Marine a major contributor to Munich Re’s reserve releases for 2022

Marine constituted 3% of business in the January reinsurance renewals (total €15.1bn, and dominated by property and casualty).

Munich Re reported €3.4bn IFRS net income, up from €2.9bn the previous year.

The reinsurer reported a 3.2% increase in prices, but a 2.1% decline in volume. In the property-casualty reinsurance portfolio, specialty (aviation, marine and credit) made up 8% of core P-C reinsurance GWP of €24bn (which excludes the Risk Solutions sector, which contributed €10bn). The Risk Solutions sector includes Munich Re Syndicate, which contributed €1.4bn, and MR Specialty Insurance, which contributed €2.5bn.

CEO Joachim Wenning said that “Munich Re absorbed the crises of 2022 well and continues to grow profitably. We are robust, both financially and in terms of capital.

The company said that Munich Re Syndicate experienced strong market conditions and ongoing diversification in specialty lines, which supported its “sustainably strong growth path”.

At €21.2bn, equity was down from the level at the start of the year (€30.94bn), mainly due to a decline in valuation reserves on fixed-interest securities. The latter was attributable to higher interest rates – which Munich Re noted were ultimately economically advantageous for insurers.

Marine contributed €346m of €4.198bn in gross written premiums in 2022 at Munich Re’s primary insurance arm ERGO, compared with €320m of €3.919bn in 2021.

Munich re said that Risk Solutions would be further strengthened by bundling responsibility under Global Specialty Insurance (GSI). Its ambition for 2025 is that GSI will become “a powerful player in specialty insurance worldwide”, with premiums rising to around €10bn.

Munich Re said that its reserve releases, which were positive actual-vs-expected across all lines, were best in marine and credit.

For 2023 the company is targeting an 86% combined ratio in P-C reinsurance and 89% for ERGO property-casualty.