Münchener Rückversicherung preliminary result 2013

One of my probably most solid investment came out with a press release yesterday and it can be found here. All the details that I bring up in this short summary are coming from that release.

Upon the release the market made a little victory dance around the bonfire and the share price jumped up a bit more than 1% but during the day it slowly went down, down, down. What was then in it?


What was then good in the report:

• Increased profit from 3.2 billion € in 2012 to 3.3 billion €
• Increased dividend from 7.00 € in 2012 to 7.25 € for 2013
• Will buy back shares for 1 billion €
• ROE remained at 12.5%
• The ERGO insurance section actually managed to make a profit
• and the Health section also made a profit

What was negative:

• Profit was up with only 3.1% and what is worse is that they seem to have struggled a little to get that buy juggling tax reliefs and due to loss carry-forwards.
• The dividend increase is only 3.5%.
• Gross written premiums were down which they claimed was due to currency effect but at the same time they had a significant decrease with gross premiums with the re-insurance part and they claimed that the competition has become keener and there has started to be price competition on the reinsurance market which is MüRes cash-cow.

Conclusion: This preliminary report raised some question marks for me. I had to go back and forth in the text to build together the sentences and the explanations and that I do not like. MüRe is supposed to run with an open deck of cards and it felt as if they were pushing too much on the "good" points. It will be interesting to see the annual report when it arrives in its full splendour. I got this wonderful company cheap and I will of course keep my shares for the future.