Munich Re’s €24 Dividend and Defence Pivot Mask a Deeper Restructuring Underway

Munich Re proposes record €5.3B capital return despite stock slump, plans 1,000 job cuts at ERGO via AI, replaces EY with KPMG as auditor, and launches defense fund.

The mood at Munich Re’s annual general meeting in Munich on Wednesday was subdued, despite the board proposing a record payout for shareholders. The stock slipped 2.6% to around €530, edging closer to its 52-week low, as a cocktail of currency headwinds and internal upheaval weighed on sentiment.

Shareholders are being asked to approve a dividend of €24.00 per share, a 20% increase on last year, alongside a new buyback programme worth up to €2.25 billion. Combined, the capital return to investors totals €5.3 billion. If given the green light, the shares will trade ex-dividend on 30 April, with the cash landing in accounts on 5 May. The payout continues a 25-year unbroken streak of dividend stability.

But the headline numbers tell only part of the story. Beneath the surface, the reinsurer is pushing through a sweeping internal overhaul. Its primary insurance arm, ERGO, plans to cut around 1,000 jobs by 2030, driven by the rapid adoption of artificial intelligence. Roles in call centres and claims processing are being automated away. Compulsory redundancies have been ruled out under an agreement with the ver.di union, and an internal academy will retrain affected staff for new roles. The ERGO restructuring is seen as a blueprint for the wider group. Around 700 employees are earmarked for reskilling.

The AGM also marks a late chapter in the Wirecard saga. The board is proposing to replace EY with KPMG as auditor for the 2026 financial year. The German audit watchdog APAS had previously fined EY and temporarily barred it from taking on new mandates in the wake of the Wirecard collapse. KPMG, which audited Munich Re’s books until 2019, will also take on the group’s sustainability reporting under the EU’s CSRD directive.

In a separate strategic pivot, the group’s asset manager MEAG is breaking with ESG orthodoxy by channelling institutional capital into a European defence platform. The fund, co-launched with US investor Warburg Pincus, targets a volume of €1.5 billion and will focus on mid-sized companies in the sector.

Operationally, the first quarter has been a mixed bag. Major natural catastrophes have been largely absent, but a strong euro is eating into earnings. Munich Re generates a significant portion of its premiums in US dollars, and the euro traded consistently between $1.15 and $1.20 during the period. The currency drag is a key factor behind the recent share price weakness. The relative strength index has fallen to 26, signalling an oversold condition.

Management is sticking to its full-year profit target of around €6.3 billion for 2026. The true impact of the currency headwinds will become clearer on 12 May, when the group publishes its first-quarter results.