German reinsurance giant Munich Re has announced a property and casualty (P&C) reinsurance combined ratio of roughly 86.5% for the first quarter of 2023, despite major losses from natural catastrophe events trending higher than expected.
A P&C reinsurance combined ratio of 86.5% for the quarter is only slightly higher than the 86% Munich Re forecast for the full-year.
In its life and health reinsurance operation, the company has reported a Q1 2023 technical result of around €300 million, which puts the firm on track to meets its full-year 2023 target of €1 billion.
At ERGO, the net result for the opening quarter of the year amounts to roughly €200 million, which is more than a quarter of the full-year target of €700 million.
All in all, Munich Re has announced a preliminary net result of roughly €1.3 billion for the first quarter of 2023, compared with the consensus of €1.012 billion, which is the mean value derived from the estimates of 11 financial analysts.
For the full-year, the firm says that it still expects a net result of around €4 billion, and now sees it as more likely that it will exceed this target given the impressive Q1 performance.
As of Q1 2023, Munich Re’s reporting its financial results 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. 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 €4bn,” says the firm.
Munich Re is scheduled to release its full Q1 2023 financial results in mid-May, so it will be interesting to see just how high catastrophe losses trended in the period. It will also be interesting to see the dynamics of the reinsurer’s growth in the quarter, after it reported previously that it was able to increase written business volume to €15.3 billion at the 1/1 reinsurance renewals.
