Munich Re withstands large-loss and payout pressures

Diversified earnings and stronger investment returns supported group profitability in 2025.

Munich Reinsurance Company’s (Munich Re) risk-adjusted capitalisation remains at the strongest level under Best’s Capital Adequacy Ratio (BCAR) and is expected to stay there despite exposure to potentially large losses, as well as substantial dividend payments and share buybacks.

AM Best also said the insurer has the strongest balance sheet strength, strong operating performance, very favourable business profile and very strong enterprise risk management.

The rating agency said Munich Re also benefits from strong financial flexibility and a low adjusted financial leverage ratio of 8.3% at the end of 2025. Interest coverage also remained strong.

Munich Re reported a net profit of $7.0b (EUR6.1b) in 2025, up from $6.5b (EUR5.7b) in 2024, with a return on equity of 18.5%, according to AM Best’s calculations.

The property and casualty reinsurance business posted a net profit of $3.8b (EUR3.3b), whilst the Global Specialty Insurance segment earned $0.7b (EUR0.6b), helped by natural catastrophe and man-made losses coming in below budget.

The life and health reinsurance division recorded a net profit of $1.5b (EUR1.3b), whilst ERGO contributed $1.0b (EUR0.9b).

AM Best said the group's diversified earnings and higher investment returns supported its overall financial performance.

The agency added that Munich Re’s global presence, strong brand and diversified operations across life, health and property and casualty reinsurance leave the group well placed to manage softer conditions in the reinsurance market.

($1.00 = EUR0.88)