Munich Re’s Auditor Switch and Currency Squeeze Put the Spotlight on May 12

Munich Re faces currency headwinds as euro strength pressures profits, but record 2025 earnings, ambitious 2026 targets, and a €5.3B shareholder return plan offer support.

The German reinsurance giant is heading into its first-quarter earnings release on May 12 with a stock that has barely budged from its 52-week low of €507.60. At €508, the shares have shed roughly 7.5% since the start of the year, and the pain was compounded by the ex-dividend date, which pushed the price toward €512 before a modest recovery.

The culprit is not a spike in catastrophe claims but the euro’s relentless strength. Munich Re books a substantial chunk of its business in US dollars, and the exchange rate has turned sharply against it. At the beginning of 2025, one euro bought about $1.03. By the first quarter of 2026, the single currency was consistently trading between $1.15 and $1.20. That dynamic already slashed fourth-quarter net profit by 12% to €945 million, with management pointing squarely at currency losses.

A deliberate portfolio trim

Management has responded with a targeted pruning of the book. As of January 1, 2026, premium volume contracted by 7.8% to €13.7 billion, driven by a decision not to renew unprofitable contracts. In the natural catastrophe segment alone, premiums fell by roughly 6%. The message is clear: discipline trumps volume in a soft pricing environment.

That discipline extends to the balance sheet. The “Ambition 2030” strategy sets a return on equity target above 18%, annual earnings-per-share growth of more than 8%, and a payout ratio exceeding 80%. Annual cost savings of around €600 million are meant to underpin those goals. Chief executive Christoph Jurecka is sticking with the full-year profit target of €6.3 billion for 2026, a figure that looks ambitious given the currency headwinds.

Record earnings, record returns

The foundation for that target is solid. Munich Re posted a record net profit of €6.12 billion in 2025 — the fifth consecutive year in which it beat its own guidance. The dividend has not been cut in 25 years and has been raised five times in a row. This year, the board has proposed a payout of €24 per share, alongside a share buyback programme of up to €2.25 billion, set to begin in late April 2026 pending approval from the supervisory board committee. Combined, the two measures would return roughly €5.3 billion to shareholders.

Barclays remains bullish, rating the stock “Overweight” with a price target of €606, implying upside of nearly 20% from current levels.

A clean break with the past

Beyond the numbers, Munich Re is making a structural change that signals a clean slate. Starting with the 2026 financial year, KPMG will take over as auditor, replacing EY. The move draws a line under the lingering shadow of the Wirecard scandal, which tainted EY’s reputation in Germany. On the supervisory board, Clement B. Booth is stepping down, and former chief executive Joachim Wenning will join after a mandatory cooling-off period.

The market will be watching the May 12 release closely. The currency effect is the wild card: if the euro’s strength has bitten deeper than expected, the full-year profit target could come under pressure. For now, the stock is pricing in plenty of caution — and that, for some analysts, is precisely the opportunity.