Munich Re reveals huge potential Olympics loss from Covid-19
The potential for Covid-19 to disrupt the Tokyo Olympic games was a key issue discussed during Munich Re’s balance sheet update on Friday 28 February.
Torsten Jeworrek, member of the board of management and CEO of reinsurance at Munich Re, revealed that the company has exposure to the Tokyo Olympic games that is in the region of a three figure sum in millions of Euros. He added that there may also be a penetration gap in terms of smaller events in the Asian region.
In the life and health sector, Christoph Jurecka, member of the board of management of Munich Re, claimed a pandemic with fatalities in the hundreds of thousands could cause losses of between €1.4-€1.5 billion ($1.64 billion) in life insurance, though the likelihood of Covid-19 causing this many fatalities is low.
“We do not expect a global recession but stock markets are falling and a drop in stock prices would affect us,” said Jureka.
Cyber insurance is a key growth area for the reinsurer, according to Jeworrek, and the company announced gross written premiums of $604 million on its cyber portfolio in 2019.
According to Jeworrek, the company’s risk exposure in relation to cyber is not always clear and they are now looking to build up external expertise. Although the issue of silent cyber is something the company is addressing.
Jeworrek added that despite Munich Re having 100 staff currently sharpening the firm’s cyber risk models, they would also like to use knowledge from hackers to upskill the company’s tech department.
Finally, Munich Re outlined its 2019 sustainability achievements in which it invested €1.6 billion in renewable energy. Looking ahead, the reinsurer has joined the UN convened net zero asset alliance and aims to have a climate-neutral investment portfolio by 2050.
Munich Re are now looking to expand into the Chinese and Indian life sector while at the same time it has withdrawn from some policies in the United States where it does not feel rates have moved sufficiently and prices failed to reach its expectations.
