Munich Re targets a post-tax profit of around 5 billion euros in 2024 thanks to good operational performance in all business segments. The DAX company announced this on Friday. The reinsurer expects a profit of 4.5 billion euros and a revenue of around 59 billion euros for the current year. In addition, the return on capital investment is expected to improve by more than 2.8 percent.

However, these forecasts are made with reservation, as of 2023, the IFRS17 standard will be applied, which regulates the accounting of insurance contracts. The profit under the new accounting stood at 3.6 billion euros in the first nine months of this year already. Nevertheless, Munich Re is also affected by the billion-dollar bankruptcy of the Austrian real estate group SIGNA.

CFO Christoph Jurecka confirms in a conference call that the reinsurer is invested in SIGNA, but only in engagements secured by real estate. Therefore, no significant losses are expected for Munich Re. Reports indicate that the primary insurance subsidiary Ergo has loaned around 700 million euros to SIGNA. Overall, German insurers have invested over three billion euros in SIGNA.

The outlook on profit development convinced investors after the shares reached the 400 euro mark for the first time on Wednesday and profit-taking measures were taken the day before due to new US interest rate prospects. On Friday, Munich Re shares were able to recover in XETRA trading. Nevertheless, the profit target for 2024 is eleven percent above the 4.5 billion euros envisaged for 2023. This reflects market expectations, as analysts expect just under 4.6 billion euros for the current year and just under five billion euros for 2024.

Analysts expressed positive views on the company's ambitious goals, including Philip Kett from Jefferies, who referred to it as "increased ambition." Kamran Hossain from JPMorgan US Bank, while considering the goal as "not significantly above market expectations," emphasized that at least it exceeded the consensus with the plans. Munich Re is known for its cautious forecasts, which are typically surpassed. The initial goal for 2023 was only four billion euros, but was later increased to 4.5 billion euros.

This conservative approach of the company was also mentioned by other experts, including Thorsten Wenzel from DZ Bank. The reporting at the end of the year could be significant for the further stock price, when Munich Re presents its annual figures and reports on the contract renewal for January 1st. Since the beginning of the year, Munich Re shares have already gained a quarter in value and reached a new high with the exceeding of the 400 Euro mark, which was last reached over 20 years ago. Back then, the price fell to its low point of around 50 euros in early 2003.