Munich Re still on track for full-year profit mark despite ‘higher than expected’ cat losses

Munich Re has reported roughly $1.43 billion in net profit for the first quarter of 2023, despite “higher than expected” losses from natural catastrophes in its property-casualty operation.

The German reinsurance giant achieved a combined ratio for the quarter of about 86.5%, slightly worse than its 86% forecast for the full year.

Within life and health reinsurance, Munich Re posted a technical result of about $330 million for the quarter, putting it on track to meet its full-year target of $1.1 billion.

For ERGO, the result was about $220 million, well over a quarter of the company’s full-year forecast of $770 million.

Munich Re expects net profit of about $4.4 billion for the 2023 financial year.

It said it is reporting financial reports for the first time in accordance with the new IFRS 9 and IFRS 17 standards.

“In contrast to the standards applied through 2022, IAS 39 and IFRS 4, Munich Re expects higher results in life and health reinsurance owing to the earlier recognition of earnings in the profits,” the group said in a news release.

“In property-casualty (re)insurance, effects from the accretion of interest and from discounting currently result in a positive contribution to profits. These changes in methodology are reflected in the expectation of a net result of about €4 billion (US$4.4 billion).”

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