Quarterly Report 1/2009 - Munich Re Group

Interim management report Prospects
26 Munich Re Group Quarterly Report 1/2009
we project that owing to the risk reduction in our investment portfolio our
return on investment will be distinctly below our long-term target of 4.5%.
The uncertainties resulting from the economic crisis therefore apply to both
underwriting business and investments, making a serious projection of the
annual profit for 2009 impossible. All in all, we remain confident with regard
to the Munich Re Group’s value-based corporate development and are adhering
to our long-term objective of a 15% RORAC after tax across the cycle.
Although our goal is quite ambitious considering the currently difficult economic
environment and major uncertainties involved, it does not induce us
to take irrational risks, as it relates to risk-based capital.
After concluding the 2008/2009 share buy-back programme as planned, we
had originally proposed to carry out further share buy-backs totalling over
€1bn for each of the following two twelve-month periods preceding the
Annual General Meeting 2011. Since the economic crisis has deepened and its
implications remain uncertain, however, we believe – on mature reflection –
that it is in the interests of our shareholders to discontinue the share buybacks
for the present. It is more beneficial for the time being to use our comfortable
capitalisation to take advantage of opportunities for organic and
possibly external growth.
For the financial year 2009 and beyond, we still intend to pay our shareholders
an annual dividend depending on the result for the year, our aim being to
maintain the level last reached, i.e. €5.50 per share. It is too early of course to
make a definite announcement.
The statements relating to opportunities and risks as presented in the Munich
Re Group’s Annual Report 2008 apply unchanged.