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Munich Re maintains stable dividend and continues to grow

(This is a COVER extract of figures and comments from a Munich Re results release. For the full results, please visit

▪ Munich Re posts a 2020 profit of €1.2bn, despite high COVID-19 losses 

▪ January renewals show premium growth (+10.9%) and rising prices (+2.4%) 

▪ Subject to the approval of the Supervisory Board and of the Annual General Meeting, a stable dividend of €9.80 per share is to be paid 

Summary of figures for the 2020 financial year 

Munich Re generated a profit of €1,211m (2,707m) in 2020, and €212m (217m) in Q4. The 2020 financial year was marked by high losses in connection with COVID-19. In reinsurance, pandemic-related losses totalling €3.4bn were posted, of which €370m was attributable to life and health reinsurance, and slightly over €3bn to property-casualty reinsurance. At ERGO, the negative impact on the result arising from COVID-19 totalled €64m. Adjusted for the above- mentioned losses, the Group would have met its originally envisaged 2020 profit target of €2.8bn, which was retracted in March 2020. 

The operating result fell year on year to €1,986m (3,430m), while the other non-operating result amounted to –€83m (–91m). The currency result totalled –€200m (73m), and the effective tax rate was 18.2% (15.1%). Gross premiums written increased by 6.7% year on year to €54,890m (51,457m). 

Equity was slightly lower at the end of the reporting period (€29,994m) than at the start of 2020 (€30,576m). At the end of the year, the solvency ratio – as usual, after accounting for the proposed dividend – was approx. 208% (31 December 2019: 237%), and was thus within the targeted, optimum range of 175–220%. 

In the 2020 financial year, return on equity (RoE) amounted to 5.3%. 

Reinsurance: Result of €694m 

The reinsurance field of business contributed €694m (2,268m) to the consolidated result in 2020; the Q4 result was €75m (116m). The operating result amounted to €984m (2,613m). Gross premiums written rose to €37,321m (33,807m). 

ERGO: Result of €517m 

Munich Re generated a profit of €517m (440m) in its ERGO field of business in 2020, and €136m (101m) in Q4. This means that ERGO successfully completed its Strategy Programme, nearly meeting its 2020 profit guidance of €530m – the burdens arising from COVID-19 notwithstanding. 

Investments: Investment result of €7,398m 

Munich Re’s investment result (excluding insurance-related investments) decreased to €7,398m (7,822m) in 2020. Regular income from investments fell to €6,273m (6,751m), largely due to lower interest income. The balance of write-ups/write-downs amounted to –€1,957m (–309m), particularly on account of impairment losses on equities triggered by the Q1 plunge in equity markets. In addition, net gains on disposals excluding derivatives increased to €3,698m (2,779m), driven by the sale of fixed-income investments, equities and real estate. The net balance of derivatives amounted to €74m (–717m), with gains on interest-rate derivatives and losses on equity derivatives nearly offsetting each other. 

Outlook 2021: Group targets a consolidated result of €2.8bn 

Munich Re is aiming for a profit of €2.8bn in 2021, as communicated on 1 December 2020. The Group expects the financial consequences from COVID-19 to be on a considerably smaller scale than in 2020. Group premium income is expected to rise to about €55bn in 2021, and return on investment to be above 2.5%, the persistently very low interest rates notwithstanding. 

In its reinsurance field of business, Munich Re anticipates premium income of about €37bn and a profit of about €2.3bn in 2021. 

It is anticipated that the ERGO field of business will contribute about €500m to consolidated profit. 

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