The war in Ukraine is currently causing the focus of many investors on the stock exchange to rest primarily on the asset classes commodities (gold, silver or nickel) and currencies (Swiss francs or the American dollar).

The shares of corporations that have recently suffered sharp price losses, but which are solid in the long term and still seem worth buying are going down a bit.

One of these companies is known for its attractive dividend yield and comes from the insurance industry.

Munich Re, the Dax group, which has been a good investment for its shareholders in recent years.

However, financial and insurance stocks are not exactly the most popular stocks among Germans.

Apparently, the business is too risky – at first glance, a larger number of natural catastrophes damage the insurance industry, since corresponding payments have to be made to the insured.

On the other hand, larger losses, an increasing number of natural catastrophes and an associated growing awareness of taking out insurance have positive effects on the profit situation of insurers and reinsurers such as Munich Re in the medium to long term.

If a larger number of insurance policies are taken out, sufficient income can be generated to compensate the insured financially in the event of a claim.

In addition, the bottom line is that there is enough profit left over to offer shareholders of insurers and reinsurers an attractive return in the form of dividends or share buybacks, for example.

Have a good year 2021

Accordingly, Joachim Wenning, CEO of the reinsurer Munich Re, said when presenting the latest business results that 2021 was a good year for the Dax group - despite COVID-19, inflation and expensive natural disasters.

The bottom line was a net profit of 2.9 billion euros.

This exceeded the profit target of 2.8 billion euros, while the strength of the balance sheet continued to increase despite high inflation.

Munich Re shareholders can look forward to a rising dividend and the Group's new share buyback program.

The distribution is expected to increase by 12.2 percent year-on-year to EUR 11.00 per share.

This is all the more astonishing when a shareholder takes a closer look at the industry data.

Similar to 2020, 2021 was also characterized by a high number of natural catastrophes for the insurance industry.

Storms, floods, earthquakes and forest fires caused total damage of 280 billion dollars all over the world last year, after 210 billion dollars the year before.

The overall economic damage was the fourth highest ever.

The previous record was set in 2011 with $355 billion in damage.

Around 120 billion US dollars of the total losses were insured in 2021.

According to Munich Re, 2021 was the second most expensive natural catastrophe year for insurers, along with 2011 and 2005.

The previous record for insured losses was set in 2017 at $146 billion (adjusted for inflation).

Hurricane Ida was the costliest natural catastrophe of the year, costing $65 billion in total losses and $36 billion in insured losses.

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