Munich Re has reaffirmed its 2025 profit target of €6 billion (US$6.3 billion) despite anticipated losses from the ongoing California wildfires.
The company’s chief executive, Joachim Wenning (pictured above), announced the forecast even as the wildfires near Los Angeles are expected to result in significant payouts.
The reinsurer provides insurance coverage to major insurers, including several large US firms. The California wildfires are projected to generate insured losses for the industry of between €20 billion and €30 billion, although the exact impact on Munich Re remains uncertain.
Thomas Blunck, a member of the company’s executive board overseeing reinsurance, said that the losses would be manageable within the company’s provisions for natural catastrophes.
“But it will certainly remain well below the provision we always have for natural catastrophes,” Blunck said in a report from DPA. “So it’s not throwing us off course at all.”
Munich Re recorded a record-breaking year in 2024, exceeding its target of €5 billion in net profits, Wenning noted, though he did not disclose specific figures. The projected €6 billion net profit for 2025 represents a more than 20% increase over last year’s goal.
The global insurance industry has so far weathered broader economic challenges, with natural disasters in the US continuing to play a critical role in determining reinsurers’ performance. North America remains the most loss-prone region for natural catastrophes, including hurricanes, tornadoes, storms, and wildfires, leading to higher insured losses than in other parts of the world.
Munich Re’s ability to meet its profit targets depends heavily on managing risks from such events, particularly in the US, where the scale and frequency of natural catastrophes continue to drive reinsurance market dynamics.
A report from Munich Re showed that 2024 has proven to be one of the most devastating years for natural disasters.
Analysis shows that total losses reached US$320 billion worldwide, marking it as the fifth costliest year since 1980. Insurance companies bore US$140 billion of these losses, making it the third most expensive year for the insurance industry.
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