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Investing.com -- Munich Re (ETR:MUVGn) on Friday slashed its 2025 insurance revenue forecast, citing business trends and foreign exchange effects, while reporting weaker July renewals. The German reinsurer, however, maintained its full-year profit goal.
The company’s shares slid nearly 8%.
Revenue in the reinsurance division is now expected to reach €40 billion ($46.6 billion) next year, down from a prior forecast of €42 billion. Group insurance revenue is projected at €62 billion, compared with an earlier target of €64 billion.
In the second quarter, Munich Re generated €14.78 billion in revenue from insurance contracts, 1.2% lower than a year earlier, mainly due to currency headwinds. That figure fell short of the €15.5 billion consensus estimate compiled by the company.
Net profit for the quarter rose 30% year-on-year to €2.09 billion, in line with the roughly €2.1 billion it pre-announced last month and above expectations of €1.62 billion.
The operating result was €2.91 billion, significantly above the consensus estimate
"Having already profit surprised ahead of 2Q 2025 results, today’s highly material beat to the company collated consensus comes as no surprise," Jefferies analyst Philip Kett commented.
Munich Re reaffirmed its forecast for €6 billion in full-year net profit, adding that all other targets remain unchanged.
"In the second quarter, Munich Re posted a record-breaking profit of €2.1bn. With a half-year net result of €3.2bn, we are well on track to reach our annual target of €6bn," said Joachim Wenning, Chair of the company’s Board of Management.
"All lines of business contributed to the quarterly result – with excellent combined ratios in property-casualty reinsurance and GSI, and pleasing developments in life and health reinsurance, at ERGO and in our investment business. This also allowed us to mitigate the impact of foreign exchange losses due to the faltering U.S. dollar."
The July renewals saw average prices decline by 2.5% and volumes contract by 3.2%, the company said.