Munich Re Faces a Trio of Headwinds: Auditor Overhaul, AI-Led Job Cuts, and a Stalling Share Price

Munich Re's shareholder meeting saw climate protests, KPMG replacing EY as auditor, and a 1,000-job cut at ERGO, while a strong euro pressures shares near 2025 lows.

Munich Re’s annual shareholder meeting was meant to be a celebration of yet another dividend increase. Instead, it became a stage for climate protests, a changing of the guard in the boardroom, and a stark reminder that the euro’s strength is gnawing at the bottom line. The stock, meanwhile, is trading dangerously close to its 2025 low.

The shares closed at €513.20 on Thursday, having shed roughly 7% since the start of the year. The ex-dividend adjustment on Wednesday knocked the price to €510.80, a 3% single-day drop that leaves the stock hovering just above its year-low of around €508. The payout itself was raised for the fifth consecutive year — a 20% increase — but the market’s focus has shifted firmly to the structural challenges ahead.

KPMG Steps In as EY Era Ends

One of the most consequential decisions to come out of the meeting was the appointment of a new auditor. KPMG will take over the group’s financial audit from the 2026 fiscal year, ending a long-running relationship with EY. The switch follows the German audit watchdog APAS’s ban on EY from taking on new clients in the wake of the Wirecard scandal. KPMG will also be responsible for auditing Munich Re’s new sustainability reports under EU standards.

The supervisory board is also getting a shake-up. Clement B. Booth has stepped down, and shareholders voted in former chief executive Joachim Wenning to replace him. Wenning will take his seat once the legally mandated cooling-off period expires.

ERGO to Shed 1,000 Jobs by 2030

Away from the governance changes, the group is pushing ahead with a painful restructuring at its primary insurance arm, ERGO. Around 1,000 positions will be cut by 2030, with roughly 200 jobs disappearing in Germany each year. Artificial intelligence is taking over routine tasks in call centres and claims processing, while other roles are being shifted to Poland and India.

Management has ruled out compulsory redundancies. Instead, some 700 affected employees will be retrained. The cuts are part of a broader cost-saving drive: the parent company is demanding annual savings of €600 million from ERGO to support its long-term strategy.

The Euro’s Bite and a Climate Backlash

Operationally, Munich Re has been enjoying a relatively benign period for natural catastrophes, but a strong euro is spoiling the picture. The company collects a significant portion of its premiums in US dollars, and the current exchange rate is compressing those revenues when translated back into euros.

That currency headwind is one reason the stock has struggled to gain traction this year. The shares are now within striking distance of their 2025 low, and the market is waiting for evidence that the group can hit its full-year net profit target of €6.3 billion. Management is also aiming for a return on equity above 18%.

The first-quarter results, due in May, will be a critical test. A strong start to the year is essential to keep those ambitions on track, especially with the currency drag persisting.

On the environmental front, the climate activist group Urgewald used the shareholder meeting to criticise Munich Re’s insurance of new US liquefied natural gas terminals. The company introduced new guidelines in January that exclude coverage for LNG terminals directly linked to new gas fields. But activists argue the definition is too narrow, leaving fracking regions and existing mega-gas fields untouched. There is still no binding exit date for oil and gas underwriting, while the coal phase-out is set for 2040.

The dividend will be paid out on 5 May 2026. It marks the 25th consecutive year without a cut — a streak the board is clearly keen to protect, even as the headwinds mount.