Munich Re
Encyclopedia
Munich Re Group is a reinsurance
company based in Munich
, Germany
. It is one of the world’s leading reinsurers. ERGO
, a Munich Re subsidiary, is the Group’s primary insurance
arm.
Munich Re's shares are listed on all German stock exchanges and on the Xetra
electronic trading system. Munich Re is included in the DAX
index at the Frankfurt Stock Exchange
, the Euro Stoxx 50, and other indices.
In 2010 the company's equity amounted to €23.0 billion. The group’s premium income for the year (gross premiums written) was €45.5 billion, with its consolidated profit amounting to €2.430 billion.
In February 2010, U.S. investor Warren Buffett
became Munich Re's largest single shareholder with 10.2 percent of the company.
The BBC reported in May 2011 that in 2007 a subsidiary of ERGO, Hamburg-Mannheimer, held an orgy with around 100 guests and 20 prostitutes in order to "reward" salesmen. Prostitutes were stamped for every service rendered, and those wearing white wristbands were reserved for board members or top performing salesmen.
As a result of this ERGO has adopted a package of measures improving the quality of advice and strengthening compliance within the company. Independent agents will undertake, by means of a code of conduct, to comply with strict rules governing relations between the company, its sales agents and customers.
in 1890. Carl von Thieme was head of Munich Re until 1921, and Wilhelm von Finck served as Chairman of the supervisory board
until 1924. Munich Re became renowned after the San Francisco Earthquake
of 1906 as the only insurer that remained solvent after paying out all the claims.
Munich Re’s primary insurance operations are mainly concentrated in the ERGO Insurance Group
. ERGO writes all types of life and health insurance and most types of property and casualty insurance. Outside Germany, ERGO is present in more than 30 countries around the world, servicing around 40 million clients. Members of the ERGO Group include the insurance subsidiaries D.A.S., DKV and Europäische Reiseversicherung AG, and the IT service provider ITERGO.
With a gross premium written of €17.5bn in 2010, ERGO is Germany’s second-largest primary insurance group following Allianz AG.
Free float is stated to be 90%, with around 140,000 shareholders (February 2011).
Shareholder profile:
Most shareholders are located in North America (around 30.6%), Germany (28.9%), followed by other European countries (27.2%), before the UK (12.7%).
.
Reinsurance
Reinsurance is insurance that is purchased by an insurance company from another insurance company as a means of risk management...
company based in Munich
Munich
Munich The city's motto is "" . Before 2006, it was "Weltstadt mit Herz" . Its native name, , is derived from the Old High German Munichen, meaning "by the monks' place". The city's name derives from the monks of the Benedictine order who founded the city; hence the monk depicted on the city's coat...
, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
. It is one of the world’s leading reinsurers. ERGO
ERGO Insurance Group
ERGO is one of the major insurance groups in Europe. Worldwide, ERGO is represented in more than 30 countries and concentrates on Europe and Asia. In Europe, ERGO claims to be no. 1 in the health and legal expenses insurance segments, and in its home market of Germany it is among the market leaders...
, a Munich Re subsidiary, is the Group’s primary insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
arm.
Munich Re's shares are listed on all German stock exchanges and on the Xetra
Xetra (trading system)
Xetra is a worldwide electronic securities trading system based in Frankfurt, Germany. It was created for the Frankfurt Stock Exchange and launched in November, 1997. It is operated by Deutsche Börse....
electronic trading system. Munich Re is included in the DAX
DAX
The DAX is a blue chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. Prices are taken from the electronic Xetra trading system...
index at the Frankfurt Stock Exchange
Frankfurt Stock Exchange
The Frankfurt Stock Exchange is the world's 12th largest stock exchange by market capitalization. Located in Frankfurt am Main, Germany, the Frankfurt Stock Exchange is owned and operated by Deutsche Börse, which also owns the European futures exchange Eurex and the clearing company...
, the Euro Stoxx 50, and other indices.
In 2010 the company's equity amounted to €23.0 billion. The group’s premium income for the year (gross premiums written) was €45.5 billion, with its consolidated profit amounting to €2.430 billion.
In February 2010, U.S. investor Warren Buffett
Warren Buffett
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world. Often introduced as "legendary investor, Warren Buffett", he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is...
became Munich Re's largest single shareholder with 10.2 percent of the company.
The BBC reported in May 2011 that in 2007 a subsidiary of ERGO, Hamburg-Mannheimer, held an orgy with around 100 guests and 20 prostitutes in order to "reward" salesmen. Prostitutes were stamped for every service rendered, and those wearing white wristbands were reserved for board members or top performing salesmen.
As a result of this ERGO has adopted a package of measures improving the quality of advice and strengthening compliance within the company. Independent agents will undertake, by means of a code of conduct, to comply with strict rules governing relations between the company, its sales agents and customers.
History
In 1880, Carl von Thieme, a native of Erfurt, whose father was the director of Thuringia, founded Münchener Rückversicherungs-Gesellschaft together with Wilhelm von Finck (co-owner of the Merck Finck & Co bank) and Theodor von Cramer-Klett. This was followed by the founding of Allianz Versicherungs-GesellschaftAllianz
SE is a global financial services company headquartered in Munich, Germany. Its core business and focus is insurance. As of 2010, it was the world's 12th-largest financial services group and 23rd-largest company according to a composite measure by Forbes magazine.Its Allianz Global Investors...
in 1890. Carl von Thieme was head of Munich Re until 1921, and Wilhelm von Finck served as Chairman of the supervisory board
Supervisory board
A supervisory board or supervisory committee, often called board of directors, is a group of individuals chosen by the stockholders of a company to promote their interests through the governance of the company and to hire and supervise the executive directors and CEO.Corporate governance varies...
until 1924. Munich Re became renowned after the San Francisco Earthquake
1906 San Francisco earthquake
The San Francisco earthquake of 1906 was a major earthquake that struck San Francisco, California, and the coast of Northern California at 5:12 a.m. on Wednesday, April 18, 1906. The most widely accepted estimate for the magnitude of the earthquake is a moment magnitude of 7.9; however, other...
of 1906 as the only insurer that remained solvent after paying out all the claims.
Structure
Besides its reinsurance business, the Munich Re Group also transacts primary insurance business through the ERGO Group, and, since 1999, asset management through MEAG (MUNICH ERGO AssetManagement GmbH). In 2010, the Group’s gross premiums written totalled around €45.5bn.Reinsurance
Munich Re has around 5,000 clients (insurance companies) in about 150 countries. It assumes part of the risk covered by these insurance companies, as well as providing comprehensive advice on insurance business. In addition to its Munich head office, Munich Re has more than 50 Business Units around the world. Munich Re provides reinsurance cover for life, health, casualty, transport, aviation, space, fire and engineering business. In 2010, gross premiums written in the reinsurance segment amounted to around €23.6bn.Primary insurance: ERGO Group
ERGO Insurance Group
ERGO is one of the major insurance groups in Europe. Worldwide, ERGO is represented in more than 30 countries and concentrates on Europe and Asia. In Europe, ERGO claims to be no. 1 in the health and legal expenses insurance segments, and in its home market of Germany it is among the market leaders...
. ERGO writes all types of life and health insurance and most types of property and casualty insurance. Outside Germany, ERGO is present in more than 30 countries around the world, servicing around 40 million clients. Members of the ERGO Group include the insurance subsidiaries D.A.S., DKV and Europäische Reiseversicherung AG, and the IT service provider ITERGO.
With a gross premium written of €17.5bn in 2010, ERGO is Germany’s second-largest primary insurance group following Allianz AG.
Asset management
Founded in 1999, MEAG MUNICH ERGO AssetManagement GmbH manages the assets of Munich Re, ERGO, and external clients. Their purpose is to manage and increase investments of Munich Re and ERGO and third parties. It now manages for institutional and private investors in and outside of Munich Re and ERGO around € 207 billion (as of 31 December 2010).Munich Health
Until the end of 2009 this segment of the company was under reinsurance and primary insurance however since the beginning of 2010 it is the company's fourth major division. It oversees all of the group's health reinsurance as well as health primary insurance business abroad (outside of Germany).Ownership (as of 02/2010)
- Berkshire HathawayBerkshire HathawayBerkshire Hathaway Inc. is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States, that oversees and manages a number of subsidiary companies. The company averaged an annual growth in book value of 20.3% to its shareholders for the last 44 years,...
Inc. (10.2%) - BlackRockBlackRockBlackRock, Inc. is an American multinational investment management corporation and the world's largest asset manager. BlackRock is headquartered in Manhattan, New York City, New York, United States and is the leading provider of investment, advisory, and risk management solutions...
, München (6.2 %)
Free float is stated to be 90%, with around 140,000 shareholders (February 2011).
Shareholder profile:
- Institutional investorInstitutional investorInstitutional investors are organizations which pool large sums of money and invest those sums in securities, real property and other investment assets...
s (70.4 %) - Private shareholders (10.6 %)
- Investment companies (7.3 %)
- Insurance companies (1.2 %)
- BankBankA bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...
s (0.3 %)
Most shareholders are located in North America (around 30.6%), Germany (28.9%), followed by other European countries (27.2%), before the UK (12.7%).
Key figures
Accounts prepared according to IFRSInternational Financial Reporting Standards
International Financial Reporting Standards are principles-based standards, interpretations and the framework adopted by the International Accounting Standards Board ....
.
| Year | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
|---|---|---|---|---|---|---|
| Gross premiums written (€bn) | 38.2 | 37.4 | 37.3 | 37.8 | 41.4 | 45.5 |
| Operating result (€bn) | 4.156 | 5.877 | 5.573 | 3.834 | 4.721 | 3.978 |
| Taxes on income (€m) | 1,014 | 1,648 | 801 | 1,372 | 1,264 | 692 |
| Consolidated result (€bn) | 2.751 | 3.519 | 3.923 | 1.579 | 2.564 | 2.422 |
| Investments (€bn) | 177.2 | 176.9 | 176.2 | 174.9 | 182.2 | 193.1 |
| Technical provisions (€bn) | 154.0 | 153.9 | 152.4 | 157.2 | 163.9 | 171.1 |
| Equity (€bn) | 24.3 | 26.3 | 25.3 | 21.1 | 22.3 | 23.0 |
| Return on equity (%) | 12.5 | 14.1 | 15.3 | 7.0 | 11.8 | 10.4 |
| Number of employees as of 31. December | 37,953 | 37,210 | 38,634 | 44,209 | 47,249 | 46,915 |