At Munich Re, Record Profits Meet a Stock Slide — and Directors Are Buying the Break

Executives purchase shares near 52-week low despite strong Q1 earnings; €2.25B buyback and rising dividend underscore shareholder-friendly strategy.

The gulf between Munich Re’s operational strength and its stock price has become so wide that the boardroom is now voting with its own money. While the shares languish near the year’s low, executives have been snapping up equity — a move that sends a pointed signal to a market growing increasingly skeptical of the reinsurance sector.

Mari-Lizette Malherbe, a member of the management board, bought 413 shares in May. She was joined by four other senior leaders, all of them acquiring stock close to the 52-week trough of €437.50. The purchases took place just as the stock was sliding deeper into the red. Munich Re’s shares slipped roughly 2% on Wednesday to €459.70, paring the year-to-date decline to more than 16% and leaving the price about a quarter below its August 2025 record of €605.

The insider buying coincides with an aggressive corporate share repurchase programme. Munich Re is authorised to buy back up to €2.25 billion of its own stock until the 2027 annual meeting. The first tranche of €900 million is already under way. In the first week of June alone, the group snapped up more than 92,000 shares. Since mid-May, the total has exceeded 850,000 shares, all subsequently cancelled — a tactic that mechanically lifts earnings per share.

Earnings that should have sparked a rally

The persistent stock weakness appears all the more puzzling given the numbers. In the first quarter of 2026, Munich Re reported a net profit of €1.714 billion, up sharply from a year earlier, and earnings per share of €13.41 — a level that surpassed even optimistic forecasts. The combined ratio in property-casualty reinsurance improved to 66.8% from 83.9% in the prior-year period, while the return on equity hit a punchy 19.7%.

Yet the market has yawned. Analysts point to a 5.7% drop in insurance revenue to €15.0 billion, which management attributes to negative currency effects rather than any structural erosion. That explanation has done little to calm sentiment. Technically, the stock sits about 8% below its 50-day moving average and more than 13% beneath the 200-day line. The relative strength index of 43 suggests the shares are not yet oversold, leaving room for further downside.

A shareholder-friendly safety net

For long-term investors, the counterweight to the stock’s malaise is a steadily rising dividend. The payout for the 2025 financial year was raised by a fifth to €24.00 per share — a streak that has survived without a cut for 25 years. For 2026, consensus expectations point to €25.65, with the distribution taking place each May.

The company’s solvency ratio of 292% gives it ample capacity to sustain both the buyback and the growing dividend. That cushion also allows management to walk away from reinsurance deals that do not meet its pricing thresholds.

The July test

The next major catalyst will come in July, when the industry negotiates the summer renewal round for reinsurance contracts. At the April renewals, Munich Re bowed out of business that failed its margin requirements, cutting its property-casualty volume by 18.5% after prices fell 3.1%. The market will be watching closely to see whether the group can hold the line on pricing.

Until then, the second-quarter results on 7 August will provide the first real check on whether the first quarter’s operational strength can be sustained. The full-year target of €6.3 billion in net profit remains intact. Whether the stock will reward that performance — or continue to trade at a discount — may depend on how much faith the board’s own buying can instil.