For the current year, Munich Re expects the war in Ukraine to have an impact.
(Photo: Munich Re)
Munich Despite the major global threats of war, pandemics, natural disasters and inflation, Munich Re wants to increase its dividend by at least five percent this year. This was announced by CEO Joachim Wenning at the annual general meeting of the world’s largest reinsurer, which took place in virtual form on Thursday.
After a distribution of eleven euros per share for the past year, shareholders can expect at least 11.55 euros for 2022. In relation to the current share price of just under EUR 240, the dividend yield is currently around 4.6 percent.
The challenges in the past year were immense. “From a historical perspective, 2021 is one of the most damaging years ever,” said Wenning in his speech to shareholders.
Natural disasters alone caused damage equivalent to almost 250 billion euros. EUR 105 billion of this was insured. Munich Re accounted for around 3.1 billion euros.
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Exceptionally high financial burdens also resulted from the ongoing corona pandemic. Life and health reinsurance paid out around EUR 800 million.
Burdens threaten from Ukraine war
For the current year, Munich Re expects the war in Ukraine to have an impact on business. New business in Russia and Belarus has already been discontinued and existing contracts will no longer be extended. This also applies to capital investments in the region.
The Munich Re boss only sees direct effects of the war on special insurance for aviation, transport and credit. It is also still unclear what burdens the world’s largest reinsurer could face as a result of capital investments in the region. Cyber attacks are now also considered to be a particularly large risk in the insurance industry.
Years ago, Munich Re focused heavily on the potential opportunities offered by cyber insurance and does not intend to deviate from this path. “We are expanding our market leadership in business areas such as cyber,” announced CEO Wenning.
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However, the liability per event, customer and policy is deliberately limited. In the current strategy plan called Ambition 2025, which has been running since the beginning of last year, the Munich Re boss sees himself fully on course, despite the many global crises.
Criticism of auditor EY
In addition to a great deal of praise for the result and dividend, shareholders also clearly criticized the choice of auditor. Last year, Munich Re’s annual report was audited for the second time in a row by EY.
Paul Petzelberger from the Protection Association of Investors (SdK) described the choice of EY as unacceptable because of the long-standing cooperation with the insolvent payment service provider Wirecard. “Suggest us another auditor”, Petzelberger demanded.
Daniela Bergdolt from the German Association for the Protection of Securities (DSW) made a similar statement. EY made serious mistakes at Wirecard. Nikolaus von Bomhard, Chairman of Munich Re’s Supervisory Board, defended the proposal to continue to rely on the auditor EY.
Even if the Wirecard case played a role in the selection of EY, the Supervisory Board continues to rate the quality of the auditor as very positive. “We see no reason to change the auditor,” says von Bomhard. In the end, nearly 98 percent of voting shareholders voted for EY. According to current regulatory requirements, EY could review Munich Re’s annual report by 2029.
Since August 2018 she has also been responsible for the Europe and Latin America department.
(Photo: Munich RE)
At least some clarity is emerging on Munich Re’s currently most important personnel issue. Doris Höpke, the only woman on the Executive Board who was most recently responsible for Human Resources and the markets in Europe and Latin America, is leaving the reinsurer at the end of April.
“For the Supervisory Board, the appointment of a female Executive Board member at the earliest opportunity has top priority,” announced Nikolaus von Bomhard. How difficult the search is, however, is shown by the fact that no successor has been found since Höpke’s departure was announced about six months ago.
“The market is not big, after all it’s also about quality,” said the head of the supervisory board, explaining the problems with the selection of the board of directors. Board member Achim Kassow will take over responsibility for human resources next week, and Thomas Blunck will then be responsible for the markets in Europe and Latin America.
More: Munich Re boss: “War cannot be insured because it is ruinous”