Further increased my CH values. Soon the $JFN (+2,1%) will be added!

In addition, today $SREN (+0,33%) bought today.

I have decided to sell my $KER (+3,75%) -shares. The position has been clearly in the red for some time and I am no longer convinced by the fundamental development. The problems at Gucci in particular are weighing on the outlook and make $KER (+3,75%) currently more of a risky turnaround bet. Instead of tying up capital in an unclear recovery, I would like to deploy it more efficiently. My focus is now on stocks with more stable fundamentals and better prospects: value and dividend stocks such as $ALV (-0,22%) or $ZURN (-0,13%) as well as growth stocks in areas such as cloud, cybersecurity or AI, such as $CRWD (-1,46%) . A global ETF such as $VWRL (+0,15%) remains interesting for broad hedging.

👉 What would you invest the freed-up capital in?

I topped up my CH stocks today! Do you have Zurich Insurance $ZURN (-0,13%) in your portfolio?

$LMND (+1,66%)

• over 90% in the last 3 months
• just under 50% in the last month

Short quota just under 30% 🫣

The market is slowly recognizing the potential, momentum continues

Currently, 98% of all onboarding and 55% of all claims processing is handled by native AI agents without human interaction

This means that scaling is possible without an increase in personnel.

This means an increase in efficiency and operational leverage.

AI-centric design also reduces costs.

The majority of costs in the insurance industry arise from claims settlement.

This is because humans used to be heavily involved in this.

As $LMND (+1,66%) now handling this with the help of AI, their loss ratio is also falling.

Lower costs lead to lower prices.

Some of these cost savings are passed on to customers in the form of lower prices.

Currently, prices are on average 68% lower than those of the competition.

This creates a positive feedback cycle:

- Operating leverage reduces costs.

- Reduced costs increase efficiency.

- This allows $LMND (+1,66%) charge lower prices.

- Lower prices attract more customers.

- Larger scale increases operating leverage again.

A cycle of growth 🚀

$ALV (-0,22%)
$MUV2 (-0,31%)
$ALL (-0,29%)
$PGR (+0,77%)
$BRO (+1,47%)
$ZURN (-0,13%)
$CS (-1,04%)
$BRK.B (+0,45%)

$LMND (+1,66%)

One of the most impressive key figures when you have growth of 80 % (800,000 customers)

while operating costs continue to fall.

This shows very nicely how AI and automation can have an impact on a company/business model that has been built and trained from the ground up with artificial intelligence.

There are hardly any other companies where the number of employees remains almost the same or the number of employees is likely to have decreased between 2022 and 2025, but the company continues to grow strongly.

Employees 2022: approx. 1367

Employees 2025 approx. 1235

(According to my internet research)

$PGR (+0,77%)
$BRO (+1,47%)
$ALV (-0,22%)
$MUV2 (-0,31%)
$ALL (-0,29%)
$UNH (+1,63%)
$HNR1 (-0,46%)
$BRK.B (+0,45%)
$ZURN (-0,13%)
$CS (-1,04%)

$LMND (+1,66%)

• Revenue: $164.1M (Est. $161.4M) ✅; UP +46% YoY
• EPS: -$0.60 (Est. -$0.80) ✅
• In-Force Premium: $840M; UP +22% YoY

Customer & Premium Metrics

• Premium per Customer: $394; UP +11% YoY
• Total Customers: 2.1M; UP +10% YoY
• Policies in Force: 2.13M
• Annual Dollar Retention (ADR): 87%

Other Q2 Metrics:

• Gross Profit: $41.3M; UP +91% YoY
• Adj EBITDA: -$30.4M
• Net Loss: $41.6M
• Gross Loss Ratio: 77% (vs. 94% YoY)
• Cash & Investments: $888M
• Net Cash Used in Operating Activities: -$29.8M

CEO comment:

🟡 "We achieved record sales and margin improvements. This is the strongest second quarter in Lemonade's history."

🟡 "We are on track to achieve our target of adjusted EBITDA profitability by mid-2026."

$BRO (+1,47%)
$BRK.B (+0,45%)
$BRK.A (+0,47%)
$PGR (+0,77%)
$ALV (-0,22%)
$MUV2 (-0,31%)
$CS (-1,04%)
$HNR1 (-0,46%)
$UNH (+1,63%)
$ALL (-0,29%)
$601318
$CB (+0,84%)
$ZURN (-0,13%)
$TLX (-1,03%)
$HSX (+0,95%)

It was only recently that I decided to say goodbye to my individual shares $ALV (-0,22%)
$MUV2 (-0,31%)
$SREN (+0,33%)
$CS (-1,04%) and $ZURN (-0,13%) and to invest in a corresponding ETF instead - the desire for (re)insurers was too great, but the budget for the sector was too low. With $EXH5 (-0,34%) I have found a solid ETF for myself that has a strong weighting in the (re)insurers that appeal to me (currently $ALV (-0,22%) with just under 18%, followed by $ZURN (-0,13%) with 12% and $CS (-1,04%) and $MUV2 (-0,31%) with just under 10% each).

At the next payout, hopefully there will be a full share as a dividend so that there is enough for liability insurance that also covers the wife and child 😁

Dear Community,

For some time now, I have been struggling with the idea of using (re)insurers such as $MUV2 (-0,31%) or also $HNR1 (-0,46%) in my portfolio. But also the $ZURN (-0,13%) and the $SREN (+0,33%) have popped up from time to time.

While searching for a suitable ETF, I then came across the Invesco STOXX Europe 600 Optimized Insurance ETF $SC0Y (-0,41%) came across it.

Here are a few key facts about the ETF:

• Comprises 20 companies, led by
• $ALV (-0,22%)
  (14,34%),
• $CS (-1,04%)
  (12,27%),
• $ZURN (-0,13%)
  (11,59%) and
• $MUV2 (-0,31%)
  (10,99%)
  (as at: 11.06.2025)
• Includes mainly companies from Germany (28,4%)Switzerland (24,4%)United Kingdom (15%) and France (13%) (as at: 11.06.2025)
• Fund volume: just under 50 million, and rising (as at: 19.06.2025)
• TER: 0.20%
• Management type: passive
• Dividend: Accumulating

I would like to invest just under 15% of my portfolio in this ETF.

Questions:

• How do you generally rate the idea of holding (re)insurers in your portfolio?
• How do you rate the relatively small number of companies in the ETF? Risk assessment?
• What do you think of the ETF? Can you explain why it has a fund volume of "only" 50 million, while, for example, the more than twice as expensive iShares STOXX Europe 600 Insurance UCITS ETF (DE) $EXH5 (-0,34%) has a fund volume of more than 450 million - even though both ETFs have almost identical growth?

Thank you in advance for your constructive feedback. And remember to drink enough water in this weather! 💧

@Dividenden_Monteur
@BamBamInvest
@DividendenAlpaka
@RenditeRudin

Source:

https://www.invesco.com/de/de/financial-products/etfs/invesco-stoxx-europe-600-optimised-insurance-ucits-etf-acc.html

The sun is shining, the wine is uncorked, the Swiss cheese is ready and the clock is of course set on time - what more could you want in life? Okay, maybe a few things... but we are modest 😜.

So: Which Swiss stocks do you currently have in your portfolio?

I am with $ZURN (-0,13%) and $SREN (+0,33%) with. My watchlist still includes $NESN (-0,39%) and $JFN (+2,1%)

What's your view - more defensive with consumption and insurance or completely different CH pearls?

Enjoy Sunday and here's to a strong start to the new stock market week!

Munich Re $MUV2 (-0,31%) presented its figures for the first quarter of 2025 today and the share price reacted slightly lower.

The company is once again showing its resilience.

In this article, I will organize the current quarterly statement [1], the IR presentation [2] and the earnings call [3], so that the typical "hobby investor" (like me) is also well informed and has a better understanding of Munich Re's business and developments.

📊 Overview Q1 2025

• Group result: €1.094 billion (previous year: €2.115 billion)
• Operating result1.465 billion (previous year: € 2.891 billion)
• Insurance turnover: € 15.8 billion (previous year: € 15.1 billion)
• RoE (return on equity): 13.3% (previous year: 27.2%)

Digression: What does RoE mean and why has it fallen so sharply?

RoE (return on equity) stands for return on equity and measures how efficiently a company manages its shareholders' capital. The higher, the better.

The RoE is particularly important for insurance companies that work with a lot of capital (e.g. for provisions and investments), as it shows how profitably the tied-up capital is actually being used.

At Munich Re, the RoE fell from 27.2% to 13.3% in Q1. This is not due to operational weakness, but primarily to:

• a significantly lower profit (-48% compared to the previous year)
• high losses due to forest fires
• and currency losses of € -506 million

Nevertheless, the capital base remains strong and the RoE should recover once the claims experience normalizes.

Background to the decline in earnings

The sharp fall in earnings is still immediately apparent, and here are the main reasons for this:

Forest fires in Los Angeles:

The biggest negative factor was the devastating forest fires in Los Angeles, which cost Munich Re around €1.1 billion Group-wide.

Update from the call:

"The LA wildfires of €1.1bn altogether, which is a slight decline from the initially announced €1.2bn due to positive effects of a weaker USD and retrocession."

➡️ The net charge was therefore revised slightly downwards.

Currency losses (currency result):

Munich Re was heavily invested in the US dollar through so-called "long positions". As the US dollar depreciated during the quarter, this resulted in a currency loss of -506 million.

"A 10% decline in the USD would result in an approx. 5% decline in net income."

➡️ The impact of the USD loss is therefore not just a one-off, but will also have a structural impact if the weakness continues. Munich Re therefore reduced its long USD position in the course of Q1, but has not yet fully liquidated it.

Operating result halved:

• Especially compared to the strong Q1 2024 (with unusually low losses), the operating result thus fell by almost 50%.

Insights from the call on this:

CFO on earnings quality and operational strength despite decline:

"While our underlying technical profitability continues to be very strong overall, high large losses, fair value changes in the investment result and significant currency movement affected our net earnings."

The message: The decline in earnings is not operationally driven, but results from external volatilities (losses, capital markets, currencies).

This also confirms why Munich Re is sticking to its annual forecast of €6 billion.

Digression for understanding: What does the combined ratio mean and why is it so important?

The combined ratio is a key performance indicator in property and casualty insurance (P&C = Property & Casualty).

It measures the profitability of the insurance business:

Combined ratio = (claims expenditure + administrative costs) / premiums earned

• <100 %: The insurance business is profitable
• >100 %: The company pays out more than it earns

Examples in Q1 2025:

• Reinsurance P&C83.9% -> good despite high claims
• Specialty Insurance: 95.5 % -> close to the break-even point
• ERGO Germany P&C: 88,8 %
• ERGO International P&C: 89,0 %

Business segments

1️⃣ Reinsurance

Munich Re acts as a reinsurer here, they "insure insurance".

Particularly important in areas such as natural catastrophes, life, health and liability.

In the event of major claims, for example, Munich Re helps other insurers such as Allianz or AXA to cover the risk.

Highlights Q1 2025:

• Result853 million (previous year: €1,888 million)
• Turnover10.3 billion €

Property/casualty reinsurance:

Burdened by major losses (€ 1.0 billion), in particular:

• Forest fires in Los Angeles: ~€800 million loss
• Combined ratio83.9 % (target value is ~95 %, i.e. OK)

Life/health reinsurance: Very strong

• Result: 501 million €
• Technical result608 million (above target value)

What is the technical result here?

It measures the pure insurance performance, i.e. how profitable the underwriting is, excluding investment effects. This is particularly important in life/health reinsurance, as long-term contracts dominate here.

Insights from the call on this:

Life & Health reinsurance, explanation of the strong result:

"We benefited from positive experience driven by the U.S. portfolio [...] but we do not consider this to be the new run rate."

The strong technical result (€ 608 million) was due in part to lower mortality, fewer major claims and good contract development in the US. According to management, however, this level cannot be maintained in the long term.

2️⃣ Global Specialty Insurance (GSI)

A newly designated area for specialty insurance, managed by the reinsurance organization. Focus: commercial specialty risks.

• Resultonly € 8 million (previous year: € 163 million)
• Combined ratio: 95.5 % (heavily impacted by LA forest fires)

• Individual loss Los Angeles: ~€200 million

➡️ Result of the forest fires: Only €8m net profit, a sharp decline.

The GSI division was hit hard, mainly due to one-off major losses and the segment change. Without these effects, the company would have been on target according to management.

3️⃣ ERGO acquires Munich Re's direct insurance business

Traditional insurance for end customers, such as motor, household, life and health insurance. Divided into Germany and International.

Q1 2025 at a glance:

• Overall result ERGO241 million (previous year: € 226 million)
• Turnover5.56 billion €

ERGO Germany:

• Result140 million €
• Combined ratio P&C88.8 % (slightly above previous year, but within target range)

ERGO International:

• Result100 million (previous year: € 65 million)
• Strong contributions from Poland, Greece and the Spanish healthcare business

Major losses Q1 2025

• Total losses from natural catastrophes757 million €

Man-made major losses251 million (->

• z. e.g. industrial fires, infrastructure accidents, disasters, everything that is not caused by nature)
• Largest single lossForest fires in Los Angeles (~€1.1 billion across all segments)

This is the most expensive forest fire loss to date for the insurance industry worldwide.

Investment result & financial markets

• Investment result1.32 billion (previous year: € 2.16 billion)
• Main reasonLosses on fixed-interest securities due to higher interest rates
• Return on investment2.2 % (previous year: 3.8 %)
• Currency losses (mainly USD): € -506 million

Share buybacks & dividend

• Munich Re confirms share buy-back program of 2 bn € .. read correctly 2 billion buyback!💰

• Dividend of € 20.00 per share (as already announced for the 2024 annual financial statements)

➡️ How should this be assessed?

The buyback volume is exceptionally high, especially in comparison with other insurers or DAX companies.

It continues to show:

• Capital discipline
• Confidence in its own business model
• Focus on shareholder value
• Repatriation of excess capital in times without takeovers

Despite massive capital returns, the capital base is exceptionally robust.

Munich Re "earned the share buy-back virtually within one quarter", as the CFO put it.

April renewals & market outlook

• New business in reinsurance contracts: +6.1 % volume
• Price level: slightly down (-2.5 %), but risk-adjusted
• Important growth marketsIndia, Latin America, Europe

Risk-adjusted means: Prices were calculated taking into account current claims inflation and risk situation.

A price decline of -2.5 % therefore does not mean that the contracts are cheaper or weaker, but that the premium level has fallen slightly after risk adjustment.

At the same time, the total volume of renewed contracts rose by +6.1%, which is a positive development.

What does "April renewal" actually mean?

In the reinsurance industry, many contracts are renegotiated every year - this is called "renewals".

These do not all take place at the beginning of the year, but are staggered regionally:

• January renewalse.g. Europe, North America
• April renewale.g. Japan, India, parts of Latin America
• July renewale.g. Australia, South Africa, special programs in the USA

The April renewals thus include all reinsurance treaties renewed as at April 1.

Munich Re was able to increase its business volume by +6.1%, despite a slight decline in prices (risk-adjusted: -2.5%).

This shows that Demand remains high and Munich Re can continue to conclude profitable new business.

Strategic development: acquisition of NEXT Insurance

Munich Re has announced the complete takeover of NEXT Insurance via its primary insurance subsidiary ERGO.

The transaction values the US insurtech company at USD 2.6 billion.

NEXT Insurance was founded in 2016 and offers digital insurance for small and medium-sized enterprises (SMEs) in the USA. With over 600,000 customers and a turnover of USD 548 million in 2024, the company represents a significant addition to the ERGO portfolio.

The integration of NEXT Insurance enables ERGO to directly enter the US SME insurance market, which is considered to be extremely attractive.

The transaction is expected to be completed in the third quarter of 2025 and is expected to contribute hundreds of millions to ERGO's net profit in the medium term.

"We expect earnings uplift from the Next Insurance acquisition in Q3.

"M&A remains on the table - we are monitoring opportunities."

Munich Re expects positive earnings contributions from the NEXT Insurance acquisition in Q3.

The company is also keeping its options open for further acquisitions, particularly in the area of specialty insurance.

🔮 Outlook for 2025

• Annual target: Group profit of € 6 billion is confirmed

Expected:

• Insurance sales: ~€64 billion
• Return on investment: >3%
• Reinsurance: stable margins despite climate risks

🏷️ Conclusion:

Strong basis, high burdens, share price dampened, fundamentals remain robust

Munich Re shows once again:

The business model is resilient.

Despite extreme natural events (LA forest fires) and unfavorable currency effects, the company remains profitable. The life/health segment shines.

What remains: The operating result has halved and comparison with the exceptionally strong Q1 2024 is difficult.

The markets had probably expected more.

With a €20 dividend, a €2 billion share buyback and a stable outlook of €6 billion in annual earnings, Munich Re nevertheless remains a reliable value stock for me with growth in reinsurance and solid risk management.

The position in my portfolio will double within the next few months.

______

$SREN (+0,33%)
$HNR1 (-0,46%)
$CS (-1,04%)
$ALV (-0,22%)
$ZURN (-0,13%)

______

Thanks for reading! 🤝

______

Sources:

[1] https://www.munichre.com/content/dam/munichre/mrwebsiteslaunches/2025-q1/MunichRe-Quartalsmitteilung-1-2025_de.pdf/_jcr_content/renditions/original./MunichRe-Quartalsmitteilung-1-2025_de.pdf

[2] https://www.munichre.com/content/dam/munichre/mrwebsiteslaunches/2025-q1/MunichRe-Presentation-IR-Q1-2025_en.pdf/_jcr_content/renditions/original./MunichRe-Presentation-IR-Q1-2025_en.pdf

[3] https://web.quartr.com/link/companies/6425/events/345177/transcript?targetTime=0.0

More:

https://www.reinsurancene.ws/munich-re-acquires-next-insurance-to-become-part-of-ergo/?