Half Year 2026 Münchener Rückversicherungs-Gesellschaft AG in München Earnings Call - Press Conference

August 7, 2026

Speaker #1: Ladies and gentlemen, a very warm welcome to the Media Conference of Munich RE for the financial figures in Q2 and for the half-year 2026.

Speaker #1: Munich RE's CEO, Christoph Jurecka, and CFO, Andrew Buchanan, will present and explain the results. To you and afterwards we are happy to get your questions.

Speaker #1: The conference call will be streamed live from our web page, munichre.com, and the recording of the presentation can be found there later today. Conference language today is English.

Speaker #1: With this, I hand over to Mr. Jurecka, please.

Speaker #2: Well, thank you very much, Stefan, and yeah, good morning. It's a pleasure to present such excellent results today. Let's start immediately at page 4.

Speaker #2: And as you can see on that slide, we deliver on our promises. Munich RE is firmly on track to achieve its full-year targets that it has consistently done in recent years.

Speaker #2: With a net result of 3.9 billion euros in the first half of the year, we have already achieved more than 60% of the full-year net income guidance.

Speaker #2: To be fair, we benefited from low major losses, and a strong equity market performance. However, these results at the same time reflect the continued strength of the underlying performance across our business segments, which I will discuss in more detail later.

Speaker #2: This performance translates into a return on equity of 23%, comfortably above our ambition 2030 target of more than 18%. After only 6 months into the new financial ambition, I'm fully confident that we will deliver on our medium-term targets despite the current headwinds in P&C reinsurance.

Speaker #1: Long equity market performance. However, these results, at the same time, reflect the continued strength of the underlying performance across our business segments, which I will discuss in more detail later.

Christoph Jurecka: On equity market performance. These results at the same time reflect the continued strength of the underlying performance across our business segments, which I will discuss in more detail later. This performance translates into a return on equity of 23%, comfortably above our Ambition 2030 target of more than 18%. After only six months into the new financial ambition, I am fully confident that we will deliver on our medium-term targets despite the current headwinds in P&C Reinsurance. My confidence is underpinned by the strength of our businesses, which are largely insulated from the P&C Reinsurance cycle. Slide seven illustrates that the growth in GSI, in Life Re and ERGO more than offsets the revenue decline in P&C Reinsurance on a currency adjusted basis. We will continue to expand their earnings contribution, enhancing the diversification of our earnings profile and further strengthening the resilience of our financial performance over time.

Speaker #2: My confidence is underpinned by the strength of our businesses, which are largely insulated from the P&C reinsurance cycle. Slide 5 illustrates that the growth in GSI in life free and ergo more than offsets the revenue decline in P&C reinsurance on a currency-adjusted basis.

Speaker #1: A return on equity of 23%, comfortably above our ambition 2030 target of more than 18%. After only six months into the new financial ambition, I'm fully confident that we will deliver on our medium-term targets despite the current headwinds in P&C reinsurance.

Speaker #2: We will continue to expand their earnings contribution, enhancing the diversification of our earnings profile, and further strengthening the resilience of our financial performance over time.

Speaker #2: GSI is actively shaping its portfolio to capture opportunities in attractive specialty markets. While life free and ergo are delivering consistent earnings growth for quite some time now.

Speaker #1: My confidence is underpinned by the strength of our businesses, which are largely insulated from the P&C reinsurance cycle. Slide 5 illustrates that the growth in GSI in Life, Free, and ERGO more than offsets the revenue decline in P&C reinsurance on a currency-adjusted basis.

Speaker #2: And while P&C reinsurance contributed around 50% of our half-year earnings, the strong performance of these businesses gives us the reinsurance cycle more strictly. We can afford to walk away from business where pricing does not meet our profitability requirements.

Speaker #1: We will continue to expand their earnings contribution, enhance the diversification of our earnings profile, and further strengthen the resilience of our financial performance over time.

Speaker #2: Disciplined underwriting remains essential to maintaining the quality of our portfolio and navigating a temporarily more challenging market environment. Across the group, management incentives are not driven by top-line targets, in many cases foregoing business is preferable to writing business at inadequate terms.

Speaker #1: TSI is actively shaping its portfolio to capture opportunities in attractive specialty markets, while Life, Free, and Ergo are delivering consistent earnings growth for quite some time now.

Christoph Jurecka: GSI is actively shaping its portfolio to capture opportunities in attractive specialty markets, while Life Re and ERGO are delivering consistent earnings growth for quite some time now. While P&C Reinsurance contributed around 50% of our H1 earnings, the strong performance of these businesses gives us greater flexibility to manage the reinsurance cycle more strictly. We can afford to walk away from business where pricing does not meet our profitability requirements. Disciplined underwriting remains essential to maintaining the quality of our portfolio and navigating a temporarily more challenging market environment. Across the group, management incentives are not driven by top-line targets. In many cases, foregoing business is preferable to writing business at inadequate terms. While we of course value long-term client relationships, accordingly, our insurance revenue guidance should be understood as a directional ambition rather than a hard target.

Speaker #1: And while P&C Reinsurance contributed around 50% of our half-year earnings, the strong performance of these businesses gives us great flexibility to manage the reinsurance cycle more strictly.

Speaker #2: While we of course value long-term client relationships. Accordingly, our insurance revenue guidance should be understood as a directional ambition rather than a hard target.

Speaker #1: We can afford to walk away from business where pricing does not meet our profitability requirements. This underwriting remains essential to maintaining the quality of our portfolio and navigating a temporarily more challenging market environment.

Speaker #2: And this brings me already to the July renewals on slide 6. Our discipline was evident again in the July renewals, where we managed the portfolio consistently to optimize the risk-adjusted returns.

Speaker #1: Across the group, management incentives are not driven by top-line targets; in many cases, foregoing business is preferable to writing business at inadequate terms. While we, of course, value long-term client relationships.

Speaker #2: We withdrew from business with inadequate profitability particularly in the XL segment, partly offset by new business opportunities in proportional and non-proportional business. Overall, volume declined by around 9%.

Speaker #1: Accordingly, our insurance revenue guidance should be understood as a directional ambition rather than a hard target. And this brings me already to the July renewals on slide 6.

Speaker #2: However, largely driven by the overall price decrease of 5.5% and a further material reduction in US casualty. The reported price change includes a negative business mix effect of around 1 percentage point due to an increased share of proportional business.

Speaker #1: Our discipline was evident again in the July renewals, where we managed the portfolio consistently to optimize risk-adjusted returns. We withdrew from business with inadequate profitability, particularly in the XL segment, partly offset by new business opportunities in proportional and non-proportional business.

Christoph Jurecka: This brings me already to the July renewals on slide six. Our discipline was evident again in the July renewals, where we managed the portfolio consistently to optimize the risk-adjusted returns. We withdrew from business with inadequate profitability, particularly in the XL segment, partly offset by new business opportunities in proportional and non-proportional business. Overall, volume declined by around 9%, however, largely driven by the overall price decrease of 5.5% and a further material reduction in US casualty. The reported price change includes a negative business mix effect of around 1 percentage point due to an increased share of proportional business. In essence, we saw no acceleration in rate softening compared to the April renewals. Pricing in XL business moderated by the same amount by a slightly higher decline in proportional business reflected the higher starting profitability in those markets renewing in July.

Speaker #2: In essence, we saw no acceleration in rate softening compared to the April renewals. Pricing in XL business moderated by the same amount by slightly higher declines in proportional business reflected the higher starting profitability in those markets renewing in July.

Speaker #1: Overall, volume declined by around 9%; however, this was largely driven by the overall price decrease of 5.5% and a further material reduction in US casualty. The reported price change includes a negative business mix effect of around 1% due to an increased share of proportional business.

Speaker #2: In casualty business specifically, we have not accepted a meaningful increase in seating commissions but we are still concerned about lost cost trends being greater than rate increases in the primary insurance markets.

Speaker #1: In essence, we saw no acceleration in rate softening compared to the April renewals. Pricing in XL business moderated by the same amount, while slightly higher declines in proportional business reflected the higher starting profitability in those markets renewing in July.

Speaker #2: Importantly, market discipline was largely maintained with structures and wordings holding firm. Overall, the market environment remains still quite attractive and continues to offer healthy margins for the risks we assume.

Speaker #1: In casualty business specifically, we have not accepted a meaningful increase in ceding commissions, but we are still concerned about loss cost trends being greater than rate increases in the primary insurance markets.

Speaker #2: Maintaining the discipline requires the flexibility to redeploy capacity swiftly across geographies and peril. Munich RE has a clear competitive advantage in this respect, underpinned by its strong capitalization, the global footprint, and deep client relationships.

Christoph Jurecka: In casualty business specifically, we have not accepted a meaningful increase in ceding commissions. We are still concerned about loss cost trends being greater than rate increases in the primary insurance markets. Importantly, market discipline was largely maintained, with structures and wordings holding firm. Overall, the market environment remains still quite attractive and continues to offer healthy margins for the risks we assume. Maintaining the discipline requires the flexibility to redeploy capacity swiftly across geographies and peril. Munich RE has a clear competitive advantage in this respect, underpinned by its strong capitalization, the global footprint, and deep client relationships. The bubble chart you can see on slide seven illustrates how consistently we manage the portfolio. We are prepared to reduce or exit business where the pricing does not adequately reflect the underlying risks. We also maintain business that comes from a very good level and is still attractive.

Speaker #1: Importantly, market discipline was largely maintained, with structures and wordings holding firm. Overall, the market environment remains quite attractive and continues to offer healthy margins for the risks we assume.

Speaker #2: The bubble chart you can see on slide 7 illustrates how consistently we manage the portfolio we are prepared to reduce or exit business where the pricing does not adequately reflect the underlying risks, but we also maintain business that comes from a very good level and is still attractive.

Speaker #1: Maintaining discipline requires the flexibility to redeploy capacity swiftly across geographies and perils. Munich Re has a clear competitive advantage in this respect, underpinned by its strong capitalization, global footprint, and deep client relationships.

Speaker #2: At the same time, we continue to identify attractive opportunities to deploy capacity and selectively grow, including in Latin America and the United States. Less exposed to the cycle is our global specialty insurance business, which is shown on slide 8.

Speaker #1: The bubble chart you can see on slide 7 illustrates how consistently we manage the portfolio. We are prepared to reduce or exit business where the pricing does not adequately reflect the underlying risks, but we also maintain business that comes from a very good level and is still attractive.

Speaker #2: We established GSI to bring Munich RE's growing specialty primary insurance business under a single integrated management structure, while leveraging the group's risk expertise, capital strength, and brand.

Speaker #1: At the same time, we continue to identify attractive opportunities to deploy capacity and selectively grow, including in Latin America and the United States. Less exposed to the cycle is our global specialty insurance business, which is shown on slide 8.

Speaker #2: The business grew by around 800 million euros annually through 2024 and adjusted for currency effects would have continued to grow in 2025. By combining a broad range of specialty insurance businesses, geographies, distribution channels, and underwriting cycles, GSI can flexibly allocate capital to the most attractive profit pools.

Christoph Jurecka: At the same time, we continue to identify attractive opportunities to deploy capacity and selectively grow, including in Latin America and the US. Less exposed to the cycle is our Global Specialty Insurance business, which is shown on slide eight. We established GSI to bring Munich Re's growing specialty primary insurance business under a single integrated management structure while leveraging the group's risk expertise, capital strength, and brand. The business grew by around EUR 800 million annually through 2024, and adjusted for currency effects, would have continued to grow in 2025. By combining a broad range of specialty insurance businesses, geographies, distribution channels, and underwriting cycles, GSI can flexibly allocate capital to the most attractive profit pools. Recent product extensions are US real estate, professional liability, as well as surety in Europe. In terms of profitability, GSI has consistently delivered a very strong combined ratio, fluctuating moderately around 90%.

Speaker #1: We established GSI to bring Munich Re's growing specialty primary insurance business under a single, integrated management structure, while leveraging the Group's risk expertise, capital strength, and brand.

Speaker #2: Recent product extensions are US real estate, professional liability, as well as surety in Europe. In terms of profitability, GSI has consistently delivered a very strong combined ratios, fluctuating moderately around 90%.

Speaker #1: The business grew by around €800 million annually through 2024, and adjusted for currency effects, would have continued to grow in 2025. By combining a broad range of specialty insurance businesses, geographies, distribution channels, and underwriting cycles, GSI can flexibly allocate capital to the most attractive profit pools.

Speaker #2: And looking forward, the segment is well on track to generate robust and gradually increasing earnings over time, and to achieve both this year's targets and the medium-term objectives of ambition 2030.

Speaker #1: Recent product extensions include U.S. real estate, professional liability, as well as surety in Europe. In terms of profitability, GSI has consistently delivered very strong combined ratios, fluctuating moderately around 90%.

Speaker #2: Moving to life reinsurance, on page 9, which has performed strongly in recent years, and this positive momentum continues. We remain highly successful in generating new business that will translate into earnings over time.

Speaker #1: And looking forward, the segment is well on track to generate robust and gradually increasing earnings over time, and to achieve both this year's targets and the medium-term objectives of Ambition 2030.

Speaker #2: In the first half of the year, we concluded a longevity transaction covering 4 billion euros of pension liabilities. And more recently, we completed two large structured transactions in the United States, which will only be reflected in our numbers later this year.

Speaker #1: Moving to life reinsurance on page 9, which has performed strongly in recent years, this positive momentum continues. We remain highly successful in generating new business that will translate into earnings over time.

Christoph Jurecka: Looking forward, the segment is well on track to generate robust and gradually increasing earnings over time, and to achieve both this year's targets and the medium-term objectives of Ambition 2030. Moving to Life Reinsurance on page nine, which has performed strongly in recent years, this positive momentum continues. We remain highly successful in generating new business that will translate into earnings over time. In the H1 of the year, we concluded a longevity transaction covering EUR 4 billion of pension liabilities. More recently, we completed two large structured transactions in the US, which will only be reflected in our numbers later this year. Our substantial CSM stock provides a strong foundation for reliable earnings delivery. Supported by a well-diversified portfolio, we continue to capture attractive opportunities in transactional business and in longevity. At the same time, we remain disciplined.

Speaker #2: Our substantial CSM stock provides a strong foundation for reliable earnings delivery. Supported by a well-diversified portfolio, we continue to capture attractive opportunities in transactional business and in longevity.

Speaker #1: In the first half of the year, we concluded a longevity transaction covering €4 billion of pension liabilities. And more recently, we completed two large structured transactions in the United States, which will only be reflected in our numbers later this year.

Speaker #2: At the same time, we remain disciplined; our clearly defined risk appetite helps mitigate the risk of adverse surprises as evidenced by aggregate experience that is tracking slightly better than expected.

Speaker #1: Our substantial CSM stock provides a strong foundation for reliable earnings delivery. Supported by a well-diversified portfolio, we continue to capture attractive opportunities in transactional business and in longevity.

Speaker #2: The very strong performance of our FINMO RE business once more made a significant contribution to earnings. Together, these factors drove the total technical result of more than 1 billion euro in the first half of the year, somewhat ahead of the pro-rata full-year guidance and underpinning the targets of ambition 2030.

Speaker #1: At the same time, we remain disciplined; our clearly defined risk appetite helps mitigate the risk of adverse surprises, as evidenced by aggregate experience that is tracking slightly better than expected.

Speaker #1: The very strong performance of our FinMo Re E business once more made a significant contribution to earnings. Together, these factors drove a total technical result of more than €1 billion in the first half of the year, somewhat ahead of the pro-rata full-year guidance and underpinning the targets of Ambition 2030.

Speaker #2: Turning now to ERGO, on page 10, which continues to deliver reliably against its ambitions and is well on track to achieve its targets once again.

Christoph Jurecka: Our clearly defined risk appetite helps mitigate the risk of adverse surprises, as evidenced by aggregate experience that is tracking slightly better than expected. The very strong performance of our FinRe business once more made a significant contribution to earnings. Together, these factors drove a total technical result of more than EUR 1 billion in the H1 of the year, somewhat ahead of the pro rata full year guidance and underpinning the targets of Ambition 2030. Turning now to ERGO on page 10, which continues to deliver reliably against its ambitions and is well on track to achieve its targets once again. ERGO's digital-first approach and the systematic deployment of AI across the group are key drivers of further efficiency gains and scalability.

Speaker #2: ERGO's digital-first approach and the systematic deployment of AI across the group are key drivers of further efficiency gains and scalability. At the same time, ERGO is deepening customer engagement through its customer portal, a four-time German brand award winner, and the ERGO app, which ranks first among the insurance apps in customer surveys.

Speaker #1: Turning now to ERGO on page 10, which continues to deliver reliably against its ambitions and is well on track to achieve its targets once again.

Speaker #1: ERGO's digital-first approach and the systematic deployment of AI across the group are key drivers of further efficiency and scalability. At the same time, ERGO is deepening customer engagement through its customer portal, a four-time German Brand Award winner, and the ERGO app, which ranks first among insurance apps in customer surveys.

Speaker #2: In addition, ERGO continues to invest in its global brand to strengthen international visibility. In Germany, the focus remains on profitable growth, balancing top-line expansion with underwriting discipline.

Speaker #1: In addition, ERGO continues to invest in its global brand to strengthen international visibility. In Germany, the focus remains on profitable growth, balancing top-line expansion with underwriting discipline.

Speaker #2: We see attractive growth opportunities in P&C, including in fire property and motor, as well as in supplementary health and in new life business. This is supported by top-rated products and a high-performing sales organization.

Christoph Jurecka: At the same time, ERGO is deepening customer engagement through its customer portal, a four-time German Brand Award winner, and the ERGO app, which ranks first among the insurance apps in customer surveys. ERGO continues to invest in its global brand to strengthen international visibility. In Germany, the focus remains on profitable growth, balancing top-line expansion with underwriting discipline. We see attractive growth opportunities in P&C, including in fire, property, and motor, as well as in supplementary health and in new life business. This is supported by top-rated products and a high-performing sales organization. Together with disciplined underwriting and effective claims management, this underpins a strong technical profitability. While Germany remains an important market for ERGO, of course, the strategic focus is gradually shifting towards a higher international earnings contribution, where ERGO continues to deliver dynamic growth.

Speaker #1: We see attractive growth opportunities in P&C, including in fire property and motor, as well as in supplementary health and new life business. This is supported by top-rated products and a high-performing sales organization.

Speaker #2: Together with disciplined underwriting and effective claims management, this underpins a strong technical profitability. And while Germany remains an important market for ERGO, of course, the strategic focus is gradually shifting towards a higher international earnings contribution, where ERGO continues to deliver dynamic growth.

Speaker #1: Together with disciplined underwriting and effective claims management, this underpins strong technical profitability. And while Germany remains an important market for ERGO, of course, the strategic focus is gradually shifting towards a higher international earnings contribution, where ERGO continues to deliver dynamic growth.

Speaker #2: Strong market positions, in Polish motor and Greek property, as well as in Belgian corporate health business, are driving profitable top-line expansion. The integration of ERGO NEXT is on track, and we are convinced that its AI capabilities platform, combined with ERGO's underwriting excellence, will be a key catalyst for profitable business development.

Speaker #1: Strong market positions in Polish motor and Greek property, as well as in the Belgian corporate health business, are driving profitable top-line expansion. The integration of ERGO NEXT is on track, and we are convinced that its AI capabilities platform, combined with ERGO's underwriting excellence, will be a key catalyst for profitable business development.

Speaker #2: Let us turn to our investment portfolio on page 11, which continues to benefit from supportive capital market conditions. We are reinvesting new money at 4.3%, providing further upside to the running yield.

Speaker #1: Let us turn to our investment portfolio on page 11, which continues to benefit from supportive capital market conditions. We are reinvesting new money at 4.3%, providing further upside to the running yield.

Christoph Jurecka: Strong market positions in Polish motor and Greek property, as well as in Belgian corporate health business, are driving profitable top-line expansion. The integration of ERGO Next is on track, and we are convinced that its AI capabilities platform, combined with ERGO's underwriting excellence, will be a key catalyst for profitable business development. Let us turn to our investment portfolio on page 11, which continues to benefit from supportive capital market conditions. We are reinvesting new money at 4.3%, providing further upside to the running yield. However, we are not relying on higher interest rates alone. We have identified additional levers to enhance returns, including the gradual expansion of alternative investments and the active pursuit of opportunities across markets and currencies. This quarter, we also benefited from a strong performance of our private equity portfolio.

Speaker #2: However, we are not relying on higher interest rates alone, with identified additional levers to enhance returns, including the gradual expansion of alternative investments and the active pursuit of opportunities across markets and currencies.

Speaker #1: However, we are not relying on higher interest rates alone, with identified additional levers to enhance returns, including the gradual expansion of alternative investments and the active pursuit of opportunities across markets and currencies.

Speaker #2: This quarter, we also benefited from a strong performance of our private equity portfolio. This brings me towards the end of my presentation, with the outlook 2026 on page 12.

Speaker #1: This quarter, we also benefited from a strong performance of our private equity portfolio. This brings me towards the end of my presentation, with the outlook for 2026 on page 12.

Speaker #2: Based on strong half-year results, we are heading with tailwind into the hurricane season. Being well on track to deliver another record result this year.

Speaker #1: Based on strong half-year results, we are heading with tailwind into the hurricane season, being well on track to deliver another record result this year.

Speaker #2: I'm even more so pleased that all businesses are contributing to this success. At our Q1 call in May, we announced that the revenue forecast is more challenging than we thought when we originally said it.

Speaker #1: I'm even more pleased that all businesses are contributing to this success. At our Q1 call in May, we announced that the revenue forecast is more challenging than we thought when we originally stated it.

Speaker #2: With the information of the latest renewals, we decided to lower our revenue guidance in reinsurance by 2 billion euros to 38 billion euros. As said in the beginning, for us, this is a directional goal, rather than a hard target.

Christoph Jurecka: This brings me towards the end of my presentation with the Outlook 2026 on page 12. Based on strong H1 results, we are heading with tailwind into the hurricane season, being well on track to deliver another record result this year. I'm even more so pleased that all businesses are contributing to this success. At our Q1 call in May, we announced that the revenue forecast is more challenging than we thought when we originally said it. With the information of the latest renewals, we decided to lower our revenue guidance in reinsurance by EUR 2 billion to EUR 38 billion. As said in the beginning, for us, this is a directional goal rather than a hard target. Related to that, let me conclude with a few remarks on our Ambition 2030 on page 13.

Speaker #1: With the information from the latest renewals, we decided to lower our revenue guidance in reinsurance by €2 billion, to €38 billion. As said in the beginning, for us this is a directional goal rather than a hard target.

Speaker #2: Related to that, let me conclude with a few remarks on our ambition 2030 on page 13. No doubt we are seeing the effects of the reinsurance cycle on growth and margins in our P&C reinsurance business.

Speaker #1: Related to that, let me conclude with a few remarks on our Ambition 2030 on page 13. No doubt, we are seeing the effects of the reinsurance cycle on growth and margins in our P&C reinsurance business.

Speaker #2: And this is, to some extent, amplified by the benign major loss experience, a double-edged sword that supports current earnings but doesn't help in price negotiations.

Speaker #1: And this, to some extent, is amplified by the benign major loss experience—a double-edged sword that supports current earnings, but doesn't help in bargaining negotiations.

Speaker #2: But such cyclical pressure is not new to us. And we have navigated similar phases successfully before. And this is precisely why we have already considered a certain slowdown of the technical performance in P&C reinsurance in the earlier years of our financial planning until 2030.

Speaker #1: But such cyclical pressure is not new to us, and we have navigated similar phases successfully before. This is precisely why we have already considered a certain slowdown of the technical performance in P&C reinsurance in the earlier years of our financial planning until 2030.

Christoph Jurecka: No doubt, we are seeing the effects of the reinsurance cycle on growth and margins in our P&C reinsurance business. This is to some extent amplified by the benign major loss experience, a double-edged sword that supports current earnings but doesn't help in price negotiations. Such cyclical pressure is not new to us, and we have navigated similar phases successfully before. This is precisely why we have already considered a certain slowdown of the technical performance in P&C reinsurance in the earlier years of our financial planning until 2030. However, this time around, we are even better placed than in previous cycles. Our strong balance sheet, higher investment income, and the steadily growing earnings contribution from businesses that are largely insulated from the P&C reinsurance cycle enable us to navigate the softer market environment from a position of strength.

Speaker #2: However, this time around, we are even better placed than in previous cycles, our strong balance sheet, higher investment income, and the steadily growing earnings contribution from businesses that are largely insulated from the P&C reinsurance cycle enable us to navigate the softer market environment from a position of strength.

Speaker #1: However, this time around, we are even better placed than in previous cycles. Our strong balance sheet, higher investment income, and a steadily growing earnings contribution from businesses that are largely insulated from the P&C reinsurance cycle enable us to navigate the softer market environment from a position of strength.

Speaker #2: This gives us the flexibility to walk away from business where prices do not meet our profitability requirements, while valuing long-term client relationships. Anyway, over the medium term, we see a compelling case for P&C reinsurance supply and demand becoming more evenly balanced again.

Speaker #1: This gives us the flexibility to walk away from businesses where prices do not meet our profitability requirements, while still valuing long-term client relationships. Anyway, over the medium term, we see a compelling case for property and casualty reinsurance supply and demand becoming more evenly balanced again.

Speaker #2: Finally, our strong solvency position of more than 300% provides substantial flexibility in managing capital. We remain committed to returning excess capital to shareholders through growing dividends and share buybacks.

Speaker #1: Finally, our strong solvency position of more than 300% provides substantial flexibility in managing capital. We remain committed to returning excess capital to shareholders through growing dividends and share buybacks.

Speaker #2: Together, these strengths underpin our ambition to deliver a return on equity of more than 18% and average annual earnings per share growth of more than 8%.

Christoph Jurecka: This gives us the flexibility to walk away from business where prices do not meet our profitability requirements while valuing long-term client relationships. Anyway, over the medium term, we see a compelling case for P&C reinsurance supply and demand becoming more evenly balanced again. Finally, our strong solvency position of more than 300% provides substantial flexibility in managing capital. We remain committed to returning excess capital to shareholders through growing dividends and share buybacks. Together, these strengths underpin our ambition to deliver a return on equity of more than 18% and average annual earnings per share growth of more than 8%. In summary, the targets of our Ambition 2030 remain fully intact. With that, I hand it over to Andrew, who will guide you through our Q2 figures in more detail.

Speaker #1: Together, these strengths underpin our ambition to deliver a return on equity of more than 18% and average annual earnings per share growth of more than 8%.

Speaker #2: In summary, the targets of our ambition 2030 remain fully intact. With that, I hand it over to Andrew, who will guide you through our Q2 figures in more detail.

Speaker #1: In summary, the targets of our Ambition 2030 remain fully intact. With that, I hand it over to Andrew, who will guide you through our Q2 figures in more detail.

Speaker #1: Thank you very much, Christoph, and ladies and gentlemen, good morning from me as well. A quick logistical comment up front. For my remarks, I will not refer to any further specific slides in the pack, which is available to all of you on our website.

Speaker #2: Thank you very much, Christoph. Ladies and gentlemen, good morning from me as well. A quick logistical comment up front: for my remarks, I will not refer to any further specific slides in the pack, which is available to all of you on our website.

Speaker #1: I will just verbally expand on the financial performance of the quarter and the half year. And I start by echoing what Christoph said earlier.

Speaker #2: I will just verbally expand on the financial performance of the quarter and the half-year. And I'll start by echoing what Christoph said earlier: our diversified business model underpins sustainable earnings over time.

Speaker #1: Our diversified business model underpins sustainable earnings over time. In the short term, P&C reinsurance once again benefited from a benign major loss environment, putting us on a strong course towards our earnings target for this year.

Speaker #2: In the short term, P&C reinsurance once again benefited from a benign major loss environment, putting us on a strong course toward our earnings target for this year.

Andrew Buchanan: Thank you very much, Christoph. Ladies and gentlemen, good morning from me as well. A quick logistical comment up front. For my remarks, I will not refer to any further specific slides in the pack, which is available to all of you on our website. I will just verbally expand on the financial performance of the quarter and the half year. I start by echoing what Christoph said earlier. Our diversified business model underpins sustainable earnings over time. In the short term, P&C Reinsurance once again benefited from a benign major loss environment, putting us on a strong course towards our earnings target for this year. In an environment where the reinsurance cycle is showing signs of softening and underlying earnings in P&C Reinsurance are beginning to reflect the terms achieved in recent renewals, the profitability of this segment remains healthy.

Speaker #1: But in an environment where the reinsurance cycle is showing signs of softening, and underlying earnings in P&C reinsurance are beginning to reflect the terms achieved in recent renewals, the profitability of this segment remains healthy.

Speaker #2: But in an environment where the reinsurance cycle is showing signs of softening and underlying earnings in P&C reinsurance are beginning to reflect the terms achieved in recent renewals, the profitability of this segment remains healthy.

Speaker #1: And the benefits of diversification are becoming increasingly evident as strong earnings contributions from our other business segments enhance the resilience of the group's operating performance.

Speaker #2: And the benefits of diversification are becoming increasingly evident, as strong earnings segments enhance the resilience of the group's operating performance. In addition, a strong investment result complemented the sustained strength of our technical results.

Speaker #1: In addition, a strong investment result complemented the sustained strength of our technical results. In summary, this resulted in a strong second quarter net profit of 2.2 billion euros, as pre-announced two weeks ago, and together with the very pleasing Q1 result, Munich RE remains firmly on track to achieve its full year 2026 targets of 6.3 billion euros.

Speaker #2: In summary, this resulted in a strong second quarter net profit of €2.2 billion, as pre-announced two weeks ago. Together with the very pleasing Q1 result, Munich Re remains firmly on track to achieve its full-year 2026 target of €6.3 billion.

Speaker #1: Against this backdrop, let's now take a closer look at the Q2 earnings drivers, starting with the investment result. The return on investment of 5.5% benefited from favorable capital market conditions, with strong contributions from public and private equity investments.

Speaker #2: Against this backdrop, let's now take a closer look at Q2 earnings drivers, starting with the investment result. The return on investment of 5.5% benefited from favorable capital market conditions, with strong contributions from public and private equity investments.

Andrew Buchanan: The benefits of diversification are becoming increasingly evident as strong earnings contributions from our other business segments enhance the resilience of the group's operating performance. In addition, a strong investment result complemented the sustained strength of our technical results. In summary, this resulted in a strong Q2 net profit of €2.2 billion, as pre-announced two weeks ago. Together with the very pleasing Q1 result, Munich RE remains firmly on track to achieve its full year 2026 target of €6.3 billion. Against this backdrop, let's now take a closer look at the Q2 earnings drivers, starting with the investment result. The return on investment of 5.5% benefited from favorable capital market conditions with strong contributions from public and private equity investments.

Speaker #1: The running yield of 4% was supported by higher interest rates, dividend seasonality, and a catch-up effect from inflation-linked bonds, that I talked about already with our Q1 results.

Speaker #2: The running yield of 4% was supported by higher interest rates, dividend seasonality, and a catch-up effect from inflation-linked bonds that I talked about already with our Q1 results.

Speaker #1: The reinvestment yield remained high at 4.3%, providing continued support for the running yield. And with an overall return on investment of 4.2% in the first half year, we are comfortably within our full-year guidance of greater than 3.5%.

Speaker #2: The reinvestment yield remained high at 4.3%, providing continued support for the running yield. And with an overall return on investment of 4.2% in the first half-year, we are comfortably within our full-year guidance of greater than 3.5%.

Speaker #1: Now I turn to the business fields, starting with reinsurance. The life and health reinsurance total technical results of 528 million in Q2 came in above the pro-rata annual ambition.

Speaker #2: Now I turn to the business fields, starting with reinsurance. The life and health reinsurance total technical result of €528 million in Q2 came in above the pro-rata annual ambition.

Andrew Buchanan: The running yield of 4% was supported by higher interest rates, dividend seasonality, and a catch-up effect from inflation-linked bonds that I talked about already with our Q1 results. The reinvestment yield remained high at 4.3%, providing continued support for the running yield. With an overall return on investment of 4.2% in the H1, we are comfortably within our full year guidance of greater than 3.5%. Now I turn to the business fields, starting with reinsurance. The Life & Health Reinsurance total technical results of EUR 528 million in Q2 came in above the pro rata annual ambition. The release of the CSM and risk adjustment was in line with expectations, while mortality experience was slightly positive. The result from insurance-related financial instruments developed very favorably, supported by large transactions completed in the H2 2023.

Speaker #1: The release of the CSM and risk adjustment was in line with expectations, while mortality experience was slightly positive. The result from insurance-related financial instruments developed very favorably, supported by large transactions completed in the second half of last year.

Speaker #2: The release of the CSM and risk adjustment was in line with expectations, while mortality experience was slightly positive. The result from insurance-related financial instruments developed very favorably, supported by large transactions completed in the second half of last year.

Speaker #1: It is very pleasing that the stock of life CSM continues to grow, having now reached 16 billion euros, driven by solid new business generation and with some help from positive currency effects, providing a strong foundation for sustainably high technical results in the coming periods.

Speaker #2: It is very pleasing that the stock of life CSM continues to grow, having now reached €16 billion, driven by solid new business generation and with some help from positive currency effects, providing a strong foundation for sustainably high technical results in the coming periods.

Speaker #1: Being ahead of the pro-rata total technical result guidance after the first half year, we are well on track to achieve our full-year targets in life and health reinsurance.

Speaker #2: Being ahead of the pro-rata total technical result guidance after the first half-year, we are well on track to achieve our full-year targets in life and health reinsurance.

Speaker #1: Now in P&C reinsurance, we posted a strong Q2 result with a combined ratio of 68.9%, once again benefiting from very low major losses. Reserve releases amounted to the expected 6 percentage points in the combined ratio, now in our Q1 earnings call, we had already mentioned upward pressure on the normalized combined ratio, and in Q2 the ratio increased to around 82%, reflecting the gradual earn-in of recent renewals, as well as the writing of a large new structured transaction.

Speaker #2: Now, in P&C reinsurance, we posted a strong Q2 result with a combined ratio of 68.9%, once again benefiting from very low major losses. Reserve releases amounted to the expected 6 percentage points in the combined ratio. Now, in our Q1 earnings call, we had already mentioned upward pressure on the normalized combined ratio, and in Q2 the ratio increased to around 82%, reflecting the gradual earn-in of recent renewals as well as the writing of a large new structured transaction.

Andrew Buchanan: It is very pleasing that the stock of Life CSM continues to grow, having now reached €16 billion, driven by solid new business generation and with some help from positive currency effects, providing a strong foundation for sustainably high technical results in the coming periods. Being ahead of the pro rata total technical result guidance after the H1, we are well on track to achieve our full year targets in Life & Health Reinsurance. Now in P&C Reinsurance, we posted a strong Q2 result with a combined ratio of 68.9%, once again benefiting from very low major losses. Reserve releases amounted to the expected six percentage points in the combined ratio.

Speaker #2: Looking ahead, we would expect the 82% to continue trending upwards over the remainder of the year. At this point, I would also like to comment on top lines, so revenue.

Speaker #1: Looking ahead, we would expect the 82% to continue trending upwards over the remainder of the year. At this point, I would also like to comment on top line, so revenue.

Speaker #2: As Christoph already highlighted, we now expect insurance revenue in the reinsurance business field overall to be €2 billion lower than the original guidance of €40 billion.

Speaker #1: As Christoph already highlighted, we now expect insurance revenue in the reinsurance business field overall to be 2 billion lower than the original guidance of 40 billion.

Speaker #2: I mention it now because this reduction is largely attributable to P&C reinsurance, where in the first half of the year, revenue declined by €1.4 billion versus the prior year period.

Speaker #1: I mention it now because this reduction is largely attributable to P&C reinsurance, where in the first half of the year revenue declined by 1.4 billion versus the prior period, the prior year period.

Andrew Buchanan: Now in our Q1 earnings call, we had already mentioned upward pressure on the normalized combined ratio, and in Q2, the ratio increased to around 82%, reflecting the gradual earn in of recent renewals, as well as the writing of a large new structured transaction. Looking ahead, we would expect the 82% to continue trending upwards over the remainder of the year. At this point, I would also like to comment on top line, so revenue. As Christoph already highlighted, we now expect insurance revenue in the reinsurance business field overall to be EUR 2 billion lower than the original guidance of EUR 40 billion. I mention it now because this reduction is largely attributable to P&C Reinsurance, where in H1, revenue declined by EUR 1.4 billion versus the prior year period.

Speaker #2: And roughly one-third of the decrease was driven by currency movements, but it is mainly the result of disciplined underwriting decisions to protect the quality and profitability of the portfolio.

Speaker #1: And roughly one-third of the decrease was driven by currency movements, but it is mainly the result of disciplined underwriting decisions to protect quality and profitability of the portfolio.

Speaker #2: Importantly, this adjustment to our top-line guidance does not affect our earnings outlook for the full year. So, all in all, with a combined ratio for P&C Re of just below 68% after six months, we are heading with tailwind into the hurricane season.

Speaker #1: Importantly, this adjustment to our top line guidance does not affect our earnings outlook for the full year. So all in all, with a combined ratio for P&C RE of just below 68% after six months, we are heading with tailwind into the hurricane season.

Speaker #2: I now conclude the reinsurance part of my remarks with global specialty insurance, which delivered a pleasing result again. On a reported basis, revenue declined by around 3% compared with the first half of 2025.

Speaker #1: I now conclude the reinsurance part of my remarks with global specialty insurance, which delivered a pleasing result again. On a reported basis, revenue declined by around 3% compared with the first half of 2025.

Andrew Buchanan: Roughly one third of the decrease was driven by currency movements, but it is mainly the result of disciplined underwriting decisions to protect quality and profitability of the portfolio. Importantly, this adjustment to our top-line guidance does not affect our earnings outlook for the full year. All in all, with a combined ratio for P&C Re of just below 68% after H1, we are heading with tailwind into the hurricane season. I now conclude the reinsurance part of my remarks with Global Specialty Insurance, which delivered a pleasing result again. On a reported basis, revenue declined by around 3% compared with H1 2025. However, adjusted for currency, especially U.S. dollar and accounting-related effects, organic growth was positive and closer to the lower end of the Ambition 2030 annual growth range of 5% to 9%.

Speaker #2: However, adjusted for currency—especially the US dollar—and accounting-related effects, organic growth was positive and closer to the lower end of the Ambition 2030 annual growth range of 5% to 9%.

Speaker #1: However, adjusted for currency, especially US dollar, and accounting-related effects, organic growth was positive, and closer to the lower end of the ambition 2030 annual growth range of 5% to 9%.

Speaker #2: The combined ratio of 88.9% was largely in line with expectations, and with a first half-year combined ratio of 86.3%, we are again well on track to meet our full-year guidance in this segment too.

Speaker #1: The combined ratio of 88.9% was largely in line with expectations, and with a first half-year combined ratio of 86.3%, we are again well on track to meet our full-year guidance in this segment too.

Speaker #2: Now, coming to the primary insurance arm of the group, ERGO delivered a strong net result of €321 million, with a significant contribution from the high investment result.

Speaker #1: Now coming to the primary insurance arm of the group, ELGO delivered a strong net result of 321 million euros, with a significant contribution from the high investment result.

Speaker #2: ELGO Germany recorded a very strong segment net result of €235 million. In P&C, ELGO achieved good technical profitability, and took a prudent approach to reserving in order to continue building balance sheet strength.

Speaker #1: ELGO Germany recorded a very strong segment net result of 235 million. In P&C, ELGO achieved good technical profitability, and took a prudent approach to reserving, in order to continue building balance sheet strength.

Andrew Buchanan: The combined ratio of 88.9% was largely in line with expectations. With a H1 combined ratio of 86.3%, we are again well on track to meet our full year guidance in this segment, too. Now coming to the primary insurance arm of the group, ERGO delivered a strong net result of EUR 321 million with a significant contribution from the high investment result. ERGO Germany recorded a very strong segment net result of EUR 235 million. In p&c, ERGO achieved good technical profitability and took a prudent approach to reserving in order to continue building balance sheet strength. In addition, the p&c business benefited from a strong performance of its private equity investments. Life & Health in Germany had a solid quarter and developed in line with expectations, including growth in the Life new book. The ERGO International business achieved a strong net result of EUR 86 million.

Speaker #2: In addition, the P&C business benefited from a strong performance of its private equity investments. Life and health in Germany had a solid quarter and developed in line with expectations, including growth in the life new book.

Speaker #1: In addition, the P&C business benefited from a strong performance of its private equity investments. Life and health in Germany had a solid quarter and developed in line with expectations, including growth in the life new book.

Speaker #2: The ELGO international business achieved a strong net result of €86 million. The international life and health business was in line with expectations, showing a stable, high CSM release and new contracts added, driven in particular by Spain and by the Belgium health business.

Speaker #1: The ELGO international business achieved a strong net result of 86 million euros. The international life and health business was in line with expectations, showing a stable high CSM release, and new contracts added, driven in particular by Spain and by Belgium health business.

Speaker #2: In the international P&C business of ELGO, the technical profitability and combined ratio were overall within the range of expectations, with especially pleasing performance in major markets like Poland and Spain.

Speaker #1: In the international P&C business of ELGO, the technical profitability and combined ratio were overall within the range of expectations, with especially pleasing performance in major markets like Poland and Spain.

Speaker #2: Also, not to forget, ELGO Next in the USA is progressing well in business development and integration. Finally, a remark on the group’s economic solvency position, which remains very strong.

Speaker #1: Also, not to forget, ELGO Next in the USA is progressing well in business development and integration. Finally, a remark on the group's economic solvency position, which remains very strong.

Speaker #2: The Solvency II ratio increased to 304% in Q2, driven by the very pleasing operating performance I have just described. With this, I am at the end of my opening remarks.

Andrew Buchanan: The International Life & Health business was in line with expectations, showing a stable, high CSM release and new contracts added, driven in particular by Spain and by Belgium health business. In the international p&c business of ERGO, the technical profitability and combined ratio were overall within the range of expectations, with especially pleasing performance in major markets like Poland and Spain. Also, not to forget, ERGO Next in the USA is progressing well in business development and integration. Finally, a remark on the group's economic solvency position, which remains very strong. The Solvency II ratio increased to 304% in Q2, driven by the very pleasing operating performance I have just described. With this, I am at the end of my opening remarks. Christoph and I look forward to answering your questions. First, I hand back to Stefan.

Speaker #1: The solvency two ratio increased to 304% in Q2, driven by the very pleasing operating performance I have just described. With this, I am at the end of my opening remarks.

Speaker #2: Christoph and I look forward to answering your questions. But first, I hand back to Stefan.

Speaker #1: Christoph and I look forward to answering your questions. But first, I hand back to Stefan.

Speaker #1: Thank you for the presentation, Christoph and Andrew. We will now start the Q&A session. If you would like to ask a question, please raise your hand virtually. After I call on you, we will activate your microphone.

Speaker #2: Thank you for the presentation, Christoph and Andrew. The next financial results will be presented on 12 November 2026, when we will present Munich RE's Q3 figures.

Speaker #1: Please also turn on your camera yourself, state your name, and the media outlet you represent before asking your questions. Thank you. And I think we already have the first question.

Speaker #2: In the meantime, we are happy to stay in contact with you, of course. Having said this, I close this media call. I wish you all the best.

Speaker #1: From Mr. Hübner, please.

Speaker #3: No, thank you. Good morning. Sorry, I haven't got any camera available at the moment, so you'll have to just imagine my face. Sorry. It's two questions from me.

Stefan Golling: Thank you for the presentation, Christoph and Andrew. We now start with the Q&A session. If you'd like to raise a question, please raise your hand virtually, and after I call on you, we will activate your microphone. Please also turn on your camera yourself, state your name and the media outlet you represent before asking your questions. Thank you. I think we already have the first question. From Mr. Huebner, please.

Speaker #3: Quite a bit special. The one is on heat. There is a discussion in Germany at the moment about the heat wave—the rising heat waves causing more deaths of elderly people, and so on.

Speaker #3: Do you, as a reinsurer, see some signs of this in mortality—namely, probable excess mortality? Or is this just within the normal range?

[Analyst 1]: Now. Thank you. Good morning. Sorry, I haven't got any camera available at the moment, so you have to just imagine my face. Sorry. It's two questions for me, quite a bit special. The one is on heat. There is a discussion in Germany at the moment about the rising heat waves causing more deaths of elderly people and so on. Do you, as a reinsurer, see some signs of this in mortality, in a probable excess mortality, or is this just within the normal range? The second question is on your investments. There has been some movements in the Amprion shareholder base, which you or respectively, MEAG is part of. Can you tell me whether you already have reduced your stake given the high capital expenditure over the next years, or are you planning to change your position there? Thank you.

[Analyst]: Now. Thank you. Good morning. Sorry, I haven't got any camera available at the moment, so you have to just imagine my face. Sorry. It's two questions for me, quite a bit special. The one is on heat. There is a discussion in Germany at the moment about the rising heat waves causing more deaths of elderly people and so on. Do you, as a reinsurer, see some signs of this in mortality, in a probable excess mortality, or is this just within the normal range? The second question is on your investments. There has been some movements in the Amprion shareholder base, which you or respectively, MEAG is part of. Can you tell me whether you already have reduced your stake given the high capital expenditure over the next years, or are you planning to change your position there? Thank you.

Speaker #3: And the second question is on your investments. There has been some movement in the Amprion shareholder base, of which you, or respectively MEAG, are a part.

Speaker #3: Can you tell me whether you have already reduced your stake in the high capital expenditure over the next years, or are you planning to change your position there?

Speaker #3: Thank you.

Speaker #1: Yeah. Mr. Hübner, good morning. Christoph Jurecka speaking here. I think it's no problem with your camera; I can very well imagine your face, so no worries about that.

Speaker #1: Maybe on your first question, heat waves. I mean, you read about it in the papers every day nowadays, and there's also clear scientific evidence that the amount of heat we are experiencing in many regions of the world right now is affecting mortality rates and is particularly difficult for people who have to deal with certain conditions, people who are not as fit as others.

Speaker #1: And, of course, also elderly people. So there is clear scientific evidence for that. I mean, if you look at the size of our business and also how we do the underwriting, it would be too early to see something concretely already now in the numbers, but we will certainly look into that in the course of the year a bit deeper, then.

Christoph Jurecka: Mr. Huebner, good morning. Christoph Jurecka speaking here.

Christoph Jurecka: I think it's no problem with the camera. I can very well imagine your face. No worries with that. Maybe on your first question, heatwave. You read it in the papers every day nowadays. There's also clear scientific evidence that the amount of heat we are experiencing in many regions of the world right now is affecting mortality rates and is particularly difficult for people who have to deal with certain conditions, people who are not as fit as some others, and of course, also elderly people. There's clear scientific evidence for that. If you look at the size of our business and also how we do the underwriting, it will be too early to see something concretely already now in the numbers, but we'll certainly look into that in the course of the year a bit deeper then. For currently, it's too early.

Speaker #1: But currently, it's too early. On the investment side, Amprion—it's great to see that this is an investment which is getting a lot of attention right now, and a lot of interest.

Speaker #1: I would still rather not comment, as we never do comment on individual investments which we hold.

Speaker #2: Thank you. Next one.

Speaker #3: Okay. Thank you.

Speaker #1: Thank you. Next one is Ms. Krieger, please. Ms. Krieger, we can't hear you—you're on mute, I think. Yeah, there seems to be a technical issue here.

Christoph Jurecka: On the investment side, Amprion, it's great to see that this is an investment which gets a lot of attention right now and a lot of interest. I would still rather not comment, as we never do comment on individual investments which we hold. Thank you. Next one.

Speaker #4: One moment. Is it working now? Can you hear me now?

Speaker #1: Okay. Yes.

[Analyst 1]: Okay. Thank you.

[Analyst]: Okay. Thank you.

Speaker #4: okay.

Speaker #1: Please continue.

Stefan Golling: Thank you. Next one is Miss Krieger, please. Miss Krieger, we can't hear you. You're on mute, I think. There seems to be a technical issue here.

Speaker #4: Thank you. Yes, my name is Friederike Krieger from Versicherungsmonitor. I have two questions. You are expecting less turnover but maintaining the same profit guidance. How does this work out?

Speaker #4: Can you elaborate a little bit on this? And I was wondering, these job cuts at ERGO—what's going on?

Speaker #1: Yeah. And why not? You take the first, and I’ll comment on ERGO then.

Speaker #4: Yes.

Speaker #2: So, Ms. Krieger, on the revenue guidance point, we have been separately forecasting, as we go through the year, the profit that we expect to generate in terms of technical result and the revenue.

Speaker #2: And as you may know, over the first two quarters of the year, we've benefited from very good underwriting results, which put us in a situation where we are actually, let's say, able to meet our full-year profit guidance, even if the revenue ends up being lower.

Friederike Krieger: One moment. Now?

Friederike Krieger: Okay.

Friederike Krieger: Can you hear me now?

Stefan Golling: Yes.

Stefan Golling: Okay.

Stefan Golling: Please continue.

Friederike Krieger: Thank you. Yeah, my name is Friederike Krieger from Versicherungsmonitor. I have two questions. You are expecting less turnover, but the same profit guidance. How does this work out? Can you elaborate a little bit on this? I was wondering, these job cuts at ERGO, how this going on?

Speaker #2: The important thing to bear in mind is that some of our revenue comes with very thin profit margins, while other revenue comes with high profit margins.

Speaker #2: And certainly, much of the business that has been reduced is proportional in nature, with very thin profit margins, so it has not impacted us as much in terms of the bottom line.

Andrew Buchanan: Shall I take the first one? Yeah. Why not? You take the first, I comment on ERGO then. Yes. Miss Krieger, on the revenue guidance point. We have been separately forecasting as we go through the year, the profit that we expect to generate in terms of technical results and the revenue. As you may know, over the first two quarters of the year, we've benefited from very good underwriting results, which has put us in a situation where we are actually, let's say, able to meet our full-year profit guidance, even if the revenue ends up being lower. The important thing to bear in mind is that some of our revenue comes with very thin profit margins, and other comes with high profit margins.

Speaker #2: And so we're in a position, luckily now, where we're able to say that if we have a normal hurricane season, in particular for the rest of the year, then we will hit our profit targets.

Speaker #1: And on the ERGO question—so, regarding the FTE reduction, Mrs. Krieger would like to remind you that this is a five-year activity, a five-year plan. Therefore, with only two quarters in, it wouldn't make much sense to give an update on that.

Speaker #1: I mean, in any case, it's a long-term activity, so I cannot comment any more on that.

Christoph Jurecka: Certainly, enough of the business that has been reduced is proportional in nature with very thin profit margins that it has not hurt us as much in terms of the bottom line. We're in a position, luckily now, where we're able to say that if we have a normal hurricane season, in particular for the rest of the year, then we will hit our profit targets. On the ERGO question, the FTE reduction, Miss Krieger, I would like to remind you, this is a five-year activity, a five-year plan. Therefore, only two quarters in. It wouldn't make so much sense to give an update on that. In any case, it's long-term activity, so I cannot comment any more on that. Thank you. The next question comes from Ben Dyson, please.

Speaker #2: Thank you. Then the next question comes from Ben Dyson, please.

Speaker #4: Oh, hi. Good morning. Yes, I've got a couple of questions, if I may. One was just on—again, just going back to the revenue reduction guidance, or the reduction in revenue guidance, rather.

Speaker #4: Just be interested if why that's been done now, if you've seen, I guess, a marked deterioration in market conditions, for example. Or yeah, just if you could say a little bit more about your what that says about your Munich RE thinking about the state of the P&C reinsurance market would be great.

Speaker #4: And, yeah, the second question I have was: Mr. Jurecka, you mentioned that there will be an eventual rebalancing of supply and demand in P&C reinsurance.

Speaker #4: I'm just interested in what you think drives that. Was it just you saying that that's naturally what happens over time, or are you seeing signs that that's starting to happen?

Speaker #4: If you could comment more on that, that would be great. Thank you.

Speaker #2: Good morning, Ben. It's Andrew here, Andrew Buchanan. I'll take the first one about revenue and the timing. So what I would say to you is, in Q1, the revenue that we reported then was below one quarter of the run rate—or one quarter of the annual guidance, let's say.

Ben Dyson: Well, hi, good morning. Yes, I've got a couple of questions, if I may. One was just on the, again, just going back onto the revenue reduction guidance or the reduction in revenue guidance, rather. Just be interested if, why that's been done now, if you've seen, I guess, a marked deterioration in market conditions, for example. Yeah, just want to see if you can say a little bit more about what that says about your community's thinking about the state of the P&C Reinsurance market would be great. Yeah. The second question I have was, Mr. Jurecka, you mentioned that there will be an eventual rebalancing of supply and demand in P&C Reinsurance. Just be interested in what you think will drive that. Was that just you saying that that's naturally what happens over time, or are you seeing signs that that's starting to happen?

Speaker #2: So it was, if you take the original €40 billion divided by four, you would simplistically say we needed €10 billion per quarter to hit our guidance.

Speaker #2: And in Q1, we were below that. But there were some special effects, in particular, accounting true-ups relating to prior years. And we also knew that there was more growth coming later in the year.

Speaker #2: So at that stage, it wasn't fully clear to us whether the catch-up effects that we would then have through the rest of the year would get us all the way to the €40 billion or not.

Speaker #2: So it was a bit too early to make a call. Although we did already, at Q1, have one or two people ask us about our confidence level.

Ben Dyson: If you could comment more on that would be great. Thank you.

Andrew Buchanan: Good morning, Ben. It's Andrew here. Andrew Buchanan. I'll take the first one about revenue and the timing. What I would say to you is, in Q1, the revenue that we reported then was below one quarter of the run rate, or one quarter of the annual guidance, let's say. It was.

Speaker #2: What has now happened in Q2 is that revenue did indeed grow. So revenue in Q2 is a bit higher than in Q1, but it probably hasn't accelerated by enough to make us confident of getting to the full €40 billion.

Speaker #2: What we have been able to do, though, is take into account a number of things that we know are coming in the second half of the year, like a large new structured transaction in P&C reinsurance that I mentioned, but also certain other deals that are a bit more backloaded.

Andrew Buchanan: If you take the original EUR 40 billion, divide by four, you would simplistically say we needed EUR 10 billion per quarter to hit our guidance. In Q1, we were below that. There were some special effects, in particular, some accounting true-ups relating to prior years. We also knew that there was more growth coming in later in the year. At that stage, it wasn't fully clear to us whether the catch-up effect that we would then have through the rest of the year would get us all the way to the EUR 40 billion or not. It was a bit too early to make a call, although we did already at Q1 have one or two people ask us about our confidence level. What has now happened in Q2, is that revenue did indeed grow.

Speaker #2: And now, having gone through all the renewal dates and having pretty much substantially all the renewal results available, we're in a much better position to forecast more precisely where we land at the end of the year, and we took the view that €40 billion is now too much of a stretch, and we needed to step back from that.

Speaker #2: Whereas €38 billion, I would say, is now a very—it's a comfortable, responsible number that we feel good about hitting. But it wasn't one single thing that suddenly changed the story.

Speaker #2: It was more the cone of uncertainty reducing as we go through the year.

Andrew Buchanan: Revenue in Q2 is a bit higher than Q1, but it probably hasn't accelerated by enough to make us confident of getting to the full EUR 40 billion. What we have been able to do though, is take into account a number of things that we know are coming in H2, like a large new structured transaction in P&C Re, that I mentioned, but also, certain other deals that are a bit more backloaded. Now having gone through all the renewal dates and having pretty much substantially all the renewal results available, we're in a much better position to forecast more precisely where we land at the end of the year. We took the view that EUR 40 billion is now too much of a stretch, and we needed to step back from that.

Speaker #1: And Ben, I'm happy to take your question on supply and demand. Mike, the comment I made in my introduction was not long-term, it's mid to long-term. And more specifically, if you look at the demand first, maybe together with me, there are plenty of reasons.

Speaker #1: Why are we so convinced that the demand can only go up going forward? This has to do with the famous insurance gaps we still see in many areas.

Speaker #1: There are a lot of uninsured risks in the world. There are new risks which are not, to a large extent, insured at this point in time.

Speaker #1: I think the most famous one is still cyber. You can think about AI. You can think about data centers. I mean, there's just a lot of risk which needs cover and requires cover going forward.

Andrew Buchanan: Whereas EUR 38 billion, I would say, it's a comfortable, responsible number that we feel good about hitting. It wasn't one single thing that suddenly changed the story. It was more the cone of uncertainty reducing as we go through the year.

Speaker #1: Climate change is clearly increasing the expected claims. We see a long-term trend, which will not stop. So, there are plenty of reasons why the demand will go up.

Speaker #1: On the supply side, at the same time, I think the entire industry has been benefiting significantly, in that we didn't see a lot of loss activity in recent quarters.

Christoph Jurecka: Ben, I'm happy to take your question on supply and demand. The comment I made in my introduction was meant long term, mid to long term. More specifically, if you look at the demand first, maybe together with me, there's plenty of reasons why we are very convinced that the demand can only go up also going forward. This has to do with the famous insurance gaps we see in many societies still. There's a lot of uninsured risks in the world. There are new risks, which are, not to a large extent insured at this point in time. I think the most famous one is still cyber. You can think about AI, you can think about data centers. There's just a lot of risk, which needs cover and requires cover going forward. Climate change is clearly increasing the expected claims.

Speaker #1: For quite some time, in the meantime, there’s a lot of capital around, which, in a more normalized development of the industry overall, obviously would be needed for losses.

Speaker #1: We cannot hope for having such benign claims experiences forever. So, this will normalize over time as well. And therefore, the equilibrium will just go back to where it used to be, to a more balanced equilibrium between supply and demand.

Speaker #1: Having said that, you also asked about the short-term, and there I would like to underline that the market is still in good shape. If I look at the profitability levels in the market currently, we are at levels maybe similar to how they were in the year 2021.

Christoph Jurecka: We see a long-term trend which will not stop. There's plenty of reasons why the demand will go up. On the supply side, at the same time, I think the entire industry has been benefiting significantly that we didn't see a lot of loss activity in recent quarters, for quite some time in the meantime. There's a lot of capital around, which in a more normalized development of the industry overall, obviously would be needed for losses. We cannot hope for having such benign claims experiences forever. This will normalize over time as well, therefore the equilibrium will just go back to where it used to be, to more balanced equilibrium between supply and demand. Having said that, you also asked short term, there I would like to underline the market is still in good shape.

Speaker #1: Which is attractive. So, therefore, also even today, we have a lot of business. And we are able to renew a lot of business and even write a lot of new business.

Speaker #1: With attractive terms and conditions, and margins. Therefore, currently, the industry is still in good shape, and the market environment is still in good shape.

Speaker #1: For the near future, we would expect that to stay like that, more or less. But, as always in our business, it will be very path-dependent.

Speaker #1: And very much, for example, it will also depend on how the hurricane season evolves this year.

Speaker #4: Thank you very much.

Speaker #2: Thank you. The next question in the call comes from Mr. List from Börsen-Zeitung. Please go ahead.

Speaker #4: Yes. Could you perhaps elaborate a little bit on global, especially insurance? You mentioned new opportunities, for example, in US real estate and professional liability, and in European security.

Christoph Jurecka: If I look at the profitability level in the markets, currently we are at the levels, maybe similar to the levels how they were in the year 2021, which is attractive. Therefore, also even today, we have a lot of business, and we are able to renew a lot of business and even write a lot of new business, with attractive terms and conditions and margins. Therefore, currently, the industry is still in good shape and the market environment is still in good shape. For the nearer future, we would expect that to stay like that, more or less, as always in our business, it will be very path dependent and very much, for example, also depend on how the hurricane season will evolve this year.

Speaker #4: Perhaps you can say a little bit more about these businesses.

Speaker #1: Yes, Mr. List. Good morning. Thank you. I think what matters here is that there are still plenty of opportunities for our GSI business.

Speaker #1: So, as I said in my introduction, the colleagues are constantly looking into growth opportunities, be it geographically or in business lines where we haven't deployed so much capital up to now.

Speaker #1: And where the markets are attractive. And in the examples I mentioned, they are then either geographical. So, Global Specialty is still a business which today is very much focusing on the Anglo-Saxon world—specifically the United States and the UK.

Andrew Buchanan: Thank you very much.

Stefan Golling: Thank you. The next question in the call comes from Mr. List from Börsen-Zeitung. Please go on.

Speaker #1: So, there are a number of initiatives going on to expand that business—for example, into Europe, but also into Australia, for example. And surety is a business line which is currently on the top of our minds when it comes to this European expansion.

Thomas List: Yes, could you perhaps elaborate a little bit, in Global Specialty Insurance, you mentioned new opportunities, for example, in U.S. real estate, professional liability, and Europe surety. Perhaps you can say a little bit more about these businesses.

Speaker #1: Similarly, in the United States, we're looking into business lines, for example, where we can grow and grow into attractive markets, and professional liability, and specifically in the real estate space is an area which the colleagues identified as being attractive.

Christoph Jurecka: Yes, Mr. List. Good morning. Thank you. I think what matters here is that there is plenty of opportunities still also for our GSI business. As I said in my introduction, the colleagues are constantly looking into growth opportunities, be it geographically or be it business lines in which we didn't deploy so much capital right now and where the markets are attractive. The examples I mentioned are then either geographical, so it's Global Specialty, is still a business which is today very much focusing at the Anglo-Saxon world, specifically the United States and UK. There are a number of initiatives going on to expand that business, for example, into Europe, but also into Australia, for example. Surety is a business line which is currently on the top of our heads when it comes to this European expansion.

Speaker #4: Thank you.

Speaker #2: Thank you. The next one here on the call is Mr. — from DPA AFX. Please go ahead.

Speaker #4: Good morning from Frankfurt. Just two questions. One, on the wildfires—even if you aren't able to give us an amount on the losses expected, can you perhaps just give us a range or just more of what to expect so that we have an idea?

Speaker #4: And the second thing is the investment result, which has gone up by more or around a billion. That is about the equity stakes you have.

Christoph Jurecka: Similarly, in the United States, we're looking into business lines, for example, where we can grow and go into attractive markets. Professional liability, and specifically in the real estate space, is an area which the colleagues identified as being attractive.

Speaker #4: Can you give a bit more insight into what the major factor was which drove the result up?

Speaker #1: Mr. Vier, happy to take those questions. It's Andrew Buchanan speaking. Regarding the wildfires—and very unfortunately, at the moment in Europe—you almost have to be more specific, because there are so many different wildfires that seem to be burning.

Thomas List: Thank you.

Stefan Golling: Thank you. The next one here in the call is Mr. Weyr from dpa-AFX. Please go on.

Speaker #1: But if I address the major wildfires in France and Spain that have been in the news so much recently, I'm sorry to say that at this point, I cannot give you a range yet.

Mr. Weyr: Good morning from Frankfurt. Just two questions. One on the wildfires. Even if you know aren't able to give us an amount on the losses expected, can you just give us perhaps a range or just more what to expect, that we have an idea? The second thing is the investment result, which has gone up for more around EUR 1 billion, which is about the equities stakes you have. Can you give a bit more insight what was the major factor which drove the result up?

[Analyst] (dpa-AFX): Good morning from Frankfurt. Just two questions. One on the wildfires. Even if you know aren't able to give us an amount on the losses expected, can you just give us perhaps a range or just more what to expect, that we have an idea? The second thing is the investment result, which has gone up for more around EUR 1 billion, which is about the equities stakes you have. Can you give a bit more insight what was the major factor which drove the result up?

Speaker #1: The event is still evolving, and it's still very early in the loss estimation process. So, I'm afraid I cannot be bold enough to put some numbers out into the public domain.

Speaker #1: I would perhaps go so far as to say that there's no current indication that this would be a particularly large loss event for us.

Speaker #1: But I say that with due caution. As you may know, large parts of the areas that have been burning are not urban areas. They are rather rural, forested areas.

Speaker #1: And the kind of thing that would be more likely to generate very large insured losses, I guess in the primary sector, but then also for us, would be large-scale property damage, particularly of buildings.

Andrew Buchanan: Mr. Weyr, happy to take those questions. It's Andrew Buchanan speaking. Regarding the wildfires, and very unfortunately at the moment in Europe, you almost have to be more specific because there are so many different wildfires that seem to be burning. If I address the major wildfires in France and Spain that have been in the news so much recently. I'm sorry to say that at this point, I cannot give you a range yet. The event is still evolving, and it's still very early in the loss estimation process. I'm afraid I cannot be bold enough to put some numbers out into the public domain. I would perhaps go so far as to say that there's no current indication that this would be a particularly large loss event for us. I say that with due caution.

Speaker #1: At this stage, I don't have any indications that we would have major exposures to agricultural-type damages or, for example, if there were evacuation and relocation costs if a significant urban area had to be evacuated, for example.

Speaker #1: I'm afraid that is about as much detail as I can give you at this point. Coming back to the investment result, you're absolutely right.

Speaker #1: Equity was an important part, and increases in fair values, I think, added about 2% in total to our quarterly investment return. So it was very significant.

Speaker #1: And again, here I have to choose my words carefully because we don't comment on individual investment strategies or individual positions that we would have.

Andrew Buchanan: As you may know, large parts of the areas that have been burning are not urban areas. They are rather rural forested areas. The kind of thing that would be more likely to generate very large insured losses, I guess, in the primary sector, also for us, would be large-scale property damage, particularly of buildings. At this stage, I don't have any indications that we would have major exposures to agricultural-type damages or, for example, if there were evacuation and relocation costs if a significant urban area had to be evacuated, for example. I'm afraid that is about as much detail as I can give you at this point. Coming back to the investment result. You're absolutely right. Equity was an important part, increases in fair values, I think, added about 2% in total to our quarterly investment return. It was very significant.

Speaker #1: I would say to you, though, that on the public equity side, it was quite broad-based. I would not say we are very highly concentrated in any particular parts of the world.

Speaker #1: And the index values, if you just take the index values as an indication, went up across quite a wide range of public market indices.

Speaker #1: And on the private side, all I would say to you there is we've benefited from quite a number of different positions that have increased in value.

Speaker #1: So we have quite a diversified private equity portfolio, and there are quite a number of different mechanisms by which new prices can be established. That can be if a cash offer is made for a stake to be bought by someone and sold by someone, or it could be an IPO.

Speaker #1: It could be a funding round in a private equity enterprise that establishes a new price. So, there are a few different mechanisms, and you put all of those together.

Speaker #1: We've had an excellent quarter, but I wouldn't be able to go into any of the individual strategies.

Speaker #4: Thank you very much.

Speaker #2: Thank you. The next questions come from Mr. Lacour from IFP, please.

Andrew Buchanan: Again, here I have to choose my words carefully because we don't comment on individual investment strategies or individual positions that we would have. I would say to you, though, that on the public equity side, it was quite broad-based. I would not say we are very highly concentrated in any particular parts of the world. The index values, if you just take the index values as an indication, went up across quite a wide range of public market indices. On the private side, all I would say to you there is we've benefited from quite a number of different positions that have increased in value. We have quite a diversified private equity portfolio, there are quite a number of different mechanisms by which new prices can be established.

Speaker #4: Yes, good morning here. So, from Frankfurt, colleague Stephen from DPA. You already asked roughly the question I had on the wildfires, especially in France. But, given the prudent answer you gave, what is your feeling on the protection level of people and businesses confronted with those catastrophes caused by climate change?

Speaker #4: Especially the wildfires. So, is there still a big gap, or can you maybe tell us something about that, especially as far as Europe or France is concerned?

Speaker #4: And can you maybe give a little update on what your activity is on the cat—sorry, the cat bonds? That is one financial instrument, I guess, your company is using or arranging for actors in the market.

Andrew Buchanan: That can be if a cash offer is made for a stake to be bought by someone or sold by someone. It could be an IPO. It could be a funding round in a private equity enterprise that establishes a new price. There are a few different mechanisms, you put all of those together, we've had an excellent quarter. I wouldn't be able to go into any of the individual strategies.

Speaker #4: And it is a good way to mitigate the risk you are confronted with in these kinds of claims. Thank you.

Speaker #1: Yeah. Mr. Lacour, thank you very much. I think I would like to answer your question on the insurance gap a bit more generally than that. Because we always, as a society, I think we always fall into the trap that after a big event—be it a wildfire, be it a flood, be it whatever it is—at a particular moment we are discussing these things.

Mr. Weyr: Thank you very much.

[Analyst] (dpa-AFX): Thank you very much.

Stefan Golling: Thank you. The next questions come from Mr. Lacour from AFP, please.

Mr. Lacour: Yes. Good morning here also from Frankfurt. Colleague Stephan from dpa also asked roughly the questions I had on the wildfires, especially in France. Given the prudent answer you gave, what is your feeling on the protection level of people and businesses confronted with those catastrophes caused by climate change, especially the wildfires? Is there still a big gap, or can you maybe tell something about that, especially as far as Europe or France is concerned?

Jean-Philippe Lacour: Yes. Good morning here also from Frankfurt. Colleague Stephan from dpa also asked roughly the questions I had on the wildfires, especially in France. Given the prudent answer you gave, what is your feeling on the protection level of people and businesses confronted with those catastrophes caused by climate change, especially the wildfires? Is there still a big gap, or can you maybe tell something about that, especially as far as Europe or France is concerned?

Speaker #1: We are discussing this from a very specific angle, while the issue itself is much broader. Given that, with climate change and the increase in natural catastrophes in all regions of the world, these events didn't happen so often in the past.

Speaker #1: We, indeed, as a society, will have to deal with potential insurance gaps. And we think about how we can address them. This is happening in many countries around the world right now.

Speaker #1: You're probably aware of the various forms of private partnerships, which have been established by various countries in the world through very different mechanisms. As Munich Re engages in many of those discussions, our expertise—and we are very open to supporting these kinds of discussions and developments.

Mr. Lacour: Can you give maybe a little update on what is your activity on the cat bonds. That is one financial instrument I guess your company is using or arranging for actors on the market, and it is a good way to dispatch the risk you are confronted with these kind of claims. Thank you.

Jean-Philippe Lacour: Can you give maybe a little update on what is your activity on the cat bonds. That is one financial instrument I guess your company is using or arranging for actors on the market, and it is a good way to dispatch the risk you are confronted with these kind of claims. Thank you.

Speaker #1: Because it would really help society and clients to get the protection they need, which is not always happening to the extent needed.

Christoph Jurecka: Mr. Lecoeur, thank you very much. I think I would like to answer your question on the insurance gap a bit more general than just related to the latest events. As a society, I think we always fall into the trap that after a big event, be it a wildfire, be it a flood, be it whatever it is, at the particular moment we are discussing these things, that we discuss that from a very specific angle, while the issue in itself is a much wider issue. Given that with climate change and with the increase of natural catastrophes in other regions of the world where they didn't happen so often in the past, we indeed as a society will have to deal with potential insurance gaps, and really think about how we can address them. This is happening in many countries of the world right now.

Speaker #1: But also, based on the fact that we are seeing just rapid changes currently—the risks people are facing today are just different compared to 20 years ago.

Speaker #1: And even more so compared to 50 years ago. So this is a rapidly changing environment, where an updated risk assessment on a regular basis is the foundation for setting up structures and developing the right mechanisms to cover these risks.

Speaker #1: As reinsurers, for many of those regions, we are very happy to offer capacity and also more capacity. So there is no shortage of capacity in Europe.

Speaker #1: I mean, still, the European capacity is significantly smaller, for example, when you compare it to the United States. So there is room for that. And, of course, diversification would also help.

Speaker #1: So the issue is not capacity in itself, but the issue is often that the insurance penetration is not high enough. Most importantly, prevention is very important.

Christoph Jurecka: You're probably aware of the various forms of private-public partnerships which have been established by various countries in the world and with very different mechanisms. As Munich RE, we engage in many of those discussions with our expertise and we are very open to support these kinds of discussions and developments, because it would really help also then the society and the clients to get the protection they need, which is not always happening to the extent needed. Also based on the fact that we are seeing just rapid changes currently. The risks people are facing are just different today compared to 20 years ago, and even more compared to 50 years ago. This is a rapidly changing environment also where an updated risk assessment very regularly is the basis then for setting up structures and coming up with the right mechanisms to cover these risks.

Speaker #1: So, before, I mean, it's always better to avoid losses than to be forced to pay for losses, regulate losses, or adjust losses.

Speaker #1: So there's a lot to be done in that context. And again, many, many, many governments are taking this up. But it's something where also the private sector can do much more than what we are currently doing.

Speaker #1: But also, the awareness of clients, of their individual demand, has to go up as well. And I think the insurance industry overall can play a very significant role in that.

Speaker #2: Should I say something about cat bonds, Christoph?

Speaker #1: cat bonds. Yeah, sure.

Speaker #2: Yes, Mr. Lacour, you are correct in your statement that we have sponsored cat bonds in the past, most recently a few years ago.

Speaker #2: As part of our Queen Street series, we do not currently have a cat bond in issue. And you may have heard us comment in our remarks earlier: the Solvency II ratio has now gone above 300%.

Christoph Jurecka: As reinsurers, for many of those regions, we are very happy to offer capacity and also more capacity. There is no shortage in capacity in Europe. Still the European capacity is significantly smaller, for example, when you compare to the United States. There is room for that and, of course, diversification would also help. The issue is not capacity in itself, but the issue is often that the insurance penetration is not high enough. Most importantly, prevention is very important. It's always better to avoid losses than being forced to pay for losses or regulate losses or adjust losses. There's a lot to be done in that context. Again, many governments are taking this up, but it's something where also the private sector can do much more than what we are currently doing.

Speaker #2: We are extremely well capitalized, and we certainly do have the capacity to warehouse and keep all of the risks that we write. So any form of ceding externally of risk that we do, as part of our wider retrocession program, I'd say is a somewhat optional activity for us.

Speaker #2: We underwrite risks very much with the conviction that we underwrite them in such a way that we can keep them for ourselves. And certainly, at the current point in the market, with rates still being adequate, as Christoph described earlier, we are quite happy to retain risk and to earn the full profit margin for risk-bearing ourselves, rather than ceding profits to other parties.

Christoph Jurecka: Also the awareness of clients of their individual demand has to go up also. I think the insurance industry overall can play a very significant role in that.

Speaker #2: Having done the hard work of actually assessing and underwriting the risk.

Andrew Buchanan: Should I say something about cat bonds, Christoph?

Speaker #4: Thank you very much. May I remind you, if you have a question, please raise your hand virtually. The next question comes from Maximilian Folz from Plateau. Please, go ahead.

Christoph Jurecka: Cat bonds. Yeah, sure.

Andrew Buchanan: Yes. Mr. Lecoeur, on cat bonds, you are correct in your statement that we have sponsored cat bonds in the past. Most recently, a few years ago, as part of our Queen Street series. We do not currently have a cat bond in issue, you may have heard us comment in our remarks earlier, the Solvency II ratio has now gone above 300%. We are extremely well capitalized, and we certainly do have the capacity to warehouse and keep all of the risks that we write. So any form of ceding externally of risk that we do as part of our wider retrocession program, I'd say is a somewhat optional activity for us. We underwrite risks very much with the conviction that we underwrite them in such a way that we can keep them for ourselves.

Speaker #3: Thank you for taking my questions. Some have already been discussed, but I hope you can help me with the other three. The first one: What impact do droughts, heat, and aridity have on your life, health, and reinsurance business?

Speaker #3: How are you responding to this? Second one. Has the insurance industry and reinsurers underestimated the risk? Discussions tend to focus on floods and storms in the past.

Speaker #3: And the third question is about another topic—investment. How do you currently assess the markets? Do you see a trend, or—yeah, do you see a trend? And how do you intend to position yourself in the future?

Speaker #3: Thank you very much. I forgot to put my camera on. Sorry. No—sorry.

Speaker #1: Now we see you. Very good. Mr. Folz, I'll start with your question. I think questions one and two are related. The question is, if I may rephrase it: are the trends we see—the increasing losses, the rising effects from climate change, and growing losses in perils which have not been so much under consideration or on everybody's mind in the past—connected?

Andrew Buchanan: Certainly at the current point in the market, with rates still being adequate, as Christoph described earlier, we are quite happy to retain risk and to earn the full profit margin for risk-bearing ourselves rather than ceding profits to other parties, having done the hard work of actually assessing and underwriting the risk.

Speaker #1: What are the impacts of these kinds of events? Wildfires might be one of those, but there are other things happening more often as well.

Stefan Golling: Thank you very much. May I remind you, if you have a question, please raise your hand virtually. Next question comes from Maximilian Voigt from Platow Brief, please.

Speaker #1: If you think about very local storms, hail has gotten more frequent in recent years. I would summarize all of them. All these are effects of the atmosphere heating up.

Maximilian Voigt: Thank you for taking my questions. Some are discussed, but I hope you can help me with the other three. First one, what impact do drought, heat, and aridity have on your life, health, and reinsurance business? How you are responding to this? Second one, has the insurance industry and reinsurers underestimate the risk? The discussions tend to focus on flood and storms in the past. The third question is about another topic, is investment. How do you currently assess the markets? Do you see a trend, and how do you intend to position yourself in the future? Thank you very much. I forgot to put my camera on. Sorry.

Maximilian Volz: Thank you for taking my questions. Some are discussed, but I hope you can help me with the other three. First one, what impact do drought, heat, and aridity have on your life, health, and reinsurance business? How you are responding to this? Second one, has the insurance industry and reinsurers underestimate the risk? The discussions tend to focus on flood and storms in the past. The third question is about another topic, is investment. How do you currently assess the markets? Do you see a trend, and how do you intend to position yourself in the future? Thank you very much. I forgot to put my camera on. Sorry.

Speaker #1: We have higher temperatures, and the statistics and the scientific evidence are very clear that over the last decades, the atmosphere has been heating up more and more.

Speaker #1: And if there is more energy, obviously, this energy can erupt in various ways. You end up having losses from that, or you have a heat wave, or you have these thunderstorms.

Speaker #1: You have tornadoes. Many of these things, traditionally we in the insurance industry would have called secondary perils. So everybody was talking about the big hurricanes and typhoons, potentially.

Speaker #1: But these secondary perils were less on everybody's mind. Also, given the fact that there are significant traditional perils that used to be just smaller. And there has been a trend of very high claims inflation, in particular for those secondary perils, in recent years.

Christoph Jurecka: Now we see you. Very good. Mr. Polz, I start with your question. I think one and two are related. If the question is, if I may rephrase it, are the trends we see, the increasing losses, the increasing effects from climate change, increasing losses in perils which have not been so much under consideration or on everybody's mind in the past, what are the impact of these kind of events? Wildfires might be one of those, but there are other things happening more often as well. If you think about very local storms, hail has gotten more frequent in recent years. I would summarize all of them. All these are effects of the atmosphere heating up. We have higher temperatures. The statistics and the scientific evidence is very clear that over the last decades, the atmosphere has been heating up more and more.

Speaker #1: And decades. That led to the fact that, of course, we had to think about how to deal with them. We enlarged and enhanced our model capabilities—for example, we introduced wildfire models.

Speaker #1: This is also just one example. For instance, in the United States, wildfires became much more imminent several years ago, compared to the situation in Europe.

Speaker #1: And I think this will continue. So proper risk management is something which not only affects the insureds, but obviously also the insurance industry overall, and also reinsurers.

Speaker #1: We look into these kinds of things, adapt our models, and, yeah, will of course have to reflect all that in our business adequately. As you know, as Munich Re, we have been heavily involved in research around climate change for decades already.

Speaker #1: We have been very outspoken about these kinds of things, starting publicly already in the 1970s. So we invest a lot of time and money into looking deeply into these trends.

Christoph Jurecka: If there is more energy, obviously this energy can erupt in various ways, and you end up with having losses from that. You have a heat wave, or you have these thunderstorms, you have tornadoes. Many of these things, traditionally, we as an insurance industry would have called secondary perils. Everybody was talking about the big hurricanes and typhoons potentially, but these secondary perils were less on everybody's mind. Also, given the fact that their significance traditionally used to be just smaller. There has been a trend of a very high claims inflation, in particular those perils, those secondary perils in recent years and decades. That led to the fact that, of course, we had to think about how to deal with them, and we enlarged and enhanced our model capabilities, for example, introduced wildfire models. This is also just one example.

Speaker #1: And adjusting our models where needed. But this is clearly something which goes beyond Munich Re. In an earlier question today, we discussed the impact, for example, on insurance penetration, coverage, and, most importantly, prevention.

Speaker #1: So all these things will have to be thoroughly thought through in light of the developments as we currently see them. Capacity is there. Did we underestimate these perils?

Speaker #1: I think it's an ongoing trend. I wouldn't say we underestimated them, but I think there's just a shift, in that these perils have become more important.

Speaker #1: And it will continue to be more important, and will also continue to increase demand for insurance and reinsurance going forward. On the life and health business, this was the starting point of the debate in your first question.

Speaker #1: I think we covered it a bit already in this call. Obviously, you see increased mortality from heat waves, for example. So this is something which is covered by life insurance policies in primary insurance, and reinsurers would then reinsure the primary insurer.

Christoph Jurecka: For example, the United States, where wildfires were much more imminent already a number of years ago compared to the European situation. I think this will continue. Proper risk management is something which does not only affect the insurers, but obviously also the insurance industry overall and also reinsurers. We look into these kind of things, adapt our models, and yes, we'll of course, have to reflect all that in our business adequately. As you know, as Munich RE, we have been heavily involved in research around climate change for decades already. I'm very outspoken about these kind of things also publicly, starting in the '70s of the last century already. We invest a lot of time and money into looking deeply into these trends and adjusting our models where needed.

Speaker #1: So this is something where you see an uptick in mortality, for example. But, of course, there are many other drivers as well, and therefore, it's always difficult to just look at a single driver and the significance of this driver compared to others.

Speaker #1: That is, of course, also something you have to keep in mind. But yes, generally, this is covered, and higher mortality rates would affect the life reinsurance and life insurance business.

Speaker #1: On the investment side, what we saw was a very good second quarter in equity markets. The first quarter, if I remind you, was much more muted.

Christoph Jurecka: This is clearly something which goes beyond Munich RE, and in an earlier question today, we discussed the impact, for example, on insurance penetration coverage, prevention, most importantly. All these things will have to be thoroughly thought through in light of the developments as we currently see them. Capacity is there. Did we underestimate these perils? I think it's an ongoing trend. I wouldn't say we underestimated them, but I think there's just a shift, and these perils have become more important and will continue to be more important and will also continue to increase demand for insurance and reinsurance also going forward. On the Life & Health business, this was the starting point of the debate in your first question. I think we covered it a bit already in this call. Obviously, you see increased mortality from heatwaves, for example.

Speaker #1: Given the impact the entire Iran situation and the Suite of Four had on the capital markets in the first quarter, to some extent the second quarter was also a recovery.

Speaker #1: But looking into the future, I think we continue to be optimistic when it comes to the general potential of markets to continue to develop positively.

Speaker #1: But obviously, volatility is always something which might happen, given that markets nowadays are often very much driven also by political events, as you can see. So therefore, it's always a bit harder to predict.

Speaker #1: But fundamentally, I think, in many of the global markets, the economies are doing quite well. We see earnings developing quite favorably in at least some of the industries.

Speaker #1: So globally, and also for the capital markets, we would be cautiously optimistic for the remainder of the year.

Christoph Jurecka: This is something which is covered by life insurance policies in primary insurance, and reinsurers would then reinsure the primary insurer. This is something where you see an uptick in mortality, for example. Of course, there are many other drivers as well. Therefore, it's always difficult to just look at a single driver. The significance of this driver compared to others is, of course, also something we have to keep in mind. Yes, generally, this is covered, and higher mortality rates would affect life reinsurance and life insurance business. On the investment side, what we saw was a very good Q2 in equity markets. The Q1, if I remind you, has been much more muted, given the impact, the entire Iran situation and the Strait of Hormuz had on the capital markets in the Q1.

Speaker #2: Thank you very much.

Speaker #3: Thank you. I don't see any more raised hands here. Therefore, thank you very much, Christoph and Andrew. And thank you to all participants on the call.

Speaker #3: The next financial results will be presented on 12 November 2026, when we will present Munich Re’s Q3 figures. In the meantime, we are happy to stay in contact with you, of course.

Christoph Jurecka: To some extent, the Q2 also was a recovery. Looking into the future, I think we continue to be optimistic when it comes to the general potential of markets to continue to develop positively. Obviously, volatility is always something which might happen, given that markets nowadays are often very much driven also by political events, as you can see. Therefore, it's always a bit harder to predict. Fundamentally, I think in many of the global markets, the economies do quite well. We see earnings developing quite favorably in at least some of the industries. Globally, also the capital market, we would be cautiously optimistic for the remainder of the year.

Maximilian Voigt: Thank you very much.

Maximilian Volz: Thank you very much.

Stefan Golling: Thank you. I can't see any more raised hands here. Therefore, thank you very much, Christoph and Andrew, and thank you to all participants in the call. The next financial results will be presented on 12 November 2026, when we will present Munich RE's Q3 figures. In the meantime, we are happy to stay in contact with you, of course. Having said this, I close this media call. I wish you all the best. Take care and bye-bye.

Browse all earnings call transcripts

Half Year 2026 Münchener Rückversicherungs-Gesellschaft AG in München Earnings Call - Press Conference

Request TrialDemo

Munich RE

Earnings