Natural and investment catastrophes hit Munich Re
No 1 global reinsurer Munich Re has cut profit targets for the second time in four months as it reported disappointing third-quarter results on Friday.
Like most insurers, the German company is suffering from plummeting investment income and unexpectedly high catastrophe losses, which brought third-quarter net profits down to €12 million ($22.4 million) – 99% less than the corresponding period last year.
And full-year profit, which was formerly predicted to be €3-4 billion ($5.6-7.4 billion) is now unlikely to reach €2 billion ($3.7 billion).
Investment income fell by 66% in the third quarter. European commentators say
Munich Re has been increasing its exposure to asset-backed and mortgage-backed securities – the asset classes that helped to trigger the global financial crisis – in a bid to generate more income.
Hurricanes Gustav and Ike led the quarter’s unexpectedly high catastrophe payout list, which amounted to €1.2 billion ($2.2 billion) in the first nine months, compared to €800 million ($1.4 billion) in the corresponding period last year.
Like most insurers, the German company is suffering from plummeting investment income and unexpectedly high catastrophe losses, which brought third-quarter net profits down to €12 million ($22.4 million) – 99% less than the corresponding period last year.
And full-year profit, which was formerly predicted to be €3-4 billion ($5.6-7.4 billion) is now unlikely to reach €2 billion ($3.7 billion).
Investment income fell by 66% in the third quarter. European commentators say
Munich Re has been increasing its exposure to asset-backed and mortgage-backed securities – the asset classes that helped to trigger the global financial crisis – in a bid to generate more income.
Hurricanes Gustav and Ike led the quarter’s unexpectedly high catastrophe payout list, which amounted to €1.2 billion ($2.2 billion) in the first nine months, compared to €800 million ($1.4 billion) in the corresponding period last year.