Friday, May 9, 2014

Münchener Rückversicherung (MüRe) report Q1 2014

MüRe, Q1, 2014, front page

MüRe arrived with their Q1 report for 2014 and the report was not accepted with any ovations and instead the share price dropped by a bit over 1%.

The report did not really contain much that would cause any excitement besides from that they are still doing well even though it was slightly less good in comparison to in Q1 2013. They brought up two things that I found of interest. They did not take on over 1 billion insurance claims since they did not fit their criteria. I that they stick to their hard rules because that means they will do well for a long time and not only in the next quarter report and secondly they brought up that they will until the next shareholders meeting in 2015 continue to buy back shares at a value of around 1 billion euro. This is also good news for us that are already shareholders. We get a nice dividend and our shares receive a higher value.

If we look at what they brought up as highlights then we see that they earnings dropped with almost -5% to 924 million €. we see that they ROE is unchanged at 13.8% and the book value has jumped up with almost 7%.

MüRe, Q1, 2014, highlights

In the back of the report we find the income statement with news about that the written premiums had decreased just like they had reported due to not wanting to write all and we also see that the expenses for the claims increased with a couple of millions also which leads to a total of less earnings as could be seen above. During Q1 5.24 € was earned per share which is good news considering that they pay out a bit over 7 € in dividend. Problem with reinsurance is however that one big catastrophe and that money is easily gone.

Conclusion: The earnings are still good because nothing large happened in the world which involved MüRe. The continue to work on giving added value to the shareholders via nice dividend payments and share buy back programs which means that I will remain as a shareholder.


Olof said...

Regarding the share buybacks, do they have a history of reducing the outstanding shares or do they use the treasury shares to use in incentive programs for the employees?

If they reduce the oustanding shares, what's the annual rate?

This is interesting to know since it is comparable to dividends.

Fredrik von Oberhausen said...

Good comment Olof. Thanks!

They are reducing the shares. Since 2006 they have bought back 56.6 million shares to a value of almost 7 billion euro. Each year they decide how much to buy back. For instance in 2012 they bought back nothing due to Fukushima and the big losses they then had to carry.

This year they have already bought back for 700 million so they have been busy this spring.