The World's Largest Reinsurance Company: Analysis of Munich Re - YouTube

The Munich Reinsurance Group is the largest reinsurance company in the world. So what is the reinsurance?

I'm sure you all know what insurance is

So what an insurance company does is that it by the risk from individuals?

So let's say you are in the future you own a house and you don't what?

You have to cash five euro a hurricane to come and destroy your house because this is something you cannot do

This is something out of your control. So let's say a hurricane comes and

Destroys you how you will lose all your belongings all your money

So the insurance company what it will do it will it will sue this risk?

so you have to pay the insurance company every month or every year and

If a hurricane comes the company will give you the money for the repairs

this is what insurance company does and it's not just about the

house of our properties and insurance company insures health life and

Automobile so many think that insurance companies can insure insurance company

They always have a big cash flow coming in

This is one business along with banks where there is always this big cash flow

And this is one of the things that were on the Fed understood and that's why we put many

Insurance companies early on in his B's in his career in order to get discussed to invest in other companies

This is not something easy to beat bank because of regulations but with insurance companies in the United States

This is something easy to do. So he was able to do this now coming back to military insurance company

So what is what is a big insurance company? The insurance company is an insurance company for other insurance companies

So let's say there is an insurance company which has millions and millions of policies sold

to business and millions of individuals now

They want to hedge this risk because they are when they are selling these policies

They are taking the risk from the individuals, but now they all have this risk. So what this?

Company is going to do they are going to sell this risk now to a reinsurance company

So every insurance company will have thousands of the insurance companies who ask not yet

So they are not connected to the individuals

But they are connected to the insurance companies and they are buying risk from the insurance companies

So there are well diversify because they are buying risk from all over the world

There are a few insurance companies in the world and the Makri insurance company is the largest

of the temple the second largest the insurance company the world is Swissvale insurance group and

The third largest is berkshire hathaway reinsurance

So in the purchase of a portfolio, there is a reinsurance completely

This is a hundred percent owned by Berkshire Hathaway and it is not traded on an exchange

So the military insurance company it t has collided in 160 countries

4000 insurance companies after against the military incident group has five main components

So apart from being a reinsurance company. It also has its own insurance company called echo here are the five main

Components of this business there is life and health free intranets

property casualty

intervention, these two are the

insurance part of the business now our ask an insurance company, which is called a go up trendy and

100% owned by the Manila Insurance Group. So there is a group international. There is a good property casualty insurance

And a good life and health insurance

so ago 69% of the sales of the hippo comes from Germany and

Going to national means is everything outside of Germany

If you look at the stock price of uniquely Insurance Group

You will notice something like in 2000 the stock crash it crashed heavily and it did not recover since then

So what actually happened I?

read all the reports of this company from 2000 until

Now to see what really happened in the business and I can tell you there's only two events. Oh

You may say it's only one event. We change everything for this company and it's 911

So the crash did not actually happen in 2000 in 2000

it was crushing because the whole stock market was crashing because of the dot-com bubble burst II so when the dot-com bubble burst

the holes of market in America and even China in Europe was crushing and

That's why the stock price was falling the stock price of military insurance

but what actually happened in 2001 on that day 9/11 2001

When there were the attacks on the World Trade Center and other places in the United States?

the company lost one third of its market value in the singularity, but eventually it

recovered, but not fully and

continued to crush and eventually when the Iraq war started there were more and more loss of market value and

it crushed to a very low point in 2003 and

it started recovering and

In 2008 there was a financial crisis and there was a little graph but it's still recovering now

So why was affected by 9/11 is because when night never happened?

There was a type of risk that insurance companies. I'd never dealt with before it was the risk of terrorism

this was not something that insurance companies were prepared for and

as I

Realized company this was happening all over the world the insurance companies

usually they are well diversified because if there is a hurricane in the United States and

The weather is good in Europe

This year will be bad in the night as a particularly could be good in in Europe. This is how it's happened

but 9/11 changed everything because now the risk was everywhere all around the world when you see the

the richest country the most harmful country of all time being attacked by terrorists

This is something that scares everyone and this changed the whole business of insurance

both of the Internet's and

eventually when there was an Iraq war in 2003, this also was something that that

Insurance companies were not prepared for since the end of the Cold War

We were not prepared for both wars and if it wasn't

welcoming and

Nobody knew

Where was the screen because the George W Bush said that Iraq had the nuclear weapons and people were scared that maybe there will be

a tough sometimes of nuclear war this this is something

Insurance companies were not prepared for anyone in reinsurance company

But still they were able to maintain a constant

Increase in dividends because for more than 50 years this company has been increasing dividends

This company has been around for more than 130 years and they have been around for the First World War the Second World War

And they are still around today

This is a company which has been going over all these years, but only in the last ten years

They have been a slow growth

So should we ask the investors as value investors take this opportunity now to invest in this company?

Because there is a slow growth now that doesn't mean that in 20 years. This company will wind up broke and

To know that we should look at the fundamentals. I thought that buying shares of this company in the August 2017 at

179

Euros per share and the earnings per share are right now 17 point 2 3

Euros and the book value per share is one hundred and eighty two point two five numerals

So if you look at the earnings per share, it has a p/e ratio of around 11. So it's it's not so high

it's normal for such companies for financial companies right now because the

loss research under 2000 in a financial crisis

This has been the normal for financial companies. But one thing that I really like is the book value per share

it's hundred and eighty two the

Book value per share again is hundred hundred and eighty two. It's almost the same under stock price

so if anything bad happens to the company

It has to go back all the access that the company currently owns is the same and stock price

So if you are investing in this company

It is as if you're buying more than

That marketing if you invest 100 westeros in the company you are getting 120 years to learn

So this is a real power. This is a reality. This is the light of

Value stock the real value stock and this is something that you will not soon Americana with this with huge valuations

But in Germany with this company is such a sector. This is happening right now

So the company has heard in the depth at all, and it has a current ratio of 0.3

So this is this company is very healthy financially lost

yeah was not such a great year for this company because there were huge hurricanes in the United States and

It was not a good year for insurance companies and that's why it's not a good year

It was not a good year for reinsurance also, but this year was better and it's a recovery

I thought told you it's not required very from what happened in 2001, but eventually I'm sure it will recover

It's already more than 10 years and it will be soon 20 years since that event

But I'm sure that this sector is really ready and the value at the moment

I even look at the Swiss reinsurance group and they also undervalued. I don't know about the berkshire hathaway insurance because is

privately owned by in Berkshire Hathaway

But I can tell you that this this sector this is one of the safest sector because even if it's buying risk

This sector this company is buying risk from so many

Different companies that it reduces the risk and they are not like the big banks were doing the financial crisis dying

Since not numbered attendant expense a title such as a city or synthetic city owes these super things

they are only buying insurance from other insurance companies and

I'm going to invest in this company because it's a

Great price and the dividend yield is more than four percent

So even in the coming years it doesn't it doesn't grow as much as you would expect

still you're getting the dividend and

Eventually this this sector this company is going to grow thank you for watching this video, please like subscribe and share

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