Münchener Rück Stock: Record Profit Masked by Market Jitters

Despite posting a record Q2 profit of €2.1 billion—a 30% surge driven by unusually low natural catastrophe costs (€20 million vs. €500 million YoY)—Münchener Rück’s shares plummeted 7% to €560, making it the DAX’s worst performer. The drop reflects investor concerns over declining reinsurance prices, with risk-adjusted rates falling 2.5% in July renewals and 1.2% year-to-date. The company slashed its 2025 revenue forecast from €64 billion to €62 billion, citing price pressures and unfavorable currency effects from a weak US dollar, which dented euro-denominated earnings.

Sector-Wide Anxiety Spreads

The downgrade triggered a sector sell-off, with rivals losing up to 4%. Analysts note that while the peak of the reinsurance cycle has passed, pricing remains "attractive," and Münchener Rück’s disciplined avoidance of unprofitable contracts (shrinking volume by 3.2%) signals prudent management. The firm maintains its €6 billion annual profit target, but market sentiment underscores broader anxieties about softening demand and macroeconomic headwinds.