Munich:
Munich Re is aiming for a profit of €2.8bn in 2021. The group expects financial consequences from COVID-19 next year as well, but on a considerably smaller scale than in 2020.
In reinsurance, burdens will arise from COVID-19 claims of approximately €500m.In addition, foregone premiums will further decrease the technical result by about €50m.
In its reinsurance field of business, Munich Re anticipates premium income of approx. €37bn and a profit of approximately €2.3bn in 2021.
Given the considerable price increases for reinsurance cover, Munich Re will continue to spur its dynamic and profitable growth in reinsurance.
“We expect to generate a profit of clearly above 1bn € this year. The pandemic has naturally had a considerable impact on our result. But the burdens arising from COVID-19 are financially manageable for Munich Re. By covering insured losses totalling billions, we are playing a substantial role in helping the economy and society cope with the pandemic. Our business is clearly on track. In the absence of COVID-19, we would have been able to achieve our original result target for 2020. Thanks to our strong balance sheet, we are in a very good position to exploit current market opportunities. In the coming year, we plan – despite anticipated further COVID‑19 losses – to meet the profit target of €2.8bn as envisaged prior to the pandemic,''said Christoph Jurecka,CFO,
In property-casualty reinsurance, Munich Re anticipates expenditure for COVID‑19 claims of approximately €300m in 2021.
A rough estimate by line of business is: contingency €200m, property/business interruption €50m and credit insurance €50m. In addition, lower premiums due to COVID-19 will reduce the technical result by a further €50m. The combined ratio in property-casualty reinsurance is estimated to be 96%.
Without the above-mentioned expenditure owing to COVID‑19, the combined ratio would amount to 95%.In life and health reinsurance, Munich Re expects – assuming COVID-19 losses of €200m – a technical result, including business with non-significant risk transfer, of approx. €400m.
Group premium income in 2020 is expected to total €54bn. This is the highest figure in the history of Munich Re and the result of seizing profitable growth opportunities. High market volatility and the further fall in interest rates notwithstanding, the return on investment will be approximately 3%.
The reinsurance field of business is set to contribute €0.7bn to the consolidated result in 2020. Premium income is expected to total approximately €36bn (target for 2020: about €34bn).
Of the €3.4bn in reinsurance losses arising from COVID-19, life and health reinsurance accounts for €360m and property-casualty reinsurance for slightly more than €3bn.
The largest percentage of COVID-19 claims in property-casualty reinsurance was due to contingency (€1.66bn), a market segment in which Munich Re was the market leader.
In addition, Munich Re anticipates the following COVID-19 claims: property/business interruptions (€965m), D&O/workers compensation (€200m), credit (€170m) and marine/aerospace (€25m). In accordance with its established principles,
The 2020 combined ratio in property-casualty reinsurance is expected to be approximately 106%, with the normalised combined ratio amounting to 97%.
This forecast assumes that further major losses not related to COVID-19 through the end of 2020 will amount to approx. €225m, which is around 1% of property-casualty premium income. Munich Re projects a technical result, including business with non-significant risk transfer, of above €100m in life and health reinsurance.
Munich Re will present its business strategy and its medium-term financial ambitions as scheduled on 8 December 2020.