Munich Re Eyes Another Record Year as Dividend and Buybacks Rise

Munich Re is aiming to top last years record results, confident that the momentum from 2025 can be carried into 2026. At a results briefing in Frankfurt on 26 February, the worlds largest reinsurer said its consolidated IFRS profit for 2025 rose to €6.1 billion, 5.7% above the 2024 figure and €0.1 billion higher than the companys own forecast. CEO Christoph Jurecka stressed that the group fulfilled all promises set out under its fiveyear Ambition 2025 strategy. The company highlighted four core targets from that programme: an equity return, earnings per share growth, dividend growth and a Solvency II ratio. For 2025 Munich Re exceeded those targets substantially reporting an 18.3% return on equity (above the 1416% target), earningspershare growth of 18.8% (versus a target of >5%), dividend growth of 19.6% (above the >5% goal) and a Solvency II ratio of 298% (well above the 175220 band). Shareholders will see the benefits: Munich Re raised its 2025 dividend to €24 per share (from €20) and expanded the share buyback programme, increasing the authorisation through April 2027 to €2.25 billion. For 2026 the group targets an IFRS consolidated result of €6.3 billion and aims to lift investment returns to more than 3.5% (from 3.2%). Within reinsurance, Munich Re is projecting a segment result of €5.4 billion for 2026 (from €5.2 billion in 2025). The propertycasualty reinsurance loss ratio is expected to remain broadly steady, with a combined ratio in the damage/accident reinsurance business around 80% (normalized 80.1%). Life and health reinsurance is targeted to deliver an underwriting result of about €1.9 billion, recovering from €1.72 billion in 2025. Munich Res CFO, Andrew Buchanan, attributed a weaker segment result in part to a softer investment result last year. In primary insurance via the Ergo unit, the group expects to repeat an operating result close to €0.9 billion, with combined ratios in both German and international businesses targeted at roughly 89% roughly the same level seen in 2025. Ergo Germany did face a marked decline in its segment result to €376 million in 2025 from €509 million a year earlier, but management said much of that hit reflected a oneoff effect related to a domestic corporate tax change set to take effect from 2028. Munich Re also reported improvements in its investment business. Net investment income increased to €7.5 billion in 2025 (from €7.2 billion), with recurring investment yields of €8.56 billion (versus €8.14 billion). Impairments fell, and the net balance from gains and losses on disposals improved, although disposals still produced a net negative balance last year. The group continues to sell lowyielding bonds and reinvest receipts into securities that reflect current, higher market yields. The company said it will expand alternative investments, including private credit, equities and infrastructure. The equity allocation (including equity derivatives) rose slightly to 3.1% of the investment portfolio by yearend 2025, up from 2.9% a year earlier. The book value of the investment portfolio stood at €222.7 billion at the end of 2025 (down from €230.7 billion). On sustainability, Jurecka expressed clear satisfaction with progress on greenhouse gas reductions. Munich Re reported a 59% reduction in emissions associated with listed equities, corporate bonds and directly held real estate by the end of 2025 well ahead of its 2529% target. Taken together, the results show Munich Re pursuing a balanced approach: offsetting pressure on parts of its reinsurance portfolio with strength in alternatives, improved investment income and continued capital returns to shareholders. Managements 2026 targets are modestly ambitious but consistent with the strategy that drove last years record. If Munich Re can sustain higher investment yields and keep combined ratios stable in key insurance segments, another record year is a realistic prospect.