Munich Re posts 'satisfactory' quarterly result despite high COVID-19 losses

Global reinsurer Munich Re has posted a "satisfactory" net result of approximately €600 million in the second quarter of 2020, despite registering COVID-19-related losses of €700 million in its reinsurance operations.

The reinsurer stated that the large majority of these losses is attributable to cover for major events, with a lower impact in life and health business as well as other lines of property-casualty insurance, including business interruption.

In the first quarter, the reinsurer reported COVID-19-related losses totalling nearly €800 million, particularly in event cancellation insurance, leading to a 65 percent decline in the profit year-on-year. Overall, Munich Re has now reported €1.5 billion COVID-19 hit in the first half of 2020.

Excluding COVID-19, Munich Re reported lower-than-average major losses and good performance at ERGO in the second quarter.

The firm noted that it sees "considerable ongoing uncertainty" with respect to the macroeconomic development and the financial impact of COVID-19, and does not expect that uncertainty to subside between now and early 2021.

In addition, Munich Re has "identified truly favourable conditions for growing its reinsurance business and therefore the active use of its capital."

Munich Re revealed that it has decided to "definitely not implement its discontinued 2020/2021 share buy-back programme". The company will decide early next year as to a potential, new share buy-back programme for the time between the AGM 2021 and the AGM 2022.