Munich Re Reports Record Profits as It Sharpens Focus on Profitability and Market Discipline

Munich Re continues to thrive in what it describes as a still-attractive global reinsurance market, even as pricing momentum has softened in parts of 2025. Despite this, the company is now taking a more disciplined and selective approach to portfolio management, signaling a shift toward cycle management and profitability optimisation.

Speaking after releasing the company’s second-quarter and half-year financial results, CEO Joachim Wenning emphasized that Munich Re remains well-positioned, benefiting from favorable market conditions while strategically pulling back from less attractive lines of business.

Strong Financial Performance in Q2 2025

Munich Re delivered a record-breaking €2.1 billion net profit in Q2 2025, contributing to a €3.2 billion half-year result. The company reaffirmed its ambitious €6 billion full-year profit target, driven by strong underwriting performance and solid investment returns.

Notable highlights from the second quarter include:

Low major loss activity and reserve releases limited claims impact in property and casualty (P&C) reinsurance to just €87 million.
P&C reinsurance posted a remarkably low combined ratio of 61%, while specialty insurance came in at 78%.
Q2 reinsurance profits stood at €1.834 billion, up significantly from €1.339 billion in Q2 2024.

Disciplined Underwriting and Selective Renewals

While market conditions remain favorable, Munich Re is taking a sharper stance on underwriting discipline, especially during the July 2025 renewals. The company reported:

A 3.2% reduction in written business volume, down to €3.2 billion.
Selective non-renewals for contracts that did not meet profitability or strategic thresholds.
A modest 2.5% decline in average pricing, though the reinsurer maintained overall pricing quality across its portfolio.

In the property excess of loss (XoL) segment, Munich Re scaled back exposure by 5%, driven by pricing falling around 4% in this class. These moves reflect a stronger cycle management posture, especially as inflation and other loss trends weigh on forward-looking estimates.

Stable Terms, Strong Fundamentals

Munich Re confirmed that terms and attachment points remained largely stable, contributing to overall portfolio resilience. The company emphasized that most pricing continues to compensate adequately for higher loss assumptions, especially in high-risk areas.

The reinsurer described the July 1 renewals as a “good renewal in an attractive market,” maintaining its enhanced contract terms and positioning for long-term profitability.

Outlook: Staying Disciplined Into 2026

Looking ahead to the January 2026 renewal season, Munich Re expects the market to continue offering attractive growth and pricing opportunities. However, the reinsurer made it clear: if conditions deteriorate, it is prepared to act decisively, reduce exposure, and prioritize underwriting discipline over growth.

As CEO Wenning summarized:

“In the second quarter, Munich Re posted a record-breaking profit of €2.1bn. All lines of business contributed strongly. With our half-year result at €3.2bn, we are well on track to meet our full-year target. Our task now is to continue capitalising on the market through stringent discipline.”

Key Takeaways