Munich Re Profits Hit 1.1 Billion Euros Despite Covid-19

German reinsurance giant Munich Re reported a preliminary second-quarter net profit of 1.1 billion euros ($1.3 billion) on Tuesday, up from 580 million last year despite payouts linked to Covid-19.

Source: AFP | Published on July 21, 2021

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From April to June, losses in the company's life and health insurance business "clearly exceeded the expectation mainly due to the high mortality rate in India and South Africa" from Covid-19, it said in a statement.

But the Munich-based group, whose main business is cushioning other insurers against risk, also recorded lower-than-average expenses in its property-casualty business, "mainly as a result of comparatively low losses from natural catastrophes", it said.

Losses in the field of property-casualty reinsurance were "in line with expectations".

In the same quarter of last year, Munich Re suffered losses of 700 million euros in this sector, when the first wave of the pandemic led to the cancellation of numerous events.

The group said it was "well on track" to achieve its annual net profit target of 2.8 billion euros, though it was less optimistic about achieving its target of 400 million euros in life and health reinsurance.

The forecast comes as severe flooding in Germany and devastating wildfires in the US are expected to weigh on the insurance industry in the coming months.

Munich Re will publish its final second-quarter results August 10.

 

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