A flood of $805 billion in global reinsurance capital is weighing on pricing across the sector, and Munich Re is feeling the pressure. The German giant’s shares ended the week at €478.40, down roughly 13% since the start of the year and still 21% below the 52-week high of €605.00. That slide persists even as the company posted a net profit of €1.714 billion in the first quarter of 2026 — a 57% leap from the same period a year earlier — and maintained its full-year earnings target of €6.3 billion.
The core problem lies in the traditional property-catastrophe market, where an oversupply of capital has driven premiums down. During the June renewal season, prices for property-cat cover fell by as much as 20%. Munich Re responded by slashing its underwritten volume by 18.5% in April, a disciplined move that limited the decline in its own portfolio to just 3.1%. Now, with the July renewal round approaching, management is hoping for price stability — a critical test that will determine whether the profit goal remains achievable.
To offset the margin squeeze, Munich Re is aggressively expanding its cyber reinsurance business, where it already holds a 14% global market share. The cyber insurance market is growing at roughly 15% annually, with experts projecting total premium volume to reach $28 billion by 2030. The company is building out its cyber team in Asia and Africa, two regions where penetration is still low and growth potential is highest. This strategic push aims to generate earnings independent of the cyclical weakness in traditional reinsurance.
At the same time, Munich Re is carrying significantly more storm risk on its own balance sheet. It slashed its external catastrophe protection — known as retrocession — from $1.55 billion to just $600 million, a reduction of more than 60%. That leaves the company exposed to an Atlantic hurricane season that meteorologists expect to be active, as well as severe typhoons in the Northwest Pacific threatening densely populated markets such as Japan. Precise modeling is now paramount.
A robust capital position provides some cushion. The solvency ratio stood at 292% at the end of March, well above the internal target of 200%. The combined ratio improved to 66.8% in the first quarter, reflecting strong underwriting performance.
Investors will get the next update on August 7, when Munich Re releases its half-year results, shortly followed by details from the July renewals. Those figures will reveal whether pricing in the traditional business has stabilised and whether the cyber expansion is already leaving measurable traces on the bottom line. For now, the market remains sceptical — but the company’s dual strategy of retrenchment in catastrophe risks and expansion in cyber could prove its value if the July round holds firm.
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Fresh Munich Re information released. What’s the impact for investors? Our latest independent report examines recent figures and market trends.
Read our updated Munich Re analysis…