News: Munich Re 2020 profit plunges 55% as pandemic takes toll.
FRANKFURT (Reuters) – German reinsurance group Munich Re expects net profit to recover this year after more than halving in 2020, as the coronavirus crisis helped bring claims to almost a ten-year high.
The major losses to the virus and natural disasters in 2020 were 4.689 billion euros ($ 5.71 billion). This was its highest level since 2011, when the company had to make payouts for a tsunami in Japan, major earthquakes in New Zealand, and the Deepwater Horizon oil rig explosion.
The claims in connection with pandemics alone amounted to more than 3.4 billion euros.
(Graphic: slump in profits: 2020 was the biggest loss since 2011)
“Despite the enormous challenges posed by COVID-19, Munich Re closed 2020 with a clear profit,” said CEO Joachim Wenning.
The net profit of 1.211 billion euros compared to 2.707 billion euros in the previous year is slightly below a consensus forecast of 1.261 billion euros.
Munich Re expects profits to recover to EUR 2.8 billion in 2021.
The insurance industry is grappling with major damage from the pandemic, for example due to canceled and postponed events, including the Olympic Games, as well as losses from hurricanes and forest fires in the United States.
Virus uncertainty caused the company not to set a full-year profit target and it will no longer insure itself against events canceled due to pandemics.
Munich Re’s results, while weaker after the virus, contrast with those of competitor Swiss Re, which posted a full-year loss of $ 878 million, the first loss since the financial crisis in 2008.
Reporting from Tom Sims; Arrangement by Maria Sheahan and Carmel Crimmins
Original Source © Reuters