Good morning, ladies and gentlemen, and welcome to our Munich Re financial press conference for our consolidated financial statement 2021. Unfortunately, we cannot welcome you in person here in Munich due to the pandemic. Thank you very much for having joined us virtually. This conference will also be made available after today's conference on our website. Now, of course, today we have Dr. Joachim Wenning, our CEO at Munich Re, and Dr. Christoph Jurecka, our CFO at Munich Re. Before we get started with the presentations, please do allow me some housekeeping remarks for our conference call. We are working with ON24, the conference system. You have different resizable windows on the screen. Should you have any technical issues, please press F5 to refresh the page. Right after the presentation, we will have the usual Q&A session for our journalists.
Already during the session, you can already phrase your question in the Q&A box. We will collect them and answer them afterwards. Thank you very much. With that, Joachim Wenning, let's start the presentation.
Thank you, Andreas. Ladies and gentlemen, colleagues, I'm happy to be here today together with Christoph Jurecka, sitting to the right of me and talk about the annual accounts of 2020, 2021, and give you an outlook of 2021. To sum up, 2020, 2021 was a very successful year for Munich Re. Despite the major challenges we face, inflation pressure, for instance, higher share of, say, major nat cat, major losses, that is, and COVID, we nevertheless had an excellent result of EUR 2.9 billion. This means we were able to achieve our EUR 2.8 billion ambitious goal and even exceeded it. We have shown excellent performance in all business lines, and we're able to handle and balance out each and every challenge we faced.
The diversification, which we mentioned several times, it really had— it showed its full effect. Nevertheless, we were able to prove our ability in terms of earnings despite all these difficulties. I can say that the result we achieved is a very solid one. We did not only generate earnings, but in spite of the conservative approach which we have in our balance sheet, all this was strengthened. Now, we would like to have our shareholders share in this success and suggest that we raise the dividend to EUR 11. Shares to the tune of EUR 1 billion to be repurchased.
Now the next page, we want to have a closer look at the things that we've achieved in 2021 in comparison with our plans in terms of Ambition 2025. Now, the conclusion beforehand, after this year, we can say we are fully on track. This refers to the ROE, return on equity. I can say that we've reached the level which we have planned to achieve by 2025. The year one after the pandemic, that is 2021, we hadn't planned any increase of our earnings, but nevertheless, I can say that the result is 5% higher compared to 2020. This, of course, in normalized terms.
As Munich Re always is achieving or trying to achieve a sustainable dividend increase, and here we see an increase of more than 12%. Now, this means we exceed our plans considerably. Our capital portfolio is strong solvency ratio, even after the proposed dividend and even after the share repurchase, it is still above the optimum area of 220%. In addition to the strong performance in our business in 2021, ERGO and reinsurance, both business lines have done very well. ERGO has shown a remarkable performance, positive performance with a return on equity of approximately 10%. This despite the flood losses which we've seen or claims which we've seen in last year. ERGO achieved a pleasing, a gratifying, profitable growth.
ERGO, I can say, is very well on track in order to achieve the targets of Ambition 2025 and also be able to distribute considerably high dividends to the parent company. You cannot see it right away, the figures. We've also achieved considerable operative successes. This includes the exchange of legacy systems and surely the replacement by modern IT systems, as well as progressive and ongoing digitalization. This also means we've increased customer satisfaction. The so-called runoff platforms, which you can see on the next page, are being widely talked about, and I would like to comment on them. In 2017 we decided that our life Germany portfolio is to be separated from our new business. Well, in the beginning, we really thought of selling this portfolio.
We have reached the conclusion that an internal runoff would be the most value-maintaining decision, the classic portfolio to be maintained. This is an approach which for financial strategic, but also for customer reputation and sales aspect must be seen as the right decision. All the other problems of this portfolio have been addressed, and we used hedging and reinsurance solutions, and we're able to protect ourselves against downside risks. Since then, we have got the upside potential. We can say that in the meantime, we now are able to contribute a reliable contribution to the Munich Re result. Portfolio management consistent approach and maintaining and preserving customer interest, I can say that ERGO has doubled its say performance. Nevertheless, we also have high valuation reserves, offers insurances, bringing and generating stable returns.
In addition to the legacy portfolio will also contribute to a risk diversification in the group, and this means we increase our competitiveness. That is the competitiveness of Munich Re. Now, in simple terms, ERGO is doing the same as, specialized runoff companies or platforms are doing, and maintains the margins for itself, but also for its customers. The new portfolio mix in life, and this is what you see in the center of this graph, is really developing very well. A share of the legacy business, that is the back book, is decreasing as desired and is doing so consistently. Market risk and biometric, sorry, products with low market risks and other aspects. Here, we've seen increases.
The portfolio management system developed together with IBM, we have now a strategic option in our hands, which allows us to look after third-party life portfolios, and this means we are able to exploit other advantages and generate additional earnings or returns. ERGO's growth. The growth in 2021 was really a gratifying one with an increase in the premiums by about 3.7%. Property-casualty, Germany. Here, we achieved a very good growth far beyond the market average, and the profitability stayed on a high level. This refers to the private customer business as well as the commercial and industrial business. These two made a considerable contribution. Also the international side. Here, we can say that we really made progress and had a success.
Despite the runoff in the Belgian business and our situation with our Indian and Chinese businesses, we're still on good footing. The drivers were the very strong property and casualty business in Poland and Austria, as well as an increasing demand for health insurances in Belgium and Spain. Life and health, and this is what you see. On this chart, here, despite the runoff of the classical business. Here, the growth was a bit more moderate as was expected. Now about reinsurance. With an ROE of approximately 3.5%, we can say that in 2021, we've reached the upper limit of where we wanted to be in 2025.
In order to generate high returns, we use any market opportunities and chances which open up when it comes to organic growth. We benefit of the market cycles. At the same time, we also want to maintain the market leadership in business lines like cyber, as well as structured reinsurance solutions. We are developing this Risk Solutions. In this area, we are also making progress. This means that we were able to to step up the premiums, but also the results. Even life, adjusted for the COVID losses or claims, which were very high in 2021, we can say that in reinsurance life and health, we have delivered an excellent result. That is the increasing profitability of the biometric portfolio is still very sound.
In addition, the financially motivated reinsurance business also offers financing as well as capital-relieving transactions, all this very stable. In addition, we are also continuing investing in digital business models, and this refers to more than 50 initiatives which we've seen in six focal areas. Of course, these are described in the footnote of this chart. I can say that I personally am very happy that I believe I can detect that all these investments put together, and of course, each and every investment together, but I should say all of them together will develop very well by 2025 in terms of volumes and returns or earnings. Now the January renewal phase, here the upward trend continued with a view to crisis.
The reasons are increased, claim assumptions, the low interest rate environment and also the ongoing inflation pressure. Actually, I can say that we got an increased demand, and we faced here a smaller capacity requirement, and this is something which benefits the business as a whole. If you look at the nominal price increases, which we've seen in the various markets and which we recorded, all this, a s I said it before, it also takes into account the higher loss expectations. Sometimes you just have to assess things on a higher level without being better right away. All the price increases, which you see here is 0.7%. This is in the center of the chart.
T his has been adjusted for the risks and any business mixes. You will see the price increase only, which refers to the margins. All in all, I can say that Munich Re, when looking at the flight to quality aspect of this renewal phase, this was of benefit to us, and 14.5% means that we were well-positioned for further business growth. Now let me move on to the next chart and a few, say, final remarks about cyber insurance. Here I can say we have grown at 70%. Now it is important here that the increase in the premium volume comes from rate increases or installment increases and hardly from an expansion of our business. Now the capacity on offer in the marketplace has gone down, no question about it.
I'd like to emphasize in this respect that we continue to have a very high underwriting discipline and respective risk management. The downside risks surely are kept, at bay, if you like, so that our models and this in terms of various accumulated risks can be updated continuously, internally as well as externally. This is based on any findings or information which we get from our partners. Now I change the subject, if you'll permit me to do so. The next or rather the next two charts. Here, I would like to draw your attention to two major challenges which we face, inflation and truly nat cats, the respective volatility, and these are the problems the insurance companies are facing at present.
After the slump of the economy at the beginning of the coronavirus pandemic and then a fast recovery because of the increasing demand, at the same time, delivery bottlenecks and increasing energy prices, inflation has reached the peak when you compare it to the last 10 or more years. Now these price increases are at the expense of the insured people. They are even more pronounced in construction materials, for instance, timber or other materials. They are affected by this. Now if you look back at January, the experience which we have made then meant that the increased volatility, which we've seen because of the natural catastrophe claims led to higher prices for the insurance protection, which is good for our industry, of course.
At the same time, this volatility also, gives this reason for concern for some of the analysts. Let me anticipate or say it now, volatility is part and parcel of our business, of the business of any reinsurance company. Volatility is the reason why we of course have the respective, aspects in the primary insurance business. All this is connected. Now for some industries and non-insurance industries, the inflation is really a problem. If you can't pass on higher prices to the customers, or if they cannot or do not pass them on, then of course they will lose margins. If they increase prices, then they might lose customers. Now we, the insurers, face the inflation in different ways.
The business of Munich Re can be subdivided into three major clusters. One of the clusters is, and this is what you can see on this chart at the bottom, we call it a business which is hardly influenced by inflation. the promises in the life also related to biometric products or all the other possibilities which we have for now adjusting premiums or prices. Now, the business in all the other clusters, going from the bottom to the top, here we see that the inflation that it is subject to the inflation more so. This refers to the casualty business, but we have to distinguish between two types of businesses, the new business and the business with regular customers or clients. Now, the contract business or underwriting business is to be renewed every year.
We take into account the increased inflation, and we do so directly when defining our premiums. This means the customers are paying for the inflation. Now when looking at the portfolio business, here the situation is different because here prices or premiums have been defined in the past and often paid in the past. Our conservative reserve policies enables us to cushion off any negative developments. For 2020 and 2021, we said that we want to increase the reserves, and of course, Christoph Jurecka is going to give you more details about this aspect of our business. Now, in order to actively reduce the inflation risks, we invest in capital investments, the inflationary or inflation-linked bonds.
Although we take into account the consumer price development only, but nevertheless, we still face a basic risk. Nevertheless, it's a very good hedging aspect, not mentioning any other things like investments in shares, in infrastructures, in buildings, et c . This, in historical terms, they are also a protection against inflationary developments. The conclusion is our portfolio and very cautious reservation practice and the hedging of inflationary risks in our capital investment portfolio mean that we can keep the inflation under control. There isn't a major reason for any, say, major concerns. Net Cat business. Here we have proven that we can keep volatility within specific limits, and we've got a strong balance sheet total, very good capital capitalization.
Of course, this will also mean that we will be able to keep our business under control. Together with the climate change, validity of the models used by the insurers is being questioned frequently. We believe that our models are very well developed. They take into account data which go back far into the past, and they also take into account, as a matter of course, the latest scientific findings of research and development. Surely, we also take into account, as far as is possible, any future scenarios. This is the basis for any adequate pricing. Now a small technical remark. W hat you can see on this chart, looking at the business development, like I've just described, and the recent developments with a view to the Nat Cat claims, we can say...
Of course, all this is contained in the various pricings or premiums, but we nevertheless can say that our major loss expectations has risen from 12% to 13%. Now, here it is important to understand that this has no effect on the combined ratio. It will not change, remains unchanged, and it will not have no influence on the capabilities of our business. What does it mean? It means that we just see a shift from the basic claims, less than EUR 10 million, towards major losses, meaning exceeding sums of EUR 10 million. I think what I want to underline here or emphasize here are the opportunities and chances which this Nat Cat business offers us because there are considerable insurance gaps.
At the same time, we also observe an increased demand because of an increased, say, uncertainty, and this is also due to the climate change. Munich Re can offer enormous capacities for things for which we can find a high demand in the marketplace, and this within the limits which we define for ourselves. But we do not shy away from volatilities insuring natural catastrophes. I can say that this is one of our most profitable business lines, and I believe that the capacities has to be seen now in order to make sure that we can generate the respective margins. Next page. Here, we want to show you that just one business line is not necessarily the result or earnings driver.
I can say this is part of our Ambition 2025, that we have a few less volatile business lines are to be expanded, and doing so, increasing the stability of the business. Less volatile business lines, well, what does it mean? It means the entire ERGO business, life, health, reinsurance, Risk Solutions business, and you may also saying structured solutions in the property loss business. This is what we take into account. Then, if we weighing the respective business lines, the better the development of earnings or results will be in the future. Next page. Here we can say this is about the Munich Re climate approach, in accordance with the Paris Agreement. The strategy of Munich Re means that we want to reduce our CO2 emissions from our own business operations or activities.
This is what we call decarbonizing. On the other hand, we have enabling. This means we are promoting and developing climate protection measures, i.e., promoting or supporting climate-friendly technologies. We want to reduce CO2 emissions, and on the capital investment side, we have set ambitious interim targets so that by 2050, we will be able to achieve a net zero portfolio. On the insurance side, we have very strict underwriting rules, thermal coal, for instance, but also for oil and gas productions. At the same time, which is also important, which role we play as an enabler, that is an insurance company, which is or who is enabling, which means together we insure risks together with the new energy sources. This means we will be able to promote the transition from the fossil fuels to the, say, alternative fuels.
As you can see on this chart, when it comes to decarbonization in 2021, we really have made some good progress in this respect, and this certainly is reflected on the capital expenditure or investments if you look at the figures. To be fair, I want to remark that the coronavirus as a slump which we've seen has really been favorable to us. Of course, even adjusted for this effect, the situation just looks good on the insurance side. This is in the middle of this table.
You see that in 2021, we have seen, as we announced before, a transition year so that we can prepare our customers or clients that they are going to face a more restrictive underwriting policy in terms of climate change, CO2 emissions, and therefore we are going to report on this in 2022 only. Looking at our own activities and operations, we can say there is 12% fewer CO2 emissions per members of staff by 2025. We make a contribution in this respect, target for Munich Re and the net zero CO2 emissions. This is what we would like to achieve by then. I can say that we are really very well on track in this respect.
Nevertheless, I just want to draw your attention now to you that traveling in 2021, but also in 2022, will certainly, distort the figures at our expense. From January 2021, we set ourselves the target to increase the number of women in higher echelons, and we want to achieve the respective result by 2025, i.e. raise it by 40%. For me, personally, as well as for the Board of Management, this is really priority. Diversity and inclusion measures really show an effect. The share of women in higher positions has risen in all business segments, and you see 37.8% is the figure given here.
I can say this also means that we are really in a good way to reach our midterm result target of 40%. W hen looking at improving our talent management, I can also say that here the share of women in the management platform, and this has to do with the high potential program, it has risen from 31% to 38% within one year. This is not enough. There will be more in the future when talking about diversity and inclusion. We just have to take the next steps in order, say, in addition to women on these higher echelons, we will be able to deal with more and additional relevant aspects in our business operations. To sum up, I can say that our strategy is really paying off very well. We've got...
Which is certainly above the capital cost together with very good growth, and we will be able to do more. Shareholders can be offered attractive payouts or distributions of dividends. Also, as a result of a positive price development, they can have a share in this wonderful success, and this is also reflected in our Total Shareholder Return, which is shown on the screen. If you compare ourselves with our peers, then I think we really look very good since the time we've set this as a benchmark or a standard. Now, this brings me to the last chart, and it gives you a perspective or an outlook of our business until 2025.
We expect a net result of EUR 3.3 billion, driven by continued increase of our premiums as well as an improvement of profitability. These are my concluding remarks, and I hand back to Andreas. Thank you very much for the time being.
Thank you very much, Joachim. One more note to all the journalists. You already have the option now to write your questions in the Q&A box and to send them in. We have already received the first few questions. Following the presentations, of course, we will answer those. Now I would like to hand over to Christoph Jurecka.
Thank you very much. Good morning, ladies and gentlemen. It is my pleasure to introduce to you excellent numbers today, and these numbers are excellent despite higher net cats numbers, despite low interest rates, despite a significant strengthening of our balance sheet, and despite pandemic risks, which once again were quite significant. Let us take a deep dive on page 22. We have strong results. Joachim Wenning mentioned it, EUR 2.9 billion IFRS net income. The goal was EUR 2.8 billion, so we've actually outperformed our goals significantly despite the fact that we were able to strengthen our reserves. This is really good. Also, of course, looking at the very volatile year that we are facing, you can see that on the capital markets. We have profited off very strong growth, especially in reinsurance, but also in the ERGO segments.
This is while we are very profitable in the operational business, which is nice. Of course, we also need to point out the very strong ERGO net result of EUR 605. Also from an economic perspective, we are doing really well, 227% solvency ratio. That is a number where the dividend has already been taken off. The share buyback is only going to be taken off at the end of Q1, but if we were to do that, we would actually end up in a solvency ratio, which is still at the top range of our ideal capitalization range. The target capitalization is, of course, also really beneficial for us because we're so strong. Now, the economic earnings was EUR 8 billion in the year.
That is an extraordinarily high number, driven by the same good operating performance we can see in the favorable in the markets and also a favorable capital market development. Our HGB result, so due to the German commercial code, is EUR 4.1 billion. That is a very high number, again, driven by a pleasing business development and a one-off effect related to changes in the setting of equalization provisions. The distributable earnings once again grew due to the HGB results, and therefore also support our Ambition 2025 capital management strategy as we have already announced it. This brings me to the next page, and here I would like to give you some more details on COVID-19. The COVID-19 effects were lower in 2021 for Munich Re than in 2020, but with EUR 1 billion in losses, it was still quite significant.
This mostly impacted reinsurance. There was no huge impact at ERGO. Outside of course, the human suffering, this is also still a very huge burden. The main driver was non-life, as it was in 2020. In 2021, instead it was life insurance with EUR 785 million in mortality losses. This was significantly impacted and also significantly higher than what we thought of in the beginning of the year. For 2022, we really have to say that the pandemic is still not over, and also in 2022, we are expecting significant losses yet again. The current expectation is at EUR 300 million in mortality losses in life and health, and that is an estimate which is based on our current knowledge on how the pandemic develops.
This does not include, for example, another severe wave in the fall or the winter of this year. That brings us to the next page. A couple of words on Q4. This is of course, in the aggregated annual numbers, so I'm not going to go into too much detail here. Still, for completeness sake, I would like to say that our net income was EUR 871 million. This is a very pleasing number also in Q4. Of course, reinsurance contributed EUR 734 million to that, and ERGO contributed EUR 137 million to that. Now, what were the drivers? Of course, a nice combined ratio of 96.4%, so significantly below 100.
Major losses at 13.7%, a little bit above the externally communicated 12% internally, however, for a winter quarter, we are actually not surprised by that. Also the normalized combined ratio was at 95%, meeting exactly our expectation. The COVID damages amounted to EUR 315 million have been booked. We also want to be quite careful, of course. This is, however, including a very prudent IBNR, so it is already prudent. COVID-19 notwithstanding really shows an outstanding profitability this quarter, and of course, it's a one-off effect, but still there is of course a very high operating profitability. ERGO, again, was very good within a really good combined ratio for ERGO Property and Casualty in Germany of 87.6%. That's a number that we haven't seen in many quarters, in many years, actually.
We can really underline a very high and very strong operating performance, very stringent cost management, and also very good growth. ERGO Life and Health in Q4 has been burdened a bit by the fact that we've decided consciously to not realize our capital reserves even if we could have. That is despite the fact that we actually had to deal with losses in certain investment categories. Even though, for example, some stocks have gained, we wanted to start the new year off with these reserves. You can see that in our investment results for the entire year. You can see that too very clearly. We're at 2.8% for the total year, so that's a bit higher even than 2.5% that we expected at the beginning of the year.
You can see that when it comes to the derivatives, we actually see it's -0.3%. Those are hedging losses that we can see, and we could have balanced them more than what we did with the disposal gains of one point three percent. You can also see that the disposal gains were higher in the previous year, but we actually consciously decided to not do that in order to further strengthen our reserves. I would like to point out the regular income of 2.4%, that is 0.1% lower than in 2020, and this is due to the fact that, of course, despite increasing interest rates, the new investment are of course at a lower return than our existing ones.
There's a certain friction here, of course, but let's see how the interest rates develop further. Maybe we'll come into a situation where it stabilizes. We're not there at the moment. This brings me to our annual results, and I'll start with ERGO. This is page 26. ERGO had an excellent annual result, EUR 605 million. This is not only more than the previous year, it also is more than the communicated goals, and it also really achieved the pre-COVID set goals that ERGO set itself on the strategy program one. You might remember that we had a significant earnings improvement in a restructuring phase laid out in that particular strategy program, and the goal was, of course, to end up at larger than 600 for 2021. It is really nice to see that ERGO has actually achieved this.
Our return on equity goes from 8.8% to 10.1%, so up 1.3 percentage points. Yes, all in all, ERGO was really quite excellent in 2021. The drivers in general, Life and Health Germany, EUR 164 million net result. Here we can see once again strong performance in health insurance, but also travel insurance compared to the previous year has improved. Property-Casualty Germany, EUR 234 million earnings contribution. I think the Casualty Germany, like the entire market in Germany, was of course very much burdened by natural catastrophes. We do still remember the Ahrtal images of the floods and that ERGO really managed to still have a combined ratio on the exact same level as the previous year. You can see 92.4% is the exact same number as in the previous year.
ERGO really managed this. It is extraordinary, and it also really shows a great performance, which has allowed them to, well, fully digest these large losses. ERGO International, I'm not going to say too much about that. It's very stable. Positive operating result, EUR 207 million contribution. Combined ratio is exactly in the target range. Now, just one more thing. The EUR 230 million in the previous year were actually increased by a one-off effect, and that is why we can't actually call it an earnings decline either. This brings us to reinsurance on page 27. Our gross earnings actually increased to EUR 41.4 billion compared to EUR 37.3 billion in the previous year. That is actually a record revenue, and also, by the way, we have a group record for this year.
Our net result is EUR 2.33 billion. Despite the high major losses in Nat Cat losses, we are right on the money. We are completely in the target range, and also return on equity jumps from 4.1% to 13.5%, a significant earnings improvement in reinsurance also for our return on equity. Now, one of the drivers, of course, ERGO Property Casualty, but also the operating profitability fully intact with a 95% normalized combined ratio, really nice growth. Also , of course, you can see the rate increases, and of course also for property casualty, you can see a beneficial development. Life and health insurance, you can see EUR 325 million.
This is outstanding because we had such high COVID-19 damages, and if we were to normalize them, we would actually end up at a result which is significantly above the prior year results that we ever had actually. There were quite some positive one-off effects, but even if we adjust for those, it would still be a very, very good year operationally, outside of course of COVID. This brings me to the next page. I would like to say a couple of sentences on the so-called Risk Solutions business. This is a specific insurance business that we operate from the reinsurance side. Here maybe let's start with growth. Very, very positive growth. An actual 18% growth in the gross premiums written.
Organic growth, strong organic growth, just growth despite the fact that we had growth in the individual markets as well. Combined ratio actually went down, so growth while at the same time improving our results is something that we see very rarely. We did it here, and of course, as the improved profitability, I would like to underline this, is something that we achieved despite the fact that we once again had very elevated Nat Cat experiences, hurricanes, tornadoes, storms, and wildfires. Very, very positive. Now, the individual segments of course can be once again seen here on the slide, but I will not all read them out. On page 29, we're talking about the overall reserves. We're of course very solid. I mentioned COVID-19. We also have roughly 60% still outstanding in our reserve positions.
A very important driver here is of course inflation. Joachim Wenning has already spoken about this. This is something that we speak about consistently. An additional strengthening of our reserves is something that we've done not only by taking our best estimate inflation numbers and taking those into account, we actually also increased our prudence, and I think in times of these sorts of fluctuation that's really good. When it comes to U.S. liability, the driver is not even the general price inflation, it's Social Inflation. We can actually see court activity, and this is really a trend that we have been observing for a couple of years.
The COVID trends for this year are of course a little bit different, but due to the fact that we have a better development, we actually have not given this a lot of credibility when we set our reserves. Otherwise, we would have had to dissolve some reserves, or release some reserves. We've actually strengthened them because we believe there will be catch-up effects, and of course, the phenomenon of social inflation is definitely not over yet. Now, on the right-hand side, you can see our result. Due to the fact that we have such prudent reserves, but we've also released reserves, it actually doesn't look that much when it comes to the previous years because now it's only 4%.
Because it we grew so much, the absolute number, which is EUR 1 billion, is still very, very high, and it's higher than in three of the past four years. You can see that we are absolutely in a healthy position with our reserves. Then if we're moving on to major losses, and Joachim Wenning has mentioned it, there's also a change in our forward outlook. From now on, we are assuming 13% of our premiums in major losses. Now, why is this? It's not really surprising, to be fair, because the definition of what is a major loss is that we say everything that breaches the EUR 10 million threshold is a major loss. This definition is something that we haven't really changed since 2006. Since 2006, of course, lots of things have happened.
There was inflation, which was low over many, many years, but it wasn't gone. Of course, we've also grown significantly, so we have a higher market share, and we also have higher shares within our own customers. Damages and claims that are created now, we basically get more on our balance sheet due to that fact. All of this, of course, you can see. On the left-hand side, you can see the growth, you can see inflation, but you can also see the expectation of 12% for major losses, and that was very stable until the last year. I would have actually said that it was astonishingly stable despite the inflation tendencies. Now, in the current update, it is a little bit up, and that is why we actually said that we're going to increase the guidance now to 13%.
This is really just for our external communication. In red, you can see our internal outlier expectations and calculations, so the actual change is probably even smaller than what is communicated here. In the communication, it is simply a switch from 12%-13%. What's important on top of that is that this is not only driven by natural catastrophes, it's also man-made disasters. Maybe because this is always a discussion, I would like to once again emphasize that the insurance of Nat Cat is not just a core business or the core of our business model, it is also and will be a profitable business venture in the long run. This brings me to our German Commercial Code, so basically German GAAP results from 2021.
You can see a result of EUR 4.1 billion, and previous year was EUR 3.2 billion. The improvement is exclusively from the insurance results, and half of this is basically due to an improved operating performance. The other half is due to the fact that we have released reserves amounting to EUR 2 billion, and out of this, roughly EUR 1.6 billion, so three-quarters, are a one-off effect from this release of a voluntary releases in the, from the equalization provision, which we have once again voluntarily released. Now, this increase, of course, also leads to distributable earnings of EUR 7 billion for, on our balance sheet, and this is, of course, excellent for our capital strategy and also a very solid base to finance the share buyback and the increased dividend.
This brings us to page 32 and 33, two CFO topics, which are maybe a bit forward-looking. One of them is, of course, the IFRS 9 and 17 introductions. Those are just around the corner. From next year onwards, we're going to publish our numbers in accordance with IFRS 17, but this means that we already have to provide prior numbers this year, which we're going to have to present to you next year. Now, this is a very, very big project. All companies within the group, of course, have to contribute to this and have to change over their accounting and their accounting systems, so it's also a very huge IT project. Here, we're very well on track, even though, of course, a project of this magnitude is simply quite challenging.
The current preparations are, in fact, us prepping numbers, the actual numbers, according to IFRS 17, and we'll also do all of our publications according to IFRS 17, the ones that we've already done according to IFRS 4, so that we can communicate it properly next year. What are the actual implications? Well, first of all, of course, there's going to be a higher transparency in our financial reporting. It's going to be very market value-oriented. This, however, is going to also lead to an increased volatility, so we have to simply be ready for this.
I think it's going to be interesting to see that the insurance revenue will be recontextualized with this new concept, and especially in the reinsurance business, I think we're going to see a shrinkage of the reportable revenues, and this is simply due to the fact that a part of our commissions, which we put in the revenues, are not going to be put in the revenue numbers according to IFRS 17. We're also going to have further prudent reserves, and there will simply also be another whole host of KPIs that will be affected. This is something that is going to develop over the year, so we'll see, and it's too early to talk about at this moment.
Now, one thing that is very important is that we're not going to actually change our economic steering because of IFRS 17 or how we underwrite our business, neither in primary nor in reinsurance businesses. On the next page, let's talk about the taxonomy. We are, of course, mandated to actually report on the taxonomy of our eligible businesses. Let me just guide you through this. On the insurance side, this is the left side of the business, we can actually see our gross premiums written in non-life, and you can see that about 45% of all of these premiums are eligible. 45% are non-eligible and 55% are taxonomy eligible, but we do have to deduct non-eligible investments like, for example, certain bonds or other investments.
The next step will be that we have taxonomy conform numbers, not taxonomy eligible numbers anymore, and so we do assume that these numbers will be slightly smaller. As you can see, the interpretation of these numbers is not very intuitive, and if you believe that it's possible that on the one hand we actually have 55% and then we have 9%, even though we're actually describing the same business, and it's still our Munich Re core business. If you ask me that, I would actually say that this also surprised me personally. It's simply not very intuitive, and that's why I think we've really had to dig deep into these numbers, also going forward to get a better feeling for this.
What is very important from my perspective is that green investment are supposed to be built up on these numbers, and of course the Taxonomy is a very important factor for these green investments. If you ask me, it is important to have a Taxonomy that is very transparent, that provides lots of information, and which is also consistent across industries, and which also works on a global scale. Because if you look and if you see that we have to deduct non-EU investments for a global player like us, and of course, many of our investments are simply outside of the EU. For a global player like us, this is a bit something to get used to. Our market is global and, funds go from one country to the next and from one industry to the next.
This is simply the fact of the matter. I do think that the EU Taxonomy is a great jump-off point, and also Mr. Wenning spoke about our own ESG ambitions. This is very important, but the EU Taxonomy can only be a jumping-off point here, which has to be developed further, looking at the desired effects, which are, of course, very important, but also looking at possible undesired side effects that we need to avoid. That's it from my side, and I would like to thank you very much for your attention, and back to Andreas.
Thank you, Christoph. We are now starting our Q&A round. We've received some of your questions already, and I would like to ask you, please use the box for your questions. Send the questions to me, to us, and we can answer them. Alexander Hübner, Reuters, first question. Mr. Hübner asks, you said that you want to interrupt share repurchase or buyback in order to finance growth. Now, does this mean that you expect a lot from external growth chances, or rather said goodbye to this? Now, looking at the results from reinsurance, I think nothing changes in 2022. Now, when will you have reached the end of the tether, or have you any other expectations in this respect? Well, thank you very much, Mr. Hübner. Thank you very much for your question.
Well, share buyback, well, we stopped it due to the coronavirus pandemic because we were simply not sure how a coronavirus or the pandemic will develop and the respective burden. I believe that that was a crucial decision. Now, to be fair, we start or restart things again, and it depends on the possible growth chances, using existing capital or return, existing capital. I think that this year gives us a good opportunity to return EUR 1 billion to the market. This does not mean that in addition to organic growth, which of course continues, we also will see or generate external growth. Against this backdrop, I can say that our statements compared to last year haven't changed. External growth, this is what we are going to tackle, if you like.
I don't think there will be a major acquisition in the near future. Nevertheless, we are open to become active in those markets and in those business lines where we are strong already and strengthen our performance there. I believe that this will be possible with the respective capitalization. Now, reinsurance overview, it is true. The insurers have really made a lot of money, and in 2022, well, they are going to make an enormous contribution to this EUR 3.3 billion. An enormous contribution. ERGO, 600, you have to add it to the picture, if you like. This is not sustainable. It is not lasting.
You see, there will be reinsurance markets which are going to soften up, and this means we will reduce capacities respectively, and this also means that earnings will go down in reinsurance. in a less volatile business, like ERGO, Risk Solutions or health, life and health, then things will grow again, and then you will see the shift of the weighting. Let me put it this way. we've got, or maybe accept my statement, we use the less volatile business, and in total, we are or can expect bottom line EUR 2 billion property by 2025, two billion. Now add to that whether this will be a hard market or a soft market, you may say that, a lot of the business will come from property-casualty.
Whether in terms of perspectives, ERGO will end up with EUR 1 billion. Well, I can say I cannot answer this question, actually, because, by 2025, we can give you a statement in 2024 only in this respect. Thank you. This tells us Mr. Frommer's question from the audience. He would like to know, how long will the market stay hard till you increase the cyber insurance premiums by several million EUR? What, what is the amount of the price increase, ERGO? Where does the technical improvement come from if you think of Nat Cat and if this has any effect on the combined ratio? Now, you also said that the entries of NPS, 30 percentage points, legacy, ERGO. But I didn't hear this really. Now, what is the value? What is the NPS value?
Well, I hope we will be able to give you an answer during the conference. If not, then we will send you the answer to this question later. Thank you very much, Mr. Frommer. How long will it stay hard? Th e market, of course. Sure, we don't know. We can say that with the 1/1, with the 1/7 renewals, we can say that we will have renewal dates, heavy on the major losses. Therefore, we will see a similar development of the markets. Maybe this becomes even more apparent because the very, say, heavy capacities are in short supply in the marketplace, whereas the smaller and medium-sized capacities are less in short supply. If you look at 2023, then we say, gazing at the crystal ball, of course, we are not carrying it around.
If you look at the strong 2014 and then the 2001 and the strong 2017, if things go down early that year, then I must say, we cannot predict or anticipate things here. Nevertheless, I've got this little tiny hope that in 2023, we are going to have a relatively positive market environment for Munich Re. You mentioned the cyber premiums or entry prices. You see, half of these premiums is due, or the increase is due to increase in premium rates. Technical improvement at ERGO, this is due to cost discipline. I think I should call it cost management because ERGO is really excellent in this, in this respect.
Surely, cost degression due to growth and then of course, there's a plethora of portfolio or other growth aspects which, can be seen over a year. A question from several journalists. Exposure in Russia and Ukraine. What about it? Please give us some facts and figures. Jörg-Philipp Lacroix from AP. The pandemic, opened our eyes to see the respective cyber risks. Have complaints increased? How many complaints? And do you see an upward trend over the next few years? Another question from Mr. Lacroix. Costs of Nat Cat, is it increasingly difficult to forecast them? And this of course also makes it difficult to forecast any results. Why don't you specify corridor in your targets like competitors are doing? Thank you very much. Exposure against the backdrop of Russia and Ukraine.
Please bear with me. I do not want to politicize. This is what many others are doing in all different channels. I really cannot make a contribution in this respect. We hope very much so that talks, even they are, say, conflict talks, so to speak, we hope that there will be a peaceful solution which will reduce any human sufferings on both sides, which will prevent these sufferings or at least, reduces it down to a very, very, very low level. In Ukraine, we have some insurance risks, but our business, our operations are there are negligible. This relates to Russia as well. Directly affected, not a big issue for us, you may say. Indirectly affected, well, this is then through the secondary, through the capital market.
You know, there's always some unrest in the capital markets, but this is within limits. Of course, this affects all industries, including us, of course. Now, if the situation escalates quite unexpectedly, this will affect the capital market, and the respective uncertainties in the capital market would also affect us. You ask about complaints in the context of the pandemic, I admit. Well, we haven't received so many complaints directly, to be honest. I do not want to hide the fact that, of course, any difficult, say, discussions or quarrels which were discussed in the press, whether something is covered or not, well, we've seen these, of course. Well, from our perspective, I can say that we haven't seen any increases in complaints. We cannot confirm any increase. Then an analogy with cyber. I don't see this.
You asked about the predictability of combined ratios, when looking at Nat Cat claims. I should say that this is very difficult. we've got probability values. We always take them into account, and we do not know in which year which losses or rather claims will, say, happen, will emerge. Therefore, the real combined ratios are always fluctuating around the real, say, costs or losses, that is. It is our experience, which is a very good one, that we can keep everything within certain limits, unless extreme natural disasters or catastrophes happen, maybe every, I don't know, five years, like in 2017, Harvey, Maria. The losses in Japan, they happened in 2011, I believe. Katrina, Rita, Wilma in 2005, if I remember correctly.
This means that the real result is far below the expectations which you communicated, but also far below a bandwidth which you could, say, announce. For this reason, we believe that a bandwidth or a corridor, as you call it, doesn't help us. We just give this one target value. Thank you very much. The next question is Gabriel Wirth, Bayerischer Rundfunk, Bavarian broadcasting station. Why is the capital result has gone down so much, and what do you expect from the newest developments, and when will these new developments or results be visible, perceivable? Mr. Wirth. Thank you for your question. The capital investment result, indeed, it's lower compared to the previous year. I confirm this. There are two reasons. One, we reinvest at lower interest rates so that the capital earnings are going down slightly 0.1% per year.
In addition, there's a second effect, and the second effect was mentioned in my presentation briefly. This is the management strategy. You see, our capital investment is also characterized by how many reserves are then taken into account, i.e., bring them into the result. We were very conservative this year. We thought we'd look at the balance sheet. We want to be prepared for any volatile times, and therefore, we have to make certain provisions and reserves. This also meant that we've taken this conscious decision to keep the investment result lower compared to the previous year. Could we have done it differently? Well, yes, definitely, but we didn't see the necessity to do so. Next question is Christian Schnell from Handelsblatt. Reinsurance, life and health. profit expectations have been reduced considerably down to EUR 500 to EUR 400.
Sorry, from EUR 400 to EUR 200. what about the decision when it comes to the succession of the member of the Board of Management, you mentioned, Doris Höpke? Well, it will be communicated when it can be communicated, just to give a simple answer. The result, the outlook which we always give refers to the technical result. Now, technical result, you were slightly above the EUR 200, but not as evidently as the net figure which you mentioned. this one was above EUR 300. Mr. Schnell, you are right. The guidance which we gave in November, we've exceeded it. Indeed, Q4 for the life reinsurance was a very good quarter.
The result was so good that we were not able to, say, digest higher COVID claims, but the positive performance, also was a positive surprise for us. On balance, EUR 200, slightly above EUR 200, but, we had surprises in both directions, and we are really happy that we landed where we landed. Tobias Daniel from inFranken.de. What about the claims, or could you give us figures for the claims due to the flood in Germany mid-2021, and what about the burdens, in relation or in the context of COVID? Claims flood the last year, we quantified it, mid-sized triple-digit million amount. That quantification, well, we look at reinsurance in this respect in the first place because ERGO doesn't play a role here. You say three-digit million amount.
Now, this affects reinsurance and ERGO. I think it should be a sign that this is considerable for ERGO. I do not really want to give you a specific figure because it will be a three-digit figure, and this applies to ERGO as well. Stephen Carroll from Bloomberg, can you confirm that Munich Re is not involved in Nord Stream 2? Sorry, the microphone is off. S orry, says Mr. Wenning, "Sorry, I didn't switch on the mic." Now your question. Sorry for giving this late answer. We can confirm that the contractual relationships between our subsidiary, that is Munich Re Syndicate and that the respective policy has been canceled or rescinded, but the customer doesn't recognize this, doesn't accept this.
I cannot give you an up-to-date answer, so we have to wait for the respective cancellation date. Well, we've got an internal guidance in this respect that all participations which we have in the context of Nord Stream 2 have been looked at and have been researched, and that there might be some other business in this respect. Let me remind you, if you've got any questions, please, write them into the box and we are trying to answer it. Last question, Inke Kappeler from ERGO News. ERGO says that certain portfolio aspects can be used through ERGO. Are you using it and to what extent do you use this? Well, except ERGO, nobody's using this. the project rates IBM at ERGO.
Here we can say that we really wanted to shift or migrate the legacy portfolio to the new system completely. This, I think, might give you an idea that half a billion of contract worth has been migrated already. Let me sum it up like this. the largest things, these are the largest challenges which we face. Everything now will, slip through very smoothly, and it is my, say, feeling that it will take another two years until we've reached the respective point, and then we're going to start the acquisition. Thank you very much. There aren't any more questions. I would like to thank you for attending this conference, your interest in our company, the good questions, the good discussions which we have. I wish you a sunny day today and, stay healthy. That's very important. Goodbye. Thank you.