Munich Re’s Shareholder Vote to Seal Auditor Exit and Capital Ambitions

Shareholders of Munich Re are set to approve a significant governance shift alongside a multi-billion euro capital return when they convene on April 29. The reinsurer’s supervisory board proposes replacing its long-standing auditor, EY, with KPMG, a move directly linked to the aftermath of the Wirecard scandal.

The change, recommended by the audit committee, would take effect for the 2026 financial year. It follows severe sanctions imposed on EY by the German audit oversight body APAS in 2023 for serious professional misconduct related to the Wirecard collapse. If approved, KPMG will not only assume the standard financial audit but will also be responsible for the growing mandate of sustainability reporting under the new European CSRD directive. For Munich Re, this marks a return to a familiar partner, as KPMG held the mandate until 2019.

This governance decision coincides with a period of robust financial health for the DAX-listed company. The board is asking shareholders to renew its authorized capital instrument early. This facility, amounting to 117.5 million euros and equivalent to one-fifth of the share capital, is designed to allow management to swiftly bolster equity if needed. The company’s share price has shown strength, gaining over six percent on a monthly basis despite a slight dip to 558.80 euros on Wednesday, comfortably trading above its 200-day moving average.

The foundation for this shareholder generosity is a record annual profit of 6.1 billion euros. Management plans a total capital return of 5.3 billion euros, which includes a proposed share buyback program of up to 2.25 billion euros. Should the annual meeting agree, the dividend will be paid on May 5. Approval would mark the 25th consecutive year without a dividend cut, with the stock going ex-dividend on April 30.

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This payout power stems from a strict underwriting discipline, particularly in response to a challenging US market. Prices in the US catastrophe reinsurance sector are falling at their fastest rate in over a decade, intensified by a massive inflow of capital from new catastrophe bonds. Munich Re’s leadership has responded by deliberately allowing unprofitable contracts to expire. This restrictive policy shrank the gross premium volume booked during the key January renewal period by nearly eight percent to 13.7 billion euros, with a notable pullback in natural catastrophe business.

The company’s long-term strategic goals, outlined in its “Ambition 2030” plan, remain unchanged. Munich Re is targeting a return on equity of over 18 percent by the end of the decade. To support profitability, an intensified efficiency program aims to triple annual savings to 600 million euros by leveraging artificial intelligence. The immediate profit target for the current year is approximately 6.3 billion euros.

The first concrete test of whether margin improvements can offset the premium decline arrives shortly after the shareholder meeting. On May 12, Munich Re will publish its first-quarter figures, providing evidence of how effectively its hard-nosed underwriting policy is countering operational price pressure.