Property-casualty premiums rise sharply at Munich Re
Munich Re confirmed it was on track to beat its previous 2019 profit target, and said property-casualty reinsurance had been a strong performer in the third quarter with a sharp rise in premiums.
Property-casualty reinsurance contributed €464 million to the consolidated result in the third quarter, compared with €151 million in the same period a year earlier. Premium volume rose to €6.6 billion from €5.8 billion. The combined ratio was 104.7 percent, up from 100.7 percent of net earned premium due to high major losses. The figure for the first nine months was 97 percent, down from 97.3 percent, keeping the company well on track to meet its target of 98 percent for the full year.
Reinsurance as a whole contributed €746 million to the consolidated result in the third quarter. Gross premiums written increased by 11.9 percent to €9.6 billion.
Munich Re as a whole generated a profit of €865 million in the third quarter, up from 483 million. Gross premiums written increased by 7.4 percent to €13.7 billion.
Munich Re said that, given its positive performance through the first nine months, it expects to post an annual profit exceeding €2.5 billion in 2019, based on premium volume of more than €49 billion. In the reinsurance field of business, Munich Re now expects to earn a profit of more than €2.1 billion and premium income of more than €31 billion.
Chief financial officer Christoph Jurecka said: “We are very pleased to have achieved extremely good results for two quarters in a row now, despite costly hurricanes and typhoons. We now expect to surpass our initial profit and revenue targets overall for 2019.”
Large natural catastrophes cost a total of €577 million in the quarter, up from €505 million. Munich Re estimated Hurricane Dorian would cost about €360 million and Typhoon Faxai some €380 million. It said typhoon Hagibis is expected to prove even more costly; its losses will be reported in the fourth quarter.
In recent years, both Munich Re and Swiss Re have occupied the top slot for the world’s biggest reinsurer by premiums written, according to AM Best. There is usually only a slight difference between them. Munich Re is currently in second place. Hannover Re is some way behind, in third place.
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