Munich Re profit drops 5 percent on natural catastrophes
By Mark E. Ruquet, www.PropertyCasualty360.com
March 10, 2011 Munich Re said its 2010 net income dropped 5 percent as it took a hit from natural catastrophe losses that were higher than average. The Munich, Germany-based insurance company reported profit of €2.4 billion (U.S. $3.4 billion at the current exchange rate), a drop of €134 million ($185) on the year. Gross premiums written increased 10 percent, or €4 billion ($6 billion), to €45.5 ($63 billion) for the year. The results were helped by a close to 10 percent increase in its investment results, rising €759 million ($1.05 billion) to €8.6 billion ($11.9 billion). “It was not an easy year given the high burdens from major losses, but we were nevertheless able to bring it to a successful close,” said Nikolaus von Bomhard, chairman of the board. “With a profit of €2.43 billion, we even slightly surpassed the target we had set ourselves.” Munich Re’s reinsurance segment reported a drop in profit of close to 19 percent, or €477 million ($660 million), to €2.1 billion ($2.9 billion). Gross premium written rose 8 percent, or €1.8 billion ($2.5 billion), to €24 billion ($33 billion). The combined ratio rose 5.2 points to 100.5. … The company said it estimates claims from the earthquake in New Zealand; floods in Brisbane, Australia; and Cyclone Yasi that hit that region will total around $1.5 billion. The New Zealand earthquake alone will account for $1 billion, the company said. Claims losses from the floods and cyclone will amount to around $485 million. Discussing the rise in the combined ratio for its property and casualty insurance segment, Munich Re said market problems in Turkey, Poland and South Korea “along with natural hazard events such as the long, harsh winter and flood losses were responsible” for the increase. The overall figure for the year contains 11 percentage points for natural catastrophe, which the company called “a major loss burden” citing that the number is well above the average of 6.5 percent. The company noted that its largest 2010 loss event was the earthquake in Chile coming in at close to $1 billion after retrocession and before tax. …
Munich Re Profit Drops 5% On Natural Catastrophes
By Oliver Suess
23 March 2011 Munich Re, the world’s largest reinsurer, fell as much as 3.1 percent in Frankfurt trading after scrapping its 2011 profit target on claims from the quake and tsunami in Japan. The shares dropped 1.2 percent to 108.70 euros at 5:05 p.m. They have declined 6.6 percent since March 10, the day before the record earthquake and tsunami hit Japan. Claims from Japan will reach about 1.5 billion euros ($2.1 billion), bringing losses from major natural catastrophes in the first quarter to more than 2.5 billion euros, “far exceeding the volume to be expected for this period,” the reinsurer said in a statement yesterday. “That means the profit target for 2011 of around 2.4 billion euros is no longer achievable.” Munich Re, which expects the highest claims among Europe’s biggest reinsurers, on March 10 reiterated the full-year profit goal after disasters including the earthquake in New Zealand and Cyclone Yasi in Australia cost it about A$1.5 billion ($1.5 billion) in the first two months of the year. It said at the time that the target could only be reached, “if random losses in the further course of the year remain below expectations.” The next day the 9.0-magnitude earthquake hit Japan, triggering a tsunami and leaving more than 9,000 people confirmed dead. The Japanese government today estimated the damage at as much as 25 trillion yen ($309 billion), or almost four times the impact of Hurricane Katrina on the U.S. in 2005. … Catastrophe modeling firm Eqecat said on March 16 that insurers and reinsurers will probably have losses of $12 billion to $25 billion from the Japan earthquake and tsunami. Modeler AIR Worldwide had estimated insured losses of as much as 2.8 trillion yen ($35 billion) from the quake alone. …
