Munich Re $MUV2 (+0,12 %) intends to steadily increase its profits over the next few years despite crumbling prices in reinsurance and pass most of this on to its shareholders.
The world's second-largest reinsurer has set itself the target of a return on equity of more than 18% by 2030, as it announced in Munich on Wednesday. Previously, the target was 14 to 16 percent, but Munich Re had recently exceeded it. According to "Ambition 2030", earnings per share should increase by an average of more than eight percent per year, whereas the previous target was at least five percent. 80 percent of the profit should be distributed to shareholders via dividends and share buybacks. Most recently, Munich Re had passed on around three quarters.
Munich Re intends to make up for the foreseeable crumbling profits in non-life reinsurance over the next few years with growth in the other three lines. Health reinsurance, the primary insurer Ergo and specialty insurance business are expected to contribute around 60 percent to profits in 2030, as the reinsurer announced. The current figure is around 50 percent. The longstanding trend of rising prices for cover against natural disasters and other major losses is currently threatening to reverse.
