The History of the Munich Reinsurance Company

After a great fire destroyed much of the city center of Hamburg, Germany in 1842, it was realized that the magnitude of loss that could result from urban fires represented a degree of risk that individual insurers could not comfortably cover. In response, the first reinsurance company, Cologne Reinsurance, was formed in 1846. Carl Thieme had already been successful, working for the primary insurance carrier run by his father, when he left to found Munich Reinsurance Company in 1880. The first year he had only five employees but was successful in achieving thirty-three reinsurance treaty agreements, including one foreign treaty. Munich Re grew rapidly and, by 1885, it had become the largest reinsurer in the world, currently employing more than 40,000 people in over 60 countries. Today’s clients include approximately 5,000 insurance companies in about 160 countries around the world.

Carl Thieme was exceptionally progressive. Long before there were corporate human resources departments, he showed unusual consideration for his employees, providing them with benefits that were advanced for the times. He paid his employees above average salaries and, beginning in 1885, Christmas bonuses were distributed. In the 1890‘s, one finds establishment of retirement pensions, limitation of work hours (“English work hours” of 9 to 4 were introduced), establishment of free lunch provided by the company (a tradition that continues to this day at the home office in Munich) and development of a program that assisted employees in purchasing family homes. In 1905, paid vacation for employees (Erholungsurlaub) was introduced.

Munich Re celebrated its 125th anniversary in 2005. The motto for the anniversary year, “Initiative : Innovation,” reflected corporate qualities that have been present at Munich Re from inception. Founder Carl Thieme was not only socially progressive concerning company–employee relationships but also very innovative in developing new types of insurance products and establishing related new companies. In 1889, he founded the primary carrier Allianz, which originally provided accident and liability insurance coverage. By 1914, Allianz had become the largest Property and Casualty carrier in Germany. The first foreign office of Munich Re opened in Paris in 1886 followed by establishment of office branches in St. Petersburg, Copenhagen, Stockholm and, in 1890, London. The first office in the United States was opened in 1899. Munich Re’s first Property and Casualty reinsurance subsidiary in the United States was established in New York City in 1955 and, subsequently, a wholly-owned, life reinsurance subsidiary was opened in Atlanta, Georgia in 1959 (today’s MARC).

New or special insurance products, which Munich Re developed or participated in, include accident insurance for machines, insurance for travel luggage (developed after a businessman on a railroad platform in Lucern observed sparks from a train’s smokestack fall and smolder on a stack of luggage), aircraft insurance (1910) and insurance for air travel (1919). In 1916, a special department for assessment of substandard life insurance risks was created and the following year Munich Re formed a specialty company to provide credit insurance. Munich Re shared significantly in the loss incurred in the 1906 earthquake in San Francisco since which time it has been investigating, as well as insuring, risks resulting from natural catastrophes. The Geo Risks Research Department of Munich Re has become recognized worldwide for its work in this area, and its Annual Review of Natural Catastrophes has become a renowned publication. In a related expression of its expertise in and concern about environmental risks, Munich Reinsurance Company established in the year 2005, on the occasion of the 125th anniversary of its founding, The Munich Re Foundation, which will fund a Chair on Social Vulnerability at the United Nations University Institute for Environment and Human Security (UNU-EHS). Located in Bonn, the UNU-EHS is dedicated to research and policy development directed at assisting societies (especially those in the group of developing nations) to improve their abilities for coping with various environmental risks. Munich Re offers coverage for a full range of insurance products including not only traditional products but also coverage for such diverse alternative risks as oil rigs, satellites, and risks associated with genetic engineering and information technology.

Munich Re’s Hauptgebaude under Construction
Munich Re’s Hauptgebaude
under Construction (circa 1912)
© Munich Re, Munich

Carl Thieme decided he needed to establish a central location for his company when Munich Reinsurance had so grown that 350 employees required six different buildings to provide adequate workspace. In 1911, he purchased property on Königinstrasse just on the western edge of Munich’s famous Englischer Garten in what was then the neighboring city of Schwabing. The architectural design submitted by the firm of Bieber and Hollweck was chosen. The result was the architecturally acclaimed, beautiful structure that became the Hauptgebaude or main building for the home office of Munich Re, which opened its doors to employees for the first time on March 20, 1913.