International reinsurer Munich Res property and casualty reinsurance department fell to a technical underwriting loss on the back of significant disaster losses in the third-quarter, however despite the heavy problem the business full-year targets remain in sight.The third-quarter of 2021 remained rewarding for Munich Re, with a EUR366 million combined outcomes tape-recorded for the duration.
The business reported 12.4% development in reinsurance premiums underwritten, as it continues to grow its business in the improving price environment, however the P&C reinsurance unit reported a combined ratio of 112.8%, so fell to a technical loss on its underwriting.
The motorist for that technical underwriting loss was, of course, the substantial disaster loss activity, with Munich Re reporting EUR1.8 billion of nat feline losses from hurricane Ida and the flooding in Europe, the same figure as its pre-announcement a fortnight back.
Cyclone Ida was the primary reason for these, at EUR1.2 billion, while the European flooding cost the reinsurance firm EUR600 million.
There was likewise some effects from the pandemic to deal with in the quarter, with Munich Re reporting that higher than anticipated expenses of around EUR170 million related to COVID-19 losses in its life and health reinsurance service.
For the first nine-months of the year, the P&C Reinsurance combined ratio likewise stands raised at 100.9%, but still the business is on-track in this division with 12.7% ROE reported for the year to end of September.
Because of the tough disaster loss environment, while Munich Re is still forecasting a full-year earnings of around EUR2.8 billion, with EUR2.3 billion coming from its P&C reinsurance system, the projection for the P&C reinsurance integrated ratio is now for a result of around 100% of net made premium, so breaking even on a technical underwriting basis.
Thats up from a P&C reinsurance integrated ratio projection of 96% earlier this year, reducing its forecast for a technical result that has actually now cut in half from EUR400 million to EUR200 million.
The Q3 disaster losses are the sole chauffeur of this increase in combined ratio projection for the P&C reinsurance business, which recommends any more significant loss activity over the fourth-quarter might drive the technical underwriting performance to negative levels.
This actually shows the intensity of loss activity in Q3 and how it has actually injured even the largest companies.
Munich Res reinsurance sidecar financiers will undoubtedly have taken their share of the catastrophe loss burden.
Christoph Jurecka, CFO of Munich Re, commented on the outcome, “The horrific pictures of the devastation wreaked by Hurricane Ida and Storm Bernd remain vibrant in our minds. Company, government and people require to strive towards accomplishing the Paris climate objectives in order to slow the speed of climate change and avoid the possibility of natural disasters from increasing any even more. It is crucial that the Climate Change Conference (COP26) in Glasgow be followed up with immediate action.
” Munich Re will carefully implement its enthusiastic CO2 decrease targets in its investments, insurance service and own operations. Together, the two weather events– Ida and Bernd– are expected to cost Munich Re EUR1.8 bn. However, our yearly target of EUR2.8 bn stays within reach, thanks to a rewarding operational performance and high financial investment outcomes”
Major losses consisting of manufactured reached practically EUR2 billion throughout the third-quarter for Munich Re, so were considerably raised over projections, with the catastrophe problem the primary cause, as manufactured major losses dropped to EUR245 million.
Christoph Jurecka, CFO of Munich Re, commented on the outcome, “The horrific images of the destruction wreaked by Hurricane Ida and Storm Bernd remain vibrant in our minds.” Munich Re will carefully implement its enthusiastic CO2 decrease targets in its financial investments, insurance service and own operations. Together, the two weather events– Ida and Bernd– are anticipated to cost Munich Re EUR1.8 bn.