Munich Re warns on 2022 profit target amid challenges

Munich Re has revealed it is now “significantly more challenging” for it to meet its 2022 profit target in the context of recent cat losses and hits to its investment portfolio.

The reinsurer has said in Q3 2022, it registered higher-than-average major-loss expenditure in property-casualty reinsurance. It expects that Hurricane Ian will cause roughly €1.6bn in losses after retrocession for Munich Re but also stressed the estimate remains subject to substantial uncertainty.

It added that, depending on the outcome of the ongoing quarterly closing – and on account of sustained encouraging operating performance in all lines of business and a positive one-off effect at ERGO Life and Health Germany – it anticipates a quarterly profit of about €0.5 billion, which is some €167 million shy of the consensus of estimates of 15 financial analysts.

It added, however, that it still anticipates a profit of about €3.3 billion for 2022. “However, it has become significantly more challenging to meet the 2022 profit target – which is subject to the realisation of currently anticipated positive one-off effects, particularly regarding investments,” the reinsurer said.

“In addition, the forecast is still based on major losses during Q4 being in line with expectations.”

Munich Re will provide finalised Q3 results on 8 November, as scheduled.

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