Munich Re raises 2026 profit target to 6.6 billion euros as third-quarter earnings decline
Key Facts
On November 12, Munich Re reaffirmed a 2026 net profit target of 6.6 billion euros, up from its previous target of 6.3 billion euros. The company had announced the target increase on October 23, then reaffirmed it when it published final third-quarter results. It attributed the higher outlook to satisfactory operating performance across all business segments. It also cited expectations for below-average major losses in property-casualty reinsurance and strong investment results in reinsurance. The annual target balances operating performance described by the company as positive with a decline in third-quarter earnings compared with the previous year.
Third-quarter net income was 1.742 billion euros, compared with 1.997 billion euros in the corresponding period of 2025. The company said the year-on-year comparison was affected by an exceptional decline in major-loss expenses in the same quarter of the previous year. Operating profit was 2.472 billion euros, compared with 3.036 billion euros a year earlier. By contrast, quarterly insurance revenue rose to 16.626 billion euros from 14.575 billion euros. For the first nine months, net income was 5.667 billion euros, compared with 5.176 billion euros in the same period of 2025, while insurance revenue reached 46.583 billion euros, versus 45.162 billion euros.
Reinsurance contributed 1.479 billion euros to third-quarter net income, down from 1.693 billion euros a year earlier. But its contribution for the first nine months rose to 4.849 billion euros from 4.380 billion euros in the corresponding period. ERGO contributed 263 million euros to quarterly earnings, compared with 304 million euros a year earlier. For the nine-month period, ERGO reported earnings of 819 million euros, up from 796 million euros. The comparison shows differing trajectories for the two businesses between the standalone quarter and the year-to-date period.
Major losses in property-casualty reinsurance totaled 646 million euros in the third quarter, including 514 million euros from natural catastrophes and 132 million euros from man-made events. Munich Re said major losses were below the expected average, supporting its assessment of the period's performance. Nevertheless, the combined ratio in this business was 80.0%, compared with 62.7% in the third quarter of 2025. The company expects the ratio to be below 80% in 2026, after a previous estimate of around 80%. It also raised its expected ratio for global specialty insurance to below 90%, from around 90% previously.
In life and health reinsurance, the total technical result was 493 million euros in the third quarter, compared with 314 million euros in the same period a year earlier. The group's annualized return on equity for the first nine months also rose to 21.9%, from 20.8% in the corresponding period of 2025. The company said the investment result in reinsurance benefited from higher recurring income. It added that overall negative fair-value changes were driven mainly by higher interest rates. These indicators put growth in the life and health technical result alongside strong investment returns, while interest rates continued to affect investment valuations.
The solvency ratio under the European Solvency framework was 301% at the end of the third quarter, compared with 290% at the end of 2025, exceeding the company's target of more than 200%. The ratio provides an indication of capital available to meet insurance obligations, among the period data reported by the company. The company has scheduled a presentation of its 2027 outlook for December 10, 2026. The 2026 financial results are due to be published on February 25, 2027, according to its events calendar. The outlook presentation and results dates follow confirmation of the annual target and revisions to forecasts for some combined ratios.