AM Best Affirms Superior Credit Ratings for Munich Re and Subsidiaries
AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” (Superior) for Munich Reinsurance Company and its subsidiaries, maintaining a stable outlook. These ratings reflect Munich Re's exceptionally strong balance sheet, underpinned by a risk-adjusted capitalisation well above AM Best’s strongest assessment standards, supported by a robust capital adequacy ratio and strong financial flexibility. The reinsurer's operating performance is robust, with a net profit of EUR 5.7 billion in 2024 and a return on equity of 18.1%, supported by diversified earnings across property/casualty, life & health, and specialty insurance business segments.
Munich Re's property/casualty reinsurance division reported EUR 3.2 billion in net profits despite experiencing natural catastrophe and man-made losses aligned with expectations, while the life & health reinsurance and ERGO divisions contributed EUR 1.7 billion and EUR 0.8 billion, respectively. Strong investment results further bolstered the group's overall profitability. The company benefits from a diversified global business profile with largely uncorrelated segments, positioning it favorably amid evolving market conditions.
Additional long-term issuer credit ratings with stable outlooks were affirmed for Munich Re America Corporation and its related subsidiaries, including surplus note issuances by American Alternative Insurance Corporation and Princeton Excess and Surplus Lines Insurance Company. These affirmations underscore Munich Re's sustained financial strength and risk management capabilities within the global reinsurance industry.
AM Best's rating actions reflect confidence in Munich Re's ability to maintain capital strength despite exposures to potentially large losses and the company’s active shareholder return strategy involving dividends and share buybacks. The reaffirmed ratings support Munich Re's strategic positioning in a competitive reinsurance market characterized by improving conditions and ongoing risk landscape challenges. The stable outlook signifies expectations for the company to continue managing enterprise risk prudently while delivering strong operating results.