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Munich Re posts quarterly underwriting loss

Munich Re’s property & casualty (P&C) reinsurance unit posted an underwriting loss in the third quarter as losses related to COVID-19 hit €800 million ($1.3 billion) and seasonal natural catastrophes struck.

P&C reinsurance recorded a loss of €23 million (37.44 million), compared with a profit of €464 million ($755.38 million) a year earlier, on a combined ratio of 112.2%, versus 103.9% a year ago.

The reinsurer’s overall profit dropped 77% to €199 million ($323.9 million) in the three months to the end of September, for a January-September profit of €999 million ($1.63 billion) – less than half the total of a year ago.

“In reinsurance the third quarter is often characterised by above-average losses – and that was again the case this year,” CFO Christoph Jurecka said. “On top of man-made major losses and natural catastrophes in the US, ongoing high COVID-19 claims affected the result.”

Gross written premium rose 3% in the third quarter to €14.15 billion ($23.12 billion) and by 6% for the first nine months of 2020.

In life and health reinsurance, losses arising from COVID-19-related deaths totalled around €100 million.

Munich Re also sustained non-COVID-19-related man-made losses – for example the Beirut port blast on August 4 – while claims from natural catastrophes amounted to €474 million ($771.78 million) on windstorm and wildfire losses in the US.

“The third quarter again saw losses incurred in connection with the cancellation or postponement of major events, as well as losses in other lines of property-casualty reinsurance, such as business interruption,” Munich Re said.

“The environment remains extremely challenging and uncertain in view of the volatile capital markets and unclear impact of a prospective second wave of COVID-19.”