Global reinsurance player Munich Re has said it forecasts a profitable first quarter in 2018, with a consolidated result of more than €800 million anticipated.
Munich Re had recently lifted its profit guidance for 2018 slightly over the prior year, forecasting better results thanks to improved reinsurance pricing conditions, along with continued improvement in the results of its primary arm ERGO.
For the full-year 2018 Munich Re is targeting between €2.1 billion and €2.5 billion of profit, up from the €2 billion to €2.4 billion it had targeted for 2017.
Yesterday evening the reinsurer revealed that it anticipates a bumper start to 2018, saying that thanks to what it terms a “randomly low incidence in major losses” it expects to report a good first-quarter.
The consolidated result of more than €800 million for Q1 2018 is still subject to the finalisation of the firms Q1 consolidated financial statements, but thanks to low major-loss expenditure in the firms reinsurance division, the company seems confident that it will be at or above that level.
This compares to a consolidated result for the first quarter of 2017 of €557 million.
Munich Re said that it is keeping its full-year guidance, of €2.1 billion and €2.5 billion of profit for 2018, unchanged at this time. The firm has forecast rising profits through to 2020 and beyond.
This positive forecast could set the tone for first-quarter reporting of reinsurers, as long as the companies have been accurately reserving for prior year losses and do not experience adjustments to estimates for the 2017 hurricanes and wildfires.
As we wrote yesterday, the CEO of Munich Re said that the company would be open to considering offers from potential anchor investors.
