Munich Re profits fall 77% on €800m COVID-19 hit in third quarter

Global reinsurer Munich Re has booked COVID-19-related losses totalling about €800 million in its reinsurance unit, resulting in a sharp drop in its profits for the third quarter of 2020.

The company is now expecting a quarterly profit of about €200 million, attributed to "good performance once again at ERGO". This compares to €865 million profit it generated in Q3 2019, and reflects a 77 percent decline on the prior year quarter.

The COVID-19-related losses are attributable to various business lines, such as insurance for major events and other property-casualty lines, and the life and health business.

The reinsurer said that it also registered what was an "above-average claims burden" from non-COVID-19 major losses for a single quarter. These include natural disasters, particularly several severe hurricanes and wildfires in the US, and man-made losses, the largest of which was the explosion in Beirut's port.

In the second quarter of 2020, Munich Re posted €700 million COVID-19-related losses stemming from business interruptions and event cancellations, leading to a 41.7 percent decline in its profits which came at €579 million, compared to €993 million in Q2 2019.

Munich Re will publish detailed information on its quarterly figures on November 5 2020.