Munich Re reported a significant increase in its property and casualty reinsurance result, as a much lower combined ratio thanks to lower major losses, including natural catastrophes, flowed to the bottom line, which is a trend seen across major reinsurers and certain to continue the capital build-up in the sector.Munich Re reported a third-quarter net result of EUR 1.997 billion in 2025, well up on the prior year’s EUR 907 million.For the first nine months of 2025 the net result is now EUR 5.176 billion, again much higher than 3Q 2024’s EUR 4.623 billion.While currency effects drove insurance revenue from contracts down slightly year-on-year for both periods, Munich Re has reported that the low loss environment of Q3 saw its annualised return on equity (RoE) rising to 24.2% ( up from last year’s 11.5%), while for the 9 months it reached 20.8% (higher than 3Q 2024’s 19.9%).

In reinsurance, the return on equity is now running slightly higher at 21.5% for 2025 so far.A key driver is the lower natural catastrophe and major loss environment, which has boosted Munich Re’s P&C reinsurance result considerably.The company said that the net result for its property-casualty reinsurance segment rose significantly to EUR 1.187 billion (up from Q3 2024’s EUR 263m), which the reinsurer said was “due primarily to a very low major-loss expenditure.” The combined ratio for Q3 2025 came in at 62.7%, reflecting the low incidence of major losses, far better than Q3 2024’s 89.5%.

Major losses in the P&C reinsurance business fell to just EUR 118 million for the third-quarter of 2025, far better than the prior year’s EUR 1.336 billion.At just 2.9% of of net insurance revenue for Munich Re’s P&C reinsurance division, that major loss figure is meaningfully down on the expected figure of 17% of net insurance revenues.In addition, Munich Re released EUR 47 million from loss reserves in the period and said that its 9-month combined ratio came in at just 69.8%, again much better than the prior year’s 77.9%.

Similarly low losses were also reported for Munich Re’s global specialty insurance arm, where the combined ratio was just 82.8%, compared to the prior year’s 92.6% in Q3.With a strong investment result as well, Munich Re said its full-year guidance for a result of EUR 6 billion remains on track, with insurance revenue expected to be just slightly below original forecasts due to premium adjustments, renewal and currency effects.A 74% combined ratio is forecast for P&C reinsurance, better than the original forecast of around 79%.

Christoph Jurecka, Chief Financial Officer said, “Munich Re generated a high net result of just under €2bn in the third quarter.We are therefore fully on track to achieve our target of €6bn for the full year.The main reasons for the outstanding quarterly result were the excellent combined ratios in property-casualty reinsurance and Global Specialty Insurance, in addition to good operating performance overall.

These ratios reflect a below-average major-loss expenditure.Together with the excellent performance at ERGO and a high investment result, we were thus able to more than compensate for a somewhat weaker quarter in life reinsurance, and for currency losses.Our diversification strategy is working.” Reflecting the financial standing of global reinsurance firms, Munich Re’s solvency ratio stands at 293% and continued to rise through 2025 so far, which is meaningfully above its target corridor of 175% to 220%.

Capitalisation is up, although so too is debt leverage.But Munich Re has significant firepower to both continue to underwrite into a softening market and to withstand lower rates for longer as well, although naturally its results would come down at the same time.In fact, the CFO said during a call this morning that Munich Re may take opportunities to further strengthen its capital position.

With very low catastrophe losses in the third-quarter and now most reinsurers running with better 9-month combined ratios than the prior year, industry capital levels will continue to build which will only exert more pressure on renewal pricing, one might assume..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.