Worldwide reinsurance giant Munich Re has actually reported further development over the second-quarter and at the July renewal season, where it found prices 2% greater and now looks ahead to the rest of the year with a projection for extra firming at the January 2022 renewals.Munich Re has actually reported EUR1.106 billion of profit for the second-quarter of 2021, nearly double the previous year, which it says puts it on-track to hit its full-year targets.
This is despite an expectation that current serious weather condition will dent its third-quarter, as Munich Re said today that it prepares for mid-three- digit million euro losses from the July flooding in Germany and throughout Central Europe.
Joahim Wenning, Chairman of the Board of Management, commented, “On track to meet our target of EUR2.8 bn for the year, the Group is showing a very solid revenue for the very first half of the year. All areas of our operation are helping provide on our tactical objectives: Munich Re is growing successfully. Our reliability and expertise are in need, and we are making good usage of the favorable market environment– constantly stabilizing healthy development and rigorous danger management. Munich Re is tapping and shaping tomorrows brand-new business: cyber, for instance, reveals how we can move from the function of leader to that of market leader. Munich Re presumes obligation. We are more committed than ever to the sustainability of our company, from decarbonising our investments and treaty company to enhancing ESG governance at Board of Management level. Faced with challenges such as pandemics, heatwaves and floods, our aspiration as an insurer stays to contribute our part to the options of the future.”
Over the course of Q2 2021, Munich Res outcome was helped by a below-average total expenditure for significant losses, the business reported today.
The COVID-19 pandemic continued to hit the reinsurers life and health result though, adding EUR241 countless losses throughout the quarter.
Annualised return on equity (RoE) was excellent, amounting to 19.2% for Q2 2021 (10.4% in the previous year) and 15.0% for the first-half (7.1% in the previous half-year).
Reinsurance included EUR951 million to the second-quarter result, more than double the previous year.
Residential or commercial property and casualty reinsurance was EUR858 million of that, as Munich Re stated premium volumes surged to EUR7.155 billion and the combined ratio fell to 90.1%.
The combined ratio has actually been helped substantially by lower significant losses, as Munich Re reported that standard losses were in fact up at 537.7% in Q2, but major losses only contributed 6.8%, which is just over half the allocated 12%.
In reality, had significant losses been on a par with either 2019 or 2020 in the first-half, Munich Res combined ratio for its P&C reinsurance unit would have been close to or simply over 100.
Major losses actually came out at EUR432 million for the quarter, well down on the EUR799 countless the prior year quarter.
At the July reinsurance renewals, Munich Re said that it “made use of growth chances” to grow the renewal book to EUR3.9 billion, an increase of 11.1%.
This July renewal company was focused on North America, South America, Australia, and global customers, the reinsurer said.
Rates also continued to trend higher throughout numerous lines of reinsurance organization, which Munich Re credits to claims activity, consisting of the pandemic, also keeping in mind that main insurance coverage rates continue to climb up as well.
In General, Munich Re said rates at thee July renewal for its portfolio increased by 2%, on a risk-adjusted basis.
Looking ahead, Munich Re said that it is favorable on rates firming further at the next renewal season.
The business discussed that it expects, “the marketplace environment will continue to improve year on year in the next major renewal round in January.”
Adding to this probability of firming is the current claims burden, from extreme weather events in the United States or Europe in Q3.
Munich Re has actually raised its premium targets for the year, by EUR1 billion to EUR40 billion for reinsurance, and by EUR0.5 billion to EUR18 billion for the ERGO field of organization, so group gross premiums are forecasted to reach EUR58 billion for 2021.
However, because of raised COVID-19 losses in the life and health reinsurance division, Munich Re warned that “it is now more likely that the separated partial goal of a technical outcome of EUR400m, including the result from reinsurance treaties with non-significant risk transfer, will not be fulfilled.”
On the recent European flooding, Munich Re notes “a really high degree of unpredictability” over the ultimate size of losses it will experience this occasion, but states that it “anticipates overall claims expenditure for reinsurance and ERGO to be in the mid-three-digit million euro range.”
The reinsurer likewise kept in mind that its 92% combined ratio target for ERGO may not now be met.
Joahim Wenning, Chairman of the Board of Management, commented, “On track to fulfill our target of EUR2.8 bn for the year, the Group is showing a very solid earnings for the first half of the year. All areas of our operation are helping provide on our strategic goals: Munich Re is growing profitably. Munich Re is shaping and tapping tomorrows new company: cyber, for example, shows how we can move from the function of pioneer to that of market leader. Munich Re assumes duty. We are more dedicated than ever to the sustainability of our service, from decarbonising our investments and treaty company to enhancing ESG governance at Board of Management level.