Munich Re's share slumps - Decrease in insurance premiums observed
Softening Reinsurance Market Puts Pressure on Munich Re's Natural Disaster Coverage
The global reinsurance market is experiencing a softening trend in mid-2025, marked by declining premiums, increased competition, and more capacity – particularly in property catastrophe reinsurance markets. This shift follows a prolonged hard market (2019–2024) characterised by high natural catastrophe losses, inflation, and low investment yields, which led to substantial rate hikes and stricter underwriting [1][2][3][4][5].
In this soft market, Munich Re, a leading reinsurer, faces pressure on rate increases and tighter margins for property catastrophe reinsurance. Prices are decreasing, and competition is growing [1][3]. However, the company benefits from several mitigating factors.
Firstly, the absence of major new loss events in the retrocession market, including recent wildfires and hurricanes, has supported stable underwriting results [1]. Secondly, the increased market capacity allows reinsurers like Munich Re to offer more flexible terms deeper into programs (lower attachment points), which may stimulate business growth but compress margins somewhat [1]. Lastly, Munich Re’s diversified portfolio across various lines of business reduces overall soft market impact, as some areas remain stronger and face less pricing pressure than property catastrophe lines [3].
Despite these challenges, the softening market puts pricing at attractive levels compared to historical norms due to disciplined capital deployment by reinsurers [3]. In the current market, double-digit declines in some areas have been observed [4][5].
Munich Re's adjusted revenue target for the reinsurance business in 2025 stands at 40 billion euros, a reduction of 2 billion euros from the initial target [6]. The company's stock price dropped to 555.60 euros in Xetra trading after the release of the second quarter figures [7].
In summary, the softening reinsurance market in 2025 is likely pressuring Munich Re’s property catastrophe (natural disaster) coverage rates downward, impacting profitability. However, improved investment income, disciplined capital management, and absence of new major losses provide some offsetting support to overall profitability [1][2][3][4].
Key Points:
| Aspect | Current State / Impact for Munich Re | |--------------------------------|-----------------------------------------------------| | Market Cycle | Softening market in 2025 after prolonged hard market | | Pricing trend | Declining property catastrophe reinsurance rates; double-digit declines in some areas [4][5] | | Capacity and Competition | Increased capacity, new entrants, intensified competition | | Natural disaster coverage rates| Pressure on rate increases; more flexible, competitive terms | | Impact on Munich Re profitability | Margin pressure on catastrophe lines but offset by good underwriting results and improved investment yields | | Overall market discipline | Capital remains disciplined, avoiding excessive softness [3] |
This analysis is consistent across multiple insurance broker and market reports from mid-2025 [1][2][3][4][5].
Sources:
[1] Insurance Insider: Link
[2] Reuters: Link
[3] Aon: Link
[4] Willis Re: Link
[5] Guy Carpenter: Link
[6] Munich Re: Link
[7] Bloomberg: Link
In the softening reinsurance market of 2025, Munich Re experiences a pressure on rate increases and tighter margins for property catastrophe reinsurance, as prices decrease and competition grows. Despite this, the soft market offers attractive pricing levels compared to historical norms due to disciplined capital deployment by reinsurers.
