(Alliance News) - Munich Re AG on Tuesday backed its 2025 profit guidance despite facing an increase in its combined ratios, as it draws confidence from insurance market conditions and the quality of its portfolio.

The Munich, Germany-based reinsurance provider reported a net result in the first quarter of 2025 of EUR1.09 billion, down 48% from EUR2.12 billion a year previous.

Insurance revenue from contracts issued rose 5.0% to EUR15.81 billion from EUR15.06 billion, but the bottom line hampered by loss expenditure in reinsurance.

Munich Re reported a net result for reinsurance of EUR853 million in the first quarter, down 55% from EUR1.89 billion as it faced higher major losses in Property-Casualty and Global Specialty Insurance owing to the Los Angeles wildfires in January.

Munich Re said the wildfires resulted in the largest single claims event in both segments, totalling approximately EUR800 million and EUR200 million, respectively.

For Property-Casualty, the combined ratio increased to 83.9% from 69.7%, and for GSI it rose to 95.5% from 87.6%.

The combined ratio is an indicator of an insurance company's profitability, with a figure below 100% indicating a profit on underwriting, and therefore the lower the better.

Munich Re anticipates total claims attributable to the wildfires totalling around EUR1.1 billion.

Shares in Munich Re were down 3.6% at EUR560.00 on Tuesday morning in Frankfurt.

Guidance was left unchanged, with Munich Re backing its annual outlook and expecting a net result of EUR6.0 billion for 2025, reflecting a 5.8% uplift from 2024.

Chief Executive Christoph Jurecka said: "Although Munich Re did not emerge unscathed from the devastating wildfires in Los Angeles in January 2025, we nevertheless managed to generate a quarterly profit of EUR1.1 billion.

"This exemplifies the Munich Re Group's resilience, boosted once again by the prudent management of our business portfolio.

"We're sticking with our profit guidance of EUR6 billion for the 2025 financial year – thanks in no small part to ongoing favourable market conditions and the high quality of our portfolio."

By Christopher Ward, Alliance News reporter

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