Munich Re’s Oversold Stock Faces a Test as €2.25bn Buyback and Auditor Switch Take Centre Stage

Munich Re shares fall near 12-month low as €24 dividend goes ex; oversold RSI signals potential reversal amid record €6.3bn profit target and new defence fund.

Munich Re’s shareholders are pocketing a hefty €24 per share dividend today, but the stock is paying the price of the ex-dividend adjustment. The Dax-listed reinsurer slipped nearly three percent on Thursday as the payout went ex, leaving the shares hovering around €512 — dangerously close to their 12-month low. The Relative Strength Index, at 28, has already flashed an oversold signal, a technical warning that the selling may have run its course.

The dividend, a 20 percent increase on last year and the fifth consecutive annual rise, marks a quarter-century of uninterrupted payouts. It is part of a broader capital return package that includes a new €2.25bn share buyback programme, launched on Wednesday and set to run until April 2027. The repurchased shares will be cancelled, a move designed to boost earnings per share over time.

But the capital return story is only one thread in a busy corporate calendar. The annual general meeting on Wednesday also delivered a change in the auditor’s chair. KPMG will take over from EY from the 2026 financial year, a decision that carries the shadow of the Wirecard scandal. Germany’s audit watchdog APAS imposed hefty fines and a temporary new-client ban on EY in 2023, a direct consequence of the collapsed payments group’s botched audits. For Munich Re, the writing was on the wall. KPMG is no stranger to the reinsurer’s books — it served as auditor until 2019, before EY took over. The new mandate also covers the sustainability reporting required under the EU’s Corporate Sustainability Reporting Directive.

The supervisory board is also getting a refresh. Frédéric de Courtois was elected as a new shareholder representative, replacing Clement B. Booth, who stepped down at the end of the meeting. Meanwhile, outgoing chairman Nikolaus von Bomhard floated former CEO Joachim Wenning as his successor for 2028, signalling a long-term succession plan.

Beyond the governance changes, the company is pivoting on strategy. Its asset management arm MEAG is teaming up with US investor Warburg Pincus to launch a European defence fund with a target volume of €1.5bn. The move marks a deliberate break from past ESG guidelines that barred investments in the defence sector. The shift drew fire from environmental group Urgewald at the AGM, which also criticised the reinsurer’s continued underwriting of US liquefied natural gas terminals — a stance activists argue contradicts its own climate commitments.

Operationally, CEO Christoph Jurecka laid out the “Ambition 2030” roadmap, targeting average annual earnings per share growth of eight percent. At least 80 percent of net profit is earmarked for shareholder returns. The immediate test comes on 12 May, when Munich Re reports first-quarter results. Analysts are pencilling in earnings per share of €13.76 for Q1, a figure that will be closely watched against the full-year net profit target of €6.3bn — a record that would surpass last year’s €6.12bn. With the stock in oversold territory and the buyback programme under way, the Q1 numbers could determine whether the current weakness is a buying opportunity or a warning sign.