Cat-heavy Q3 pushes Munich Re into red
A catastrophic third quarter featuring hurricanes Harvey, Irma and Maria has led to Munich Re reporting a €1.43 billion ($2.16 billion) loss, down from a €685 million ($1.03 billion) profit in the corresponding three months last year.
The German reinsurer now assumes it will generate only a small profit for the full year, if it performs in line with fourth-quarter expectations.
Harvey, Irma and Maria caused natural catastrophe losses totalling €2.7 billion ($4.09 billion).
Munich Re estimates the three storms will cause market-wide insurance losses of about $US100 billion ($131 billion), although claims settlement will continue for many months.
Third-quarter gross written premium was €12.27 billion ($18.6 billion), down from €12.34 billion ($18.7 billion).
The investment result was €1.58 billion ($2.39 billion), down from €1.61 billion ($2.44 billion).
In property and casualty reinsurance, Munich Re forecasts a combined operating ratio of 112% for the full year. The combined operating ratio for the Ergo International unit is expected to improve one percentage point to 97%.
CFO Jorg Schneider says catastrophes substantially affected the group’s result.
“Despite business being otherwise good, this means we can only post a small profit [this year],” he said.
“But our capitalisation is strong, and we are able to take full advantage of opportunities arising from the likely market recovery.
“We expect prices to rise again in the forthcoming negotiations – particularly in the markets that have been hardest hit by recent natural catastrophes.”