If Warren Buffett's Berkshire is already making a lot of money with insurance, it can't hurt me either 😁

My $ORI (-6.47%) I started building up my position in September 2021, until then I had only $ALV (-8.43%) and $AFL (-8%) in the portfolio. In the meantime $TRV (-6.36%) and recently also $AMP (-6.76%)
$BRO (-6.74%) have landed in the Scalable portfolio, in which I also invest in the "Ultimate Homer ETF" Trade Republic Depot via a savings plan, as well as $MUV2 (-6.68%)
$HNR1 (-5.85%)
$PGR (-9.83%)
$ALL (-7.47%)
$AJG (-4.99%)
$TLX (-7.19%)
$8766 (-7.45%) 😁

Which insurance companies are you with?

Old Republic balance sheet

Benchmark

Amazing that with a dividend aristocrat you could keep up well with the ETFs over the last 5 years 💪😁

Benchmark vs competition

At 53 billion euros, the 40 DAX companies are likely to pay out almost one billion euros more this year than a year ago - more than ever before.

The reason for the strong development is high consolidated profits and unexpectedly rising dividends at a good dozen companies, including $ALV (-8.43%) Allianz, $MUV2 (-6.68%) Munich Re and $RHM (-10.98%) Rheinmetall.

At 109 billion euros net profit, the DAX companies are likely to have earned as much in 2024 as in the previous year, according to Handelsblatt calculations. Slump in earnings for the three car manufacturers $BMW (-5.51%) BMW, $MBG (-5.9%) Mercedes and $VOW (-3.61%) VW will be offset by companies in other sectors, in particular the major insurers Allianz, Munich Re and $HNR1 (-5.85%) Hannover Re, but also $DTE (-4.46%) Deutsche Telekom, $HEN (-3.1%) Henkel and $EOAN (-6.15%) Eon.

More than a dozen DAX companies have announced higher dividends than the market had previously expected. For example $ALV (-8.43%) 15.40 euros per share after 13.80 euros in the previous year. Analysts had forecast just under 15 euros. The insurer is thus distributing just under six billion euros. This is a record in the German corporate landscape.

The biggest jump is at $MUV2 (-6.68%) Munich Re: The reinsurer is increasing its dividend by five euros per share to 20 euros.

The two healthcare specialists $FRE (-4.88%) Fresenius and $FME (-6.55%) Fresenius Medical Care, the brand manufacturer $HEN (-3.1%) Henkel, the automotive supplier $BTR Continental, the $CBK (-6.01%) Commerzbank, $RHM (-10.98%) Rheinmetall and $HNR1 (-5.85%) Hannover Re have raised their dividends, in some cases significantly more than expected. This is also due to rising profits, which justify a higher profit share for shareholders.

The largest dividend payers in the DAX are

• $ALV (-8.43%)
• 
  $DTE (-4.46%)
• 
  $MBG (-5.9%)
• 
  $SIE (-7.45%)
• 
  $VOW (-3.61%)

Like the car manufacturers, a number of companies in the DAX remain below the usual international payout ratios, including the family-run groups $BEI (-0.89%) Beiersdorf and $MRK (-5.28%) Merck. They pass on less than 30 percent of their profits. This leaves enough of a buffer so that dividends do not have to be reduced immediately in more difficult times.

Germany's most valuable group, $SAP (-5.31%) SAP, with a payout ratio of 85%, is pushing the limit: net profit of 3.1 billion euros in the past year compares with a total dividend payout of 2.7 billion euros. However, the profit was burdened by a one-off effect.

So far, a total of 20 companies have increased their dividends, with only $BAS (-5%) BASF and the three car manufacturers. Four companies have yet to do so: $RWE (-6.04%) RWE, $SY1 (+0.31%) Symrise and $VNA (-2.32%) Vonovia are likely to increase their dividends, while analysts expect $PAH3 (-3.65%) analysts expect a reduction at Porsche Holding.

Source (excerpt) & chart: Handelsblatt, 15.03.25

The DAX-listed Hannover Re Group $HNR1 (-5.85%) increases its dividend by 25% from €7.20 to €9

Ex-date: 08.05.25

Pay day: 12.05.25

The $IWDA (-5.63%) is now back below its value at the beginning of the year, which is probably due to Trump's announcements on punitive tariffs.

As I have a low US weighting in my portfolio, the return is much better. For the time being, the assumption that the US economy will develop rather negatively in the coming years and that international investor confidence will also decline seems to be confirmed. Europe and Canada are now working together more closely than ever before and I believe it is likely that new trade agreements beyond CETA will be concluded. These could, for example, be agreements on the supply of raw materials or weapons, which would then benefit both partners without using the USA as a mediator (as is currently the case). Public concerns about the potential threat of war are growing, which is of course particularly good for insurance companies and the arms industry. The greater the fear in society, the greater the need to insure against this fear, for example through term life, building protection, household contents or legal expenses insurance. Primary insurers such as Allianz ( $ALV (-8.43%) ) and reinsurers such as Hannover Re ( $HNR1 (-5.85%) ) and Munich Re ($MUV2 (-6.68%) ). I do not $MUV2 (-6.68%) is not in my portfolio because I don't want to overdiversify and therefore only hold Hannover Re, which has a more stable historical performance.

If there is a fear of war, people also want to protect themselves physically, which is why they are more willing to spend a larger proportion of their economic output on defense.

All of this would benefit my portfolio. With Thales ( $HO (-7.85%) ) I am up 75% since the beginning of the year. Safran ($SAF (-7.4%) ) has also gained 25%. However, I am more convinced by Thales, as they offer cyber security products/solutions in addition to military machines. We still have a lot of demand in this area and new security concepts have to be developed all the time as the old ones can suddenly be circumvented at some point. The products are therefore never fully developed, which is why innovation is always possible, enabling higher prices due to higher quality.

So my conclusion is this: I am currently cautious about US equities. The insurance and defense sector will benefit regardless of whether war actually breaks out or not and I therefore expect returns above the market average.

Munich Re $MUV2 (-6.68%) is one of the world's leading reinsurers and a real player in the insurance sector.

In this article, I take a look at the results published this morning for the year 2024 and the past Q4.

The main source is the report "MunichRe balance sheet media release" [1], as well as the published figures from the "Financial Supplement" [2].

Munich Re is currently the smallest single position in my portfolio, with a share of 2.22% according to Deepdive.

Munich Re had a strong year in 2024 [2]:

• Group result: €5.67 billion (+23.4% compared with the previous year)
• Earnings per share: €42.78 (+26.3%)
• Return on equity (RoE*): 18.2% (previous year: 15.8%)

*Return on equity measures the profitability of equity and shows how efficiently Munich Re generates profits with the equity it has invested. The result of 18.2% shows an improvement in profitability, which points to higher profits despite challenging conditions.

Q4 was also solid, albeit with minor setbacks [2]:

✅ Q4 operating result: €1.67 billion (+38.6% on estimate)

✅ Earnings per share: € 7.54 (+20.2% on estimate)

📊 Q4 consolidated net income: € 979 million (-2.5% compared to Q4 2023)

• Q4 reinsurance result: € 887 million (- 4.3%)
• Q4 ERGO result: € 92 million (+ 17.9%)

-> more on the classification of the decline in the Q4 reinsurance result in a moment...

Dividend and share buy-backs

• The Executive Board proposes to increase the dividend for the 2024 financial year to 20 € per share. This corresponds to an increase of 33 % compared to the previous year (€ 15 per share). The final decision lies with the Annual General Meeting.
• Munich Re is also planning a share buy-back in the amount of €2 billion This underlines the company's financial strength and the return of capital to shareholders.

What's behind these figures? Let's take a look at the business segments! [1,2]

• Munich Re is divided into two main business segments: Reinsurance and ERGO.

++ Reinsurance: The heart of Munich Re ++

Reinsurance means that Munich Re acts as an "insurance company for insurance companies". Companies such as Allianz or AXA insure themselves here against extreme losses, for example.

2024 for the sub-sector:

• 💰 Turnover: € 40.03 billion (+5.9%)
• 📈 Earnings: € 4.88 billion (+25.9%)
• 🏥 Life/Health: € 1.68 billion (+17.7%)
• 🚗 Property/casualty: € 3.2 billion (+30.7%)

Despite natural disasters, business was strong, particularly in the property/casualty segment.

++ ERGO: The insurance business for end customers ++

ERGO is the part of Munich Re that offers traditional insurance for private individuals and companies (e.g. motor, health and life insurance).

2024 for the sub-segment

• 💰 Turnover: € 20.8 billion (+3.5%)
• 📉 Result: € 791 million (+9.7%)
• 🏥 Life/Health: € 230 million (+25.9%)
• 🚗 Property/casualty: € 260 million (+3.0%)
• 🌍 International: € 301 million (+5.4%)

Classification & reasons for slight decline in reinsurance Q4 [1]

1 . Higher burdens due to major losses:

• There were a number of natural disasters in Q4 that led to higher claims burdens. In particular Hurricane Milton caused losses amounting to € 0.4 billion. These burdens depressed the result compared to the same quarter of the previous year.

2 . Decline in investment income:

• Net investment income amounted to € 555 million in Q4, which represents a significant decline compared to the same quarter of the previous year (€ 835 million). This decline is primarily due to the disposal of fixed-interest bonds, which were deliberately realized in order to benefit from higher interest rates.

3 . Increase in the tax rate:

• The tax rate rose to 26.9% in 2024 (2023: 16.9%). This increase is partly due to higher tax burdens in certain regions and additionally depressed the net result in Q4

4 . Operational challenges in individual segments:

• Reinsurance Life/ Health there was a decline in the result to €185 million in Q4 (Q4 2023: €461 million) This was mainly due to higher claims burdens and lower operating efficiency.
• In the ERGO Life/Health segment, there was also a sharp decline in the result to €3 million (Q4 2023: €18 million), which was primarily caused by higher claims burdens in the health & travel business.

Major claims and their impact

In 2024, there were several notable major claims that impacted Munich Re:

• Hurricane Helene: The hurricane caused severe devastation in the south-east of the USA and was worth 0.5 billion the most expensive single loss of the year.

• Hurricane Milton: This hurricane caused damage amounting to 0.4 billion in the fourth quarter.

• Natural catastrophes: Overall, losses from natural catastrophes amounted to 2.6 billionwhich was slightly above expectations.

• LA fires: The devastating fires in Los Angeles in January 2025 are expected to represent the highest wildfire loss in the history of the insurance industry. Munich Re anticipates a burden of 1.2 billion, although the estimate is still subject to uncertainty due to the complexity of the loss pattern.

Rising premiums are the logical consequence

Munich Re is adapting with rising prices and better risk models, but natural catastrophes remain a major risk.

🔮Outlook for 2025

Munich Re is optimistic about the year 2025 and is aiming for a consolidated result of 6 billion to be achieved. Insurance sales are expected to increase to 64 billion and the return on investment is expected to exceed 3,0 % is expected. Further growth is expected in the reinsurance business, while ERGO should continue its strong development.

💡Conclusion

Munich Re delivered another impressive performance in 2024 and exceeded its targets. With a record dividend, planned share buy-backs and an optimistic outlook for 2025, the company underlines its financial strength and its ability to operate successfully and profitably even in a challenging environment. It has coped well with the impact of major losses and the diversification of its business areas continues to offer stability.

For me, Munich Re remains an attractive option in the insurance sector and will continue to be held and possibly increased to a maximum of 4% of the portfolio by the end of the year, as Munich Re remains an insurance giant with growth potential.

💬 What do you think?

THANKS FOR READING 🤝

__________

Sources:

[1] https://www.munichre.com/content/dam/munichre/mrwebsiteslaunches/2024-financial-statements/MunichRe-Bilanz-Media-Release-2025-02-26_de.pdf/_jcr_content/renditions/original./MunichRe-Bilanz-Media-Release-2025-02-26_de.pdf

[2] https://www.munichre.com/content/dam/munichre/mrwebsiteslaunches/2024-financial-statements/MunichRe-Financial-Supplement-Q4-2024_de.xlsx/_jcr_content/renditions/original./MunichRe-Financial-Supplement-Q4-2024_de.xlsx

__________

$MUV2 (-6.68%)
$HNR1 (-5.85%)
$ALV (-8.43%)

⬆️⬆️⬆️

- EXANE BNP raises the price target for ALLIANZ SE from EUR 271 to EUR 295. Underperform. $ALV (-8.43%)

- BARCLAYS raises the target price for AIRBUS from EUR 166 to EUR 200. Overweight. $AIR (-8.31%)

- UBS raises its price target for SAP from EUR 237 to EUR 283. Buy. $SAP (-5.31%)

- BERENBERG raises the price target for LVMH from EUR 695 to EUR 720. Buy. $MC (-4.14%)

- EXANE BNP raises the target price for MUNICH RE from EUR 550 to EUR 560. Outperform. $MUV2 (-6.68%)

- RBC raises the target price for SIEMENS from EUR 205 to EUR 225. Outperform. $SIE (-7.45%)

- CITIGROUP raises the price target for STELLANTIS from EUR 12.40 to EUR 13. Neutral. $STLA

- KEPLER CHEUVREUX raises the target price for DOUGLAS from 28.60 EUR to 29.90 EUR. Buy. $DOU (-3.38%)

- CITIGROUP raises the target price for DWS from EUR 43 to EUR 44.70. Buy. $DWS (-10.75%)

- CITIGROUP raises the price target for FRAPORT from EUR 62 to EUR 72. Buy. $FRA (-2.89%)

- UBS upgrades AMADEUS IT from Neutral to Buy and raises target price from EUR 67 to EUR 80. $AMS (-7.46%)

- DEUTSCHE BANK RESEARCH raises target price for PHILIPS from EUR 25 to EUR 26. Hold. $PHIA (-7.48%)

- DEUTSCHE BANK RESEARCH raises the target price for MAN GROUP from GBP 2.65 to GBP 2.75. Buy.

- GOLDMAN raises the target price for RIO TINTO from GBP 67 to GBP 73. Buy. $RIO (-6.32%)

- JEFFERIES raises the price target for SIEMENS ENERGY from EUR 31 to EUR 50. Hold. $ENR (-9.65%)

- RBC raises the target price for SCHNEIDER ELECTRIC from EUR 195 to EUR 210. $SU (-8.15%) Underperform.

- EXANE BNP upgrades HANNOVER RÜCK from Neutral to Outperform and raises target price from EUR 265 to EUR 285. $HNR1 (-5.85%)

⬇️⬇️⬇️

- DEUTSCHE BANK RESEARCH lowers the price target for NOVO NORDISK from DKK 1000 to DKK 900. Buy. $NOVO B (-6.66%)

- BOFA lowers the target price for RWE from EUR 44 to EUR 42. Buy. $RWE (-6.04%)

- JPMORGAN lowers the price target for NETFLIX from USD 1010 to USD 1000. Overweight. $NFLX (-5.74%)

- MORGAN STANLEY lowers the price target for SYMRISE from EUR 137 to EUR 130. Overweight. $SY1 (+0.31%)

- KEPLER CHEUVREUX lowers the target price for REDCARE PHARMACY from EUR 145 to EUR 138. Hold. $RDC (-2.11%)

- WARBURG RESEARCH lowers the target price for BECHTLE from EUR 51 to EUR 45. Buy. $BC8 (-4.33%)

- STIFEL downgrades WACKER CHEMIE from Buy to Hold. $WCH (-7.57%)

- RBC lowers the price target for DAIMLER TRUCK from EUR 55 to EUR 51. Outperform. $DTG (-5.57%)

$HNR1 (-5.85%)

Are you betting on Hannover Re or Munich Re?

Analsyst updates, 06.12.

⬆️⬆️⬆️

• BERNSTEIN raises the price target for SIEMENS from EUR 220 to EUR 227. Outperform. $SIE (-7.45%)
• JPMORGAN raises the target price for SIEMENS ENERGY from EUR 38.70 to EUR 44. Neutral. $ENR (-9.65%)
• JEFFERIES upgrades BMW from Hold to Buy and raises target price from EUR 80 to EUR 85. $BMW (-5.51%)
• ODDO BHF raises the price target for AURUBIS from EUR 70 to EUR 76. Neutral. $NDA (-6.49%)
• UBS raises target price for AUTO1 from EUR 9.80 to EUR 20.50. Buy. $AG1 (-14.21%)
• UBS raises the target price for NORDEA from SEK 144 to SEK 145. Buy. $NDA FI (-10.27%)
• DEUTSCHE BANK RESEARCH raises the price target for FREENET from EUR 34 to EUR 36. Buy. $FNTN (-5.99%)
• DEUTSCHE BANK RESEARCH raises the target price for DS SMITH from GBP 4 to GBP 5.80. Hold. $SMDS
• JPMORGAN raises the price target for THYSSENKRUPP from EUR 3.80 to EUR 4.10. Neutral. $TKA (-15.03%)
• JPMORGAN raises the target price for SALZGITTER from EUR 11.50 to EUR 14.10. Underweight. $SZG (-7.05%)
• JPMORGAN raises the price target for SCHNEIDER ELECTRIC from EUR 270 to EUR 275. Overweight. $SU (-8.15%)
• JPMORGAN raises the price target for KNORR-BREMSE from EUR 88 to EUR 92. Overweight. $KBX (-8.01%)
• MORGAN STANLEY upgrades HANNOVER RÜCK to Overweight. Target price EUR 292. $HNR1 (-5.85%)
• JPMORGAN raises the target price for COMMERZBANK from EUR 18.40 to EUR 19.50. Overweight. $CBK (-6.01%)

⬇️⬇️⬇️

• GOLDMAN lowers the price target for LVMH from EUR 770 to EUR 720. Buy. $MC (-4.14%)
• MORGAN STANLEY downgrades MUNICH RE to Equal-Weight. Target price 523 EUR. $MUV2 (-6.68%)
• JEFFERIES downgrades MERCEDES-BENZ from Buy to Hold and lowers target price from EUR 73 to EUR 60. $MBG (-5.9%)
• ODDO BHF lowers the price target for DELIVERY HERO from EUR 43 to EUR 38. Neutral. $DHER (-3.15%)
• WARBURG RESEARCH lowers the price target for COMPUGROUP from EUR 31 to EUR 24.50. Buy. $COP (-1.79%)
• JPMORGAN lowers the price target for VESTAS from DKK 143 to DKK 123. Neutral. $VWS (-10.01%)
• JPMORGAN lowers the price target for KION from EUR 44 to EUR 43. Overweight. $KGX (-13.09%)
• MORGAN STANLEY downgrades ORSTED to Equal-Weight. Target price DKK 480. $ORSTED (-7.25%)

Dax dividends fall

In 2025, the 40 DAX companies will be paying out seven percent less than last year, according to a forecast by Handelsblatt. Car manufacturer shareholders will be hit particularly hard.

Many DAX shareholders will have to adjust to lower dividends for the current financial year: According to a forecast by Handelsblatt, the 40 Dax-listed companies will pay out a combined €48.5 billion next spring. That would be seven percent less than in the previous year.

At the same time, 22 companies are likely to further increase their payouts and eight will reduce their dividends. But overall, there will be a decline for the first time since the outbreak of the pandemic. This is mainly due to the car manufacturers, where the dividend total is likely to fall by almost 35% to around ten billion euros. This is due to falling profits at VW $VOW (-3.61%) , BMW $BMW (-5.51%) and Mercedes $MBG (-5.9%) due to poor sales figures in Europe and especially in the former boom country China.

In contrast, the sporting goods manufacturer Adidas $ADS (-0.23%) , the Deutsche Telekom
$DTE (-4.46%) and the arms manufacturer Rheinmetall $RHM (-10.98%) are increasing their dividends particularly sharply. This also applies to Deutsche Bank
$DBK (-10%) and Commerzbank $CBK (-6.01%) and the insurers Allianz $ALV (-8.43%) , Munich Re
$MUV2 (-6.68%) and Hannover Re
$HNR1 (-5.85%) . The healthcare group Fresenius $FRE (-4.88%) has not distributed anything for 2023, but is now planning a dividend again.

Commerzbank analyst Andreas Hürkamp sees a rotation: "In 2011, the automotive sector replaced utilities as the sector with the highest dividends. Now it is becoming apparent that after 14 years, insurers will be the new number one dividend payers in the DAX."

Handelsblatt

Analyst updates, 05.12.

⬆️⬆️⬆️

• HSBC upgrades SIEMENS to Hold. Target price EUR 185. $SIE (-7.45%)
• DEUTSCHE BANK RESEARCH raises the price target for MUNICH RE from EUR 450 to EUR 535. Hold. $MUV2 (-6.68%)
• DEUTSCHE BANK RESEARCH raises the price target for HANNOVER RÜCK from EUR 255 to EUR 294. Buy. $HNR1 (-5.85%)
• DEUTSCHE BANK RESEARCH raises the price target for TALANX from EUR 70 to EUR 76. Hold. $TLX (-7.19%)
• JEFFERIES raises the price target for ORACLE from 190 USD to 220 USD. Buy. $ORCL (-5.9%)
• HAUCK AUFHÄUSER IB raises the target price for MTU from EUR 264 to EUR 280. Sell. $MTX (-9.58%)
• BARCLAYS upgrades AUTO1 from Equal-Weight to Overweight and raises target price from EUR 9 to EUR 19. $AG1 (-14.21%)
• JPMORGAN raises the price target for HELLOFRESH from EUR 14 to EUR 16. Overweight. $HFG (-6.83%)
• JPMORGAN raises the target price for DELIVERY HERO from EUR 42 to EUR 55. Overweight. $DHER (-3.15%)
• JPMORGAN raises the price target for CTS EVENTIM from EUR 104 to EUR 112. Overweight. $EVD (-2.57%)
• JPMORGAN raises the target price for SCOUT24 from EUR 92 to EUR 105. Overweight. $G24 (-5.81%)
• JPMORGAN raises the target price for JUST EAT TAKEAWAY from GBP 16.02 to GBP 18.32. Overweight. $TKWY (-1.68%)
• JPMORGAN upgrades DELIVEROO from Neutral to Overweight and raises target price from GBP 1.70 to GBP 1.92. $ROO (-2.79%)
• JPMORGAN raises the price target for HEIDELBERG MATERIALS from EUR 150 to EUR 151. Overweight. $HEI (-6.75%)
• JPMORGAN raises the price target for FRAPORT from EUR 49 to EUR 59. Neutral. $FRA (-2.89%)

⬇️⬇️⬇️

• METZLER lowers the price target for HYPOPORT from EUR 220 to EUR 185. Sell. $HYQ (-7.49%)
• ODDO BHF lowers the target price for SCHOTT PHARMA from EUR 38 to EUR 37. Outperform. $1SXP (-6.44%)
• BARCLAYS lowers the target price for RIO TINTO from GBP 61 to GBP 60. Overweight. $RIO (-6.32%)
• JPMORGAN downgrades STRÖER from Overweight to Neutral and lowers target price from EUR 79 to EUR 57. $SAX (-7.66%)