Munich Re to post €1.4bn loss in Q3, reveals nat cat hit
Munich Re is expecting a third-quarter loss of €1.4 billion owing to exceptional major-loss expenditure while projecting a small profit for the full year 2017.
Munich Re is anticipating losses of €2.7 billion from Hurricanes Harvey, Irma and Maria after retrocession. Including the expenditure for other natural catastrophes – in particular the earthquakes in Mexico – and man-made losses, overall major-loss expenditure will amount to €3.2 billion in the third quarter.
Jörg Schneider, chief financial officer of Munich Re: “High losses from severe natural catastrophes are part and parcel of our business; that is why we are here. Our capital base remains very strong. We will continue to offer our clients full reinsurance capacity. Moreover, Munich Re has enough capital to take advantage of the opportunities this exceptional situation provides in terms of profitable growth.”
Munich Re will post a loss of €1.4 billion for the period from July to September 2017. In addition to the aforementioned major losses, the quarterly result will also be impacted by adverse IFRS effects from the recapture of a life reinsurance treaty and – as expected – a low positive contribution to the quarterly result from ERGO. Munich Re will publish more detailed quarterly figures on Nov. 9.
Munich Re is now proceeding on the assumption of generating a small profit for the year.
In March, Munich Re had announced that its profit guidance for 2017 would be in the range of €2.0–2.4 billion. In September, Munich Re had warned that the severe losses to be expected from Hurricanes Harvey and Irma were likely to result in a loss for the third quarter, and might jeopardise its profit target for 2017. Since then, Hurricane Maria has also caused significant damage in the Caribbean.
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