Re-turn of the buyback

1 Oct 2009 By Nicholas Paisner

The German reinsurer is resuming purchases of its own shares a rare instance of a financial institution returning capital. But Munich Re is in an unusually strong position. For most financials insurers included capital preservation must still be the order of the day.

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Munich Re announced that it would resume its share buyback programme on October 1. The company has stated that it will repurchase up to E1bn of stock before the AGM in April 2010. This follows a seven month suspension of the programme.

On the basis of the current share price, the planned repurchases would amount to around 9.2m shares or 4.7% of the share capital.

As part of its May 2007 Changing Gear programme, Munich Re announced share buybacks of more than E5bn. Of this amount, share buybacks totalling E3bn have already been completed.

Henri de Castries, Chairman of French insurance group Axa, said that European insurers did not need additional capital at the Merrill Lynch Banking & Insurance conference on September 29.

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