Stormy Results

Munich Re Wins Some, Loses Some

  • Why it matters

    Why it matters

    Munich Re is dealing with low interest rates, digitization and increased competition from hedge funds as well as changes in management. While still boasting high dividends, lower earnings could cut into those in the future.

  • Facts

    Facts

    • Munich Re’s dividend yield, announced Tuesday, was around 4 percent above last year’s record payout.
    • At the same time, the stock was still the biggest loser among Germany‘s top 30 on the day.
    • Natural catastrophes in 2016, like Hurrican Matthew in the U.S. and a New Zealand earthquake that cost Munich Re over €480 million, saw the firm’s final quarter earnings fall.
  • Audio

    Audio

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New Zealand Earthquake 2011 Comparison
An earthquake in New Zealand impacted Munich Re's results, after payouts of around €250 million. Source: AP

Munich Re’s shareholders are breathing a sigh of relief this week – sort of.

The reinsurance company announced Tuesday that its stock would be paying out a higher dividend yield this year than any other company trading on Germany’s blue-chip DAX. Yet still there was disappointment in the markets. The Munich-based company’s stock was the biggest loser among Germany‘s top 30 companies as it posted results Tuesday morning, before recovering most of the gains again in the afternoon.

Welcome to the confusing world of Munich Re. The world’s biggest reinsurer is caught in a huge overhaul right now, both in public and internally.

 

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