Delivering its interim results for 2021, Munich Re has raised its expected loss as a result of COVID from both its life and health (L&H) and property casualty segments to EUR 700 million, from a previous expectation of EUR 500 million.
In L&H reinsurance in Q2 2021, Munich Re reported a profit of EUR 93 million, compared with EUR 59 million a year earlier. The segment’s technical result also improved year-on-year, from EUR 48 million to EUR 64 million.
However, losses from the pandemic came in above expectations within L&H reinsurance for Munich Re, impacting the quarterly result by EUR 140 million.
“These were dominated by the developments in India and South Africa and by the diminishing trend in anticipated expenses for mortality covers in the US. Apart from the impacts of COVID-19, Q2 went well overall, mainly owing to retroactive increases in premium for the Australian disability business and a positive one-off effect pertaining to a large North American reinsurance treaty,” the carrier said in a statement.
For the quarter, the impact of COVID-19 losses on reinsurance totalled EUR 241 million, and EUR 505 million for the first half of the year.
However, the carrier nonetheless increased its loss expectation from COVID-19 for L&H reinsurance for 2021 as a whole to around EUR 400 million, double the previous expected EUR 200 million impact.
For the P&C segment, the pandemic loss expectation remains the same at some EUR 300 million.
Commenting on the recent devastating flooding, Munich said: “In July, various regions in western and central Europe and especially in Germany suffered severe weather events and disastrous flooding (low pressure system “Bernd”) that led to significant damage to public and private property. As there is still a very high degree of uncertainty at this stage, precise claims forecasts are not yet possible. Munich Re expects overall claims expenditure for reinsurance and ERGO to be in the mid-three-digit million euro range.”
Overall, Munich Re announced profit of EUR 1.1 billion for the second quarter of 2021, as profits improved in both its property and casualty (P&C) and life and health (L&H) reinsurance segments despite ongoing losses related to the COVID-19 pandemic.
For the first half of the year, a period which saw Munich Re’s overall profit improve to roughly EUR 1.7 billion, reinsurance contribution EUR 1.4 billion to the consolidated result.