Munich Re's Milan Push Meets a Stormier Underwriting Climate
Published on 09/24/2026 at 07:11 | Editorial boerse-global.de
Munich Re is pressing ahead with the continental build-out of its specialty insurance arm, even as mounting claims costs in North America test the group's earnings engine. The reinsurer's Munich Re Specialty unit intends to begin underwriting Italian primary-market risks through a new branch in Milan from the start of 2027, targeting small and mid-sized businesses alongside larger industrial clients.
The move answers what the group describes as growing demand for coverage in Italy. Construction and engineering policies, commercial property cover and surety bonds will form the initial focus once operations begin — a piece of the specialty division's wider European expansion plan. Leadership for the venture is already in place: Saverio Longo takes the Managing Director role, while Gian Luca Migliorini oversees underwriting as Head of Underwriting. The pair are charged with establishing the new book in the target segments.
A Summer of Warnings Weighs on the Share Price
The Italian launch lands against a more turbulent backdrop. Roughly a month ago, Munich Re acquired a majority stake in cyber specialist At-Bay, after which the stock gave up 2.0 percent. Some three weeks ago came a profit warning in the US liability business, and the shares have shed 5.2 percent since. Management has also flagged burdens from medium-sized natural catastrophes. Berenberg, for its part, reaffirmed its Hold rating on the stock about two weeks ago, keeping a neutral stance on developments in the property and casualty segment.
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The accumulation of alerts has made the casualty and property division a focal point for investors. Higher claims expenses are squeezing margins, since price adjustments in some segments are taking hold more slowly than anticipated. North America draws particular scrutiny: the company cautioned that underwriting results in US liability could deteriorate further, with premium increases pushed through so far failing to keep pace with rising claims costs. Media reports add that management has warned of growing hail and heat-related losses, while a sector gathering roughly two weeks ago saw Munich Re raise the subject of escalating cyber risks — a topic that briefly lifted the stock 1.2 percent. Even with strict underwriting discipline, the fallout from extreme weather and shifting liability exposures is proving a persistent drag on profitability.
Buybacks Keep Capital Flowing Back
Offsetting the gloom, the reinsurer continues to return capital. A company notice shows Munich Re repurchased 330,611 of its own shares on Xetra between 17 September and Wednesday of this week, bringing total buybacks since the programme began to more than 2.8 million shares. A separate mandatory disclosure puts the latest tranche at 437,788 shares. Such purchases also deepen the group's expertise in specialty markets like digital risks, opening earnings streams beyond traditional reinsurance lines.
The steady repurchases underscore management's capital discipline and offer investors dependable cash returns in a sector dogged by underwriting hazards. In Wednesday's session the stock closed at EUR 502.20, a modest daily decline of 0.3 percent. Year to date, the shares are down 11 percent, and they now sit 13 percent below their 52-week high of EUR 575.40. Berenberg's price target of EUR 565 implies meaningful upside from current levels. The DAX group's market capitalisation stands at EUR 63.13 billion.
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