The world’s largest reinsurer has presented good figures.
(Photo: dpa)
Munich The world’s largest reinsurers have shown themselves to be crisis-resistant this year despite the high burdens from natural disasters, cyber attacks and the pandemic. As the last of the three big providers, Munich Re confirmed on Tuesday morning with its final figures for the third quarter the trend that had already been shown in the previous days in the results of the competitors Swiss Re and Hannover Re.
The net result of the Munich company of 366 million euros in the period from July to September was mainly influenced by the high losses from Storm Low Bernd in Europe and Hurricane Ida in the USA, but despite the slump in the third quarter, the world’s largest reinsurer is in the first nine months a net profit of 2.061 billion euros on the books.
The targeted annual result of 2.8 billion euros should continue to be achieved. Analysts currently reckon with around 2.7 billion euros.
Storm Bernd in particular had a negative impact on Munich Re’s balance sheet in the summer. The world’s largest reinsurer is assuming payments of around 600 million euros, which relate to the property and casualty area of reinsurance as well as the primary insurance business of the subsidiary Ergo. In addition, there are payments from Hurricane Ida in the USA amounting to 1.2 billion euros.
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The fact that, despite the high burdens, a result of 366 million euros was achieved in the months from July to September is mainly due to the positive development of other business areas, a strong investment result and currency gains. In the third quarter, the primary insurance subsidiary Ergo was able to keep its profit almost at the previous year’s level despite high burdens. With the profits from the first half of the year, there are now 467 million euros to book after nine months, compared to 381 million euros in the same period of the previous year.
Success in investing
Nicholas Gartside was also convincing once again. The Briton came to Munich Re two years ago to realign the investment portfolio of currently 236 billion euros. With success: The return on equity rose in the difficult third quarter to 6.3 percent after 3.6 percent in the same period of the previous year. For the first nine months it is now 12.1 percent after 5.9 percent a year earlier. Shifts in the portfolio and currency gains, especially in the US dollar and in the emerging markets, were the reason.
In addition to the high storm damage, the corona pandemic also had an impact on Munich Re’s balance sheet in the third quarter. In the life / health reinsurance segment, the targeted underwriting result of EUR 400 million will not be achieved. The new target is 200 million euros.
CFO Christoph Jurecka had already indicated possible burdens when presenting the figures for the second quarter in August. Above all, the high number of corona deaths in the USA, India and South Africa is decisive. For the year as a whole, Munich Re is now expecting Covid 19 damage of 800 million euros, compared to 700 million euros previously.
Great demand for insurance coverage
Competitors Swiss Re and Hannover Re also recorded high claims payments in the first nine months. The burdens from Storm Depression Bernd and Hurricane Ida cost the largest competitor Swiss Re a total of two billion euros. Nevertheless, the Swiss made a profit in the property and casualty business and in the industrial business.
However, the life and health insurance business slipped into the red. In particular, the high number of corona deaths in the USA led to payments of 1.2 billion dollars. Overall, however, after nine months there was a surprisingly high surplus of 1.26 billion dollars, a year ago there was a loss of 691 million dollars at this point.
The situation is similarly good at Hannover Re, number three among the world’s largest reinsurers. In the period from July to September he had earned 185 million euros, a good 30 percent less than in the same period of the previous year, but the targeted surplus of 1.15 to 1.25 billion euros for the year as a whole should still be achieved.
The world’s largest reinsurers are already confident about the coming year. Hannover Re is then aiming for a record profit of 1.4 to 1.5 billion euros. Rising premiums for the protection of reinsurers have already led to a noticeable rise in premium income in recent months. At Munich Re, they rose by 8.3 percent to a new record level of EUR 44.67 billion in the first three quarters. This trend is expected to continue in 2022.
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