Munich Re expects to hit 2021 profit goal despite high loss burden in Q3

Germany-based global reinsurer  Munich Re has revealed that it expects to report a profit of around €400 million in the third quarter of 2021, despite facing heavy losses from natural catastrophes during this period. Its annual profit target of €2.8 billion also remains unchanged.

Munich Re said its Q3 result was burdened by high losses from European flooding and Hurricane Ida.

The company estimates that windstorm Bernd, which led to flooding and flash floods in Germany and neighbouring countries, will cost roughly €600 million in the segments property/casualty reinsurance and ERGO Property/casualty Germany. While in the US, Ida caused losses totalling roughly €1.2 billion in property/casualty reinsurance.

The reinsurer maintains “continued positive performance” in all segments and a high investment result – also due in part to large gains on disposals, as well as a high currency translation result.

Overall, Munich Re achieved a preliminary result of around €400 million in Q3.

The company has thus attained a result of roughly €2.1 billion for the first nine months. For the full year 2021, Munich Re anticipates that it will still meet its overall profit target of €2.8 billion.

This forecast takes into account higher COVID-19-related losses for life and health reinsurance than expected at the time the Q2 results were announced. At that time, Munich Re reported that it will not reach its technical result target of €400 million for this year. In property/casualty reinsurance, there were no noteworthy COVID-19 losses in Q3, it noted.

Munich Re will announce its final Q3 result on November 9.

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