Munich Re pulls back at renewals, sees competition as “still mainly on price”

Munich Re made a “deliberate reduction in premium volume” at the April reinsurance renewals, systematically opting not to renew business that did not meet expectations on price or terms and conditions, but one signal of encouragement is that the company said it sees high levels of competition in the sector as “still mainly on price.”

As a result, Munich Re sees portfolio resilience as “largely maintained”, with the reinsurance company seeing terms, conditions and structures as mostly stable in the softening marketplace.

Munich Re has announced its first-quarter performance this morning, reporting a net result of just over EUR 1.7 billion, soundly beating the prior year period result of EUR 1.094 billion.

The technical result rose to EUR 2.676 billion, again much higher than Q1 2025’s EUR 2.054 billion.

The net financial result rose to EUR 139 million, while the operating result of EUR 2.23 billion for Q1 2026 was again much higher than last year’s EUR 1.465 billion.

All of which drove a return-on-equity of 19.7% for Q1 2026, beating last year’s 13.3%.

Andrew Buchanan, Chief Financial Officer said, “Munich Re has made an excellent start to 2026 with a Q1 result of €1.7bn. We are therefore fully on track to achieve our target of €6.3bn for the full year. All business fields and segments have reported encouraging development, in turn contributing to the Group’s strong net result. Slightly lower prices in the April property-casualty reinsurance renewals do not obscure the positive overall picture: Prices remain favourable and the quality of our portfolio is high.”

Currency effects meant that the insurance revenue from insurance contracts fell to EUR 15.018 billion in Q1 2026, from EUR 15.811 billion a year earlier.

Reinsurance performed well, contributing EUR 1.479 billion to the net result, compared to only EUR 853 million in Q1 2025.

Property and casualty reinsurance delivered EUR 841 million of that, helped greatly by a much improved combined ratio of only 66.8%, far better than Q1 2025’s 83.9%.

Far lower major loss expenditure delivered the lower combined ratio, as major losses were only EUR 130 million in the first-quarter of 2026, compared to over a billion Euros in the prior year when the Los Angeles wildfires dented the P&C reinsurance result for Munich Re.

Natural catastrophe losses were only EUR 55 million in the latest period, while man-made losses came out at EUR 75 million.

As with the other major reinsurance companies, the renewals saw price effects and appetite changing for Munich Re.

The company “systematically opted to not renew or write business that did not meet expectations with respect to the required prices or terms and conditions,” Munich Re explained.

The volume of business written at the April renewals fell by around EUR 2 billion, or 18.5%, with falling prices contributing to that.

Munich Re explained, “It was possible to maintain the portfolio’s high quality thanks to largely stable contractual terms and conditions for the renewed business.

“While prices were generally on a downward trend, it was nevertheless possible to compensate for the higher loss estimates in some areas, which were primarily attributable to inflation or other loss trends. Despite a 3.1% drop, the good price level of Munich Re’s portfolio was largely maintained overall.”

The risk-adjusted price change on April reinsurance renewals is reported as -3.1% by Munich Re. CFO Buchanan said that property catastrophe business was the main area of price pressure.

Munich Re focused on portfolio optimisation at the April 2026 renewals, as it managed the cycle through reductions on business that did not meet its profit expectations and in particular reduced certain proportional business.

“Disciplined cycle management led to volume decline on the entire renewed treaty book (wing-to-wing),” Munich Re reported.

Importantly, the company said that competition in the market is still mainly price focused, while portfolio resilience is largely maintained on price, terms and structures.

Munich Re still sees profitable opportunities in the market though and expects that to continue, despite reinsurance market softening.

“Looking ahead to the upcoming round of renewals in July, Munich Re expects a market environment in which the sustained favourable price levels as well as improved terms and conditions can be largely upheld despite the current market pressure,” the reinsurer explained.

Munich Re said that its 2026 targets remain unchanged, with a net result of EUR 6.3 billion still the goal.

For comparison, yesterday Hannover Re reported renewals growth of 5.6% for the year so far and 18.8% at April 1st, while acknowledging that price pressures have the upper hand in property and casualty reinsurance.

Swiss Re said that it prioritised underwriting discipline and reduced its natural catastrophe volumes at renewals year-to-date, reporting an 8% volume decrease at the April renewals.

While SCOR reported a continuation of pruning in certain liability classes that were the main driver of volume decreases at April 1st, but maintained its stance on price adequacy in property catastrophe risks by growing into what it acknowledges is a competitive marketplace.

As is typical at this stage of a softening phase of the reinsurance market cycle, strategic differences emerge as the big four reinsurers embrace cycle management and optimisation of their portfolios.

Read all of our reinsurance renewals news coverage here.