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Munich Re quarterly profit falls as major losses increase

Germany’s Munich Re reported lower third-quarter net profit in detailed results published on November 12. Major losses increased sharply and the investment result weakened, although nine-month net profit rose. The reinsurer retained the annual profit target raised in October, with natural catastrophe losses accounting for most of the quarter’s large-loss expenses.

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In a sunlit white finance office in Munich, two reinsurance analysts stand beside a stone ledge with folders and water glasses, reviewing Munich Re's lower third-quarter profit results.

Quarterly net profit declines

German reinsurer Munich Re, which takes on risks from insurance companies, published detailed quarterly results on November 12.[1], [2]

Third-quarter net profit fell to 1,742 million euros compared with a year earlier. Insurance revenue increased from 14,575 million euros to 16,626 million euros, while the operating result declined from 3,036 million euros to 2,472 million euros. Nine-month net profit nevertheless rose from 5,176 million euros to 5,667 million euros.[1]

Major losses rise but remain below expectations

Quarterly major losses increased from 118 million euros to 646 million euros, after risk transfers to other reinsurers and before tax. Natural disasters accounted for 514 million euros and man-made losses for 132 million euros. The major-loss burden was 14.9 percent of relevant net insurance revenue, below the company’s expected 18 percent. Property and casualty reinsurance net profit declined from 1,187 million euros to 938 million euros.[1]

Investment result weakens as life and health profit rises

The investment result fell from 2,385 million euros to 1,859 million euros, mainly reflecting less favourable changes in investment fair values. Regular investment income increased to 2,314 million euros. Life and health reinsurance net profit rose from 286 million euros to 340 million euros. The primary insurance business ERGO contributed 263 million euros, down from 304 million euros. Munich Re retained the previously raised annual net profit target of 6.6 billion euros.[1]

References

  1. News sourceMunich ReMunich Re third-quarter net profit falls to 1.74 billion euros↩1↩2↩3↩4
  2. News sourceonvistaMunich Re quarterly profit declines↩
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