitability. “Underwriting before growth” has become the mantra.
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Adding another layer of complexity, the risk landscape is shifting. Munich Re’s latest seasonal outlook expects below-average hurricane activity in the North Atlantic due to a developing El Niño, which should normally relieve the claims burden. The flip side is elevated typhoon risk in the northwest Pacific. The damage potential does not disappear—it simply moves to a different geography. The group is adjusting capacity and pricing accordingly.
None of this has stopped the stock from falling sharply. Trading at €459.50, Munich Re’s shares are down roughly 16% since the start of the year and more than 24% below their 52-week high. The stock also sits about 13% under its 200-day moving average. Every data point from the first quarter screams strength, yet the share price keeps scraping near the lows.
The next big test comes in July, when the renewal season provides the clearest read on how far rates have slipped. Concrete answers will follow on 7 August, when Munich Re publishes its half-year report. By then, investors will be looking for confirmation that the €6.3 billion target remains achievable—and whether the gap between record earnings and a battered stock price can finally narrow.
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