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Catastrophes hit Munich Re profits

Catastrophes hit Munich Re profits | Insurance Business

Catastrophes hit Munich Re profits
Global industry giant Munich Re reported lower profits for the second quarter as costs related to disaster payouts increased.
The major reinsurer posted net profit of €974 million in the three months to the end of June, down from €1.07 billion in the same period last year.
Gross premiums written decreased from €12.4 million to €11.9 million in the second quarter, the company said.
Munich Re also reported a decline in operating profit from €1.82 billion to €1.46 billion.
Natural catastrophe losses in the second quarter amounted to €335 million while man-made major losses reached €207 million.
Munich Re said it is expecting net expenditure of around €400 million from the extensive wildfires in Alberta, Canada last May. Losses incurred from the series of earthquakes in Kyushu, Japan in April also resulted in €85 million in expenditure.
Apart from disaster payout costs, €400 million in expenses related to the restructuring of Munich Re’s Ergo insurance division also affected the company’s second-quarter profits.
Despite the profit decline, Munich Re is still on track to reach its annual target of €2.3 billion, according to CEO Nikolaus von Bomhard, who described the latest financial results as “above average.”
“And that was despite higher natural catastrophe expenditure in the second quarter – arising from wildfires in Canada and earthquakes in Japan – after many quarters without major losses,” he said.
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