Munich Re (AO) | Buy | Q1 first take: cat tailwind carries the print, renewals confirm softening

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Munich Re (AO) | Buy | Q1 first take: cat tailwind carries the print, renewals confirm softening

Munich Re Buy | Target Price: EUR600.00

Q1 2026 net result of EUR1,714m came in broadly in line with consensus (-0.9% vs EUR1,729m) and slightly above our EUR1,675m

estimate (+2.3%), up +57% YOY off the easy comparison base distorted by the LA wildfires in Q1 2025.

April renewals confirm the softening trend we flagged (but with a larger premium volume decline) in our preview. Premium

volume -18.5% to EUR2.0bn, risk-adjusted price change -3.1% (incl. claims inflation and loss trends), with T&Cs and structures

largely preserved. The reduction was concentrated in proportional business with limited bottom-line impact, mirroring the

January renewals pattern (-7.8% volume, -2.5% rar at 1 January).

Cumulative read-across is that Munich Re continues to walk away from sub-economic business, which is a positive medium-term

signal even if optically the headline volume contraction is sizeable. We reiterate that April is a narrower, more Japan-heavy

season and should not be extrapolated linearly to mid-year or January 2027 renewals, but the direction of travel (softening

property cat) is confirmed.

Group TTR of EUR2,676m beat consensus by +10.2% (+13.6% vs KECH) and was up 30% YOY, with outperformance across all three

reinsurance segments (L&H Re +EUR30m, P&C Re +EUR132m, GSI +EUR81m on TTR vs consensus), plus a positive contribution at

ERGO Germany (+EUR47m). The operating result of EUR2,230m missed consensus by -5.2% (-EUR123m), but the entire gap is

attributable to the financial side: Group RoI of 2.9% vs 3.4% consensus and a negative FX result of -EUR162m at Group level (-

EUR118m in reinsurance directly hitting the bottom line).