Four Munich Re Directors Jump In as Profit Surge Fails to Lift the Stock

Despite a 57% jump in Q1 net profit to €1.714B, Munich Re stock falls 17% YTD on portfolio shrinkage and price cuts. Four executives bought shares near the 52-week low, signaling confidence.

Munich Re’s first-quarter net profit jumped 57% to €1.714 billion, yet the stock lost 5% on the day the numbers landed and has since shed nearly 17% year to date. That disconnect — a record underwriting result against a backdrop of pricing headwinds and a shrinking portfolio — has prompted four board members to put their own money to work.

On May 12, three executives snapped up shares in coordinated trades near the 52-week low. Dr. Achim Kassow bought 300 shares at exactly €470.00 apiece on XETRA, Stefan Golling paid an average of €476.19, and Dr. Markus Rieß spent roughly €238,000 to acquire 500 shares at €476.50 each. The following day, CFO Andrew Buchanan joined them, purchasing stock at an average price of €466.83 — the exact level that marked the fresh 52-week trough. Insider buying at this scale and timing is rare; market participants typically read it as a signal that management views the recent rout as overdone.

The operational case for that view is solid. Net profit surged from €1.094 billion a year earlier, powered by a sharp drop in natural catastrophe losses to just €55 million from €757 million in the prior-year period, when California wildfires alone cost more than €1 billion. Munich Re also booked a comparatively modest €90 million in claims related to the Persian Gulf conflict. Yet the market focused elsewhere.

Underpinning the stock’s weakness is a contraction in new business. During the April renewal round, the portfolio shrank 18.5%, and after adjusting for inflation and risk shifts, prices fell 3.1%. While Munich Re deliberately shed underperforming contracts, rival Hannover Re expanded its book under similar conditions. Currency headwinds added to the pain: the weak dollar cost the group almost €800 million in insurance revenue, pulling total revenue to €15.0 billion, a full €1 billion below analyst expectations.

Several analysts have responded by trimming their price targets. RBC cut to €490, Citi to €511, Goldman Sachs to €557 and Berenberg to €565. The Erste Group downgraded Munich Re from “Strong Buy” to “Hold,” though DZ Bank maintained its buy recommendation. At the current price of €475.10, the stock trades roughly 21% below its 52-week high of €605.00 and well beneath all its moving averages.

The company is not waiting for sentiment to shift on its own. Starting May 14, Munich Re kicked off the first tranche of its institutional share buyback programme, authorising up to €900 million in repurchases by August 21. The overall programme, which runs until the annual general meeting in April 2027, has a maximum volume of €2.25 billion — equivalent to roughly 1.5% of current market capitalisation per tranche.

Management is standing by its full-year targets: net profit of around €6.3 billion and group insurance revenue of roughly €64 billion. CFO Buchanan has said he expects pricing to “largely hold” in the crucial July renewal round, which could defuse the primary argument of the sceptics if confirmed. Investors will get the next data point on August 7, when Munich Re reports second-quarter results and shows whether the pricing dynamics really have turned a corner.