The firm attributes losses to event cancellation claims in light of coronavirus pandemic

Reinsurer Munich Re has reported losses of around €800m for 2020’s first quarter linked to the ongoing Covid-19 pandemic – the firm added that the majority of these losses concerned event cancellation claims.

Despite this sizeable figure, Munich Re’s chief financial officer Christopher Jurecka said that the firm’s high losses are “financially manageable” due to its strong balance sheet and risk management practices.

He said: “The impact of the coronavirus pandemic on lives and economies is on our minds every day. We express our sympathy for the victims and their families. Munich Re is doing everything it can to protect the health of its clients, staff members and their families.

“The high losses due to Covid-19 are financially manageable for Munich Re. Thanks to our strong balance sheet and our prudent risk management, we remain a reliable partner to our clients – even in these challenging times.”

Missed profit targets

At the end of March, Munich Re confirmed that because of Covid-19-related losses associated with the cancellation or postponement of major events, as well as the general uncertainty around the macroeconomic and financial impacts of coronavirus, the business will not achieve its profit guidance of €2.4bn for 2020.

With this in mind, the firm will not be specifying a new 2020 profit target. It has also withdrawn its profit guidance for the company’s reinsurance arm and the combined ratio for property-casualty reinsurance.

Munich Re’s Q1 trading update reported an overall profit of €221m, while the firm’s operating result fell to €387m compared to €771m for the same quarter last year. Gross written premium (GWP) has increased by 6.8% year-on-year to €14,284m.