MUNICH / LONDON (IT BOLTWISE) – Munich Re presented a new strategy at its investor day that surprised even experienced market observers. With ‘Ambition 2030’, the reinsurer is not only planning increasing profits, but also an exceptionally high payout ratio over a period of five years. This announcement comes at a time when CEO Joachim Wenning is planning to resign.
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Munich Re has exceeded investors’ expectations with its new strategy ‘Ambition 2030’. The reinsurer plans to significantly increase its profits and ensure a high payout ratio over a period of five years. This announcement was made at the Investor Day in Munich and surprised even experienced market observers.
The strategy was presented by Joachim Wenning, the outgoing CEO, who is leaving the group at the end of the year. His successor, Christoph Jurecka, will take over the implementation of the ambitious plans. Wenning leaves behind ambitious targets for his successor, based on a successful term in office during which Munich Re’s share price tripled.
A central aspect of the new strategy is the distribution policy. Munich Re plans to return around 80 percent of its profits to shareholders through dividends and share buybacks, while the solvency ratio should be comfortably above 200 percent. These measures are intended to increase the attractiveness for investors and ensure the financial stability of the company.
The new goals were received positively on the capital market. Munich Re shares were one of the stronger stocks in the Dax. Analysts praised the clarity and scope of the guidelines. Citi analyst James Shuck described the goals as ambitious and pointed out that Munich Re has regularly exceeded conservative forecasts in the past.
The strategy also envisages savings through efficiency improvements, which are expected to rise to around 600 million euros by 2030. A central lever for this is the increased use of artificial intelligence to accelerate processes and reduce costs. The primary insurance subsidiary Ergo in particular is already using corresponding applications in several areas.
Munich Re also plans to use more risk capital in its capital investments and to expand investments in alternative asset classes such as private credit and infrastructure. These measures are intended to further support the company’s growth and maximize its earnings opportunities.
Despite the ambitious financial goals, Munich Re also remains committed to its climate goals. However, environmental organizations criticized the climate targets as unambitious and pointed to existing gaps in the company’s guidelines. Munich Re recently withdrew from several international climate initiatives.
Overall, Munich Re’s new strategy shows that the company is not focused on a radical change of course, but rather on the consistent continuation of a successful model. For the new CEO Christoph Jurecka, it will be the benchmark against which his term of office will be measured.
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