The impact of the coronavirus on the insurance industry keeps on coming. The latest victim has been Munich Re, which withdrew its profit guidance for the year as a result of significant insurance claims triggered by the cancellation of large events. Governments across the globe have been banning these public gatherings in the fight to slow the spread of COVID-19.
The reinsurer stated that claims within its property and casualty reinsurance segment have caused it to anticipate profits in the low three-digit-million euro range for the first three months of 2020, according to reports from Reuters. By comparison, Munich Re posted Q1 profits of €633 million last year.
The reinsurer’s annual guidance will suffer as a result of this outbreak, and a share buyback program planned for 2020/2021 will be discontinued until further notice, said the company.
“Munich Re will not attain its profit guidance of €2.8 billion ($3.08 billion) for 2020 as a whole,” the reinsurer said in a recent statement.
Nonetheless, even taking into account the effects of capital market and loss developments, Munich Re’s solvency ratio remains solid, sitting within the communicated optimal range of 175% to 220% of the requirement.