Munich Re profit is $1.29b, beat expectations

FRANKFURT: The reinsurer Munich Re said on Tuesday that it posted a preliminary net profit in the second quarter of around 1.1 billion euros ($1.29 billion), better than analyst expectations.

The company said that it was “well on track” to meet its annual profit target of 2.8 billion euros.

German reinsurance group Munich Re expects net profit to bounce back in 2021 ater more than halving in 2020 as the coronavirus crisis helped drive claims to a near-decade high.

Major losses in 2020 for the virus and natural catastrophes totalled 4.689 billion euros ($5.71 billion), the highest level since 2011, when the firm had to make payouts for a tsunami in Japan, major earthquakes in New Zealand and the explosion of the Deepwater Horizon oil rig.

“In spite of the tremendous challenges posed by COVID-19, Munich Re closed out 2020 with a clear profit,” Chief Executive Joachim Wenning said.

Net profit of 1.211 billion euros compares with 2.707 billion euros a year earlier, and is slightly below a consensus forecast of 1.261 billion euros.

Munich Re said it expects profit to rebound to 2.8 billion euros in 2021.

The insurance industry has faced large claims from the pandemic, such as those for cancelled events and postponed events including the Olympics, as well as losses from hurricanes and wildfires in the United States.

The virus uncertainty prompted the company to refrain from providing a full-year profit target and it will no longer insure against events cancelled due to pandemics.