Munich Re 2020 profit plunges 55% as pandemic takes toll By Reuters

© Reuters. The logo of reinsurance company Munich Re Group is seen next to the entrance of their headquarters in Munich

FRANKFURT (Reuters) – German reinsurance group Munich Re expects net profit to bounce back this year after 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.

Pandemic-related claims alone amounted to more than 3.4 billion euros.

(Graphic: Profit plunge: 2020 marked the most major losses since 2011, https://graphics.reuters.com/MUNICHRE-RESULTS/gjnpwzklrvw/chart.png)

“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.

Munich Re’s results, while weaker in the aftermath of the virus, contrast favourably with those of competitor Swiss Re (OTC:), which posted a full-year loss of $878 million, its first loss since the financial crisis in 2008.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.