Global reinsurer Munich Re has pre-warned that losses in its property / casualty reinsurance segment from major events came in above-average for the first-quarter of 2021, primarily as a result of the severe winter weather in the U.S. in February.
The German reinsurer is the latest to comment on the significant impacts of winter storms Uri and Viola in the U.S., notably in the state of Texas, in February.
While Munich Re does not provide an estimate of losses from the event, it’s announced that during Q1 2021, “major-loss expenditure in property-casualty reinsurance was higher than average, primarily owing to an unusually severe cold spell in the USA, in particular in the state of Texas.”
Currently, the majority of carriers that have reported on the impacts of the storm on their operations ahead of Q1 results, have based their estimates on an insurance industry loss of between $15 billion to $16 billion.
Alongside the costs of natural catastrophe events during the quarter, Munich Re has also said that both fields of its reinsurance business were affected by losses related to the ongoing COVID-19 pandemic, although these were in line with expectations.
As at the end of 2020, Munich Re had reported COVID-19 losses of more than €4.1 billion.
Despite above-average losses, the reinsurer has still achieved a preliminary net profit of roughly €600 million for the opening quarter of the year, which is up on the consensus of €466 million and also the €221 million reported in the same period in 2020.
According to Munich Re, this positive Q1 result is a reflection of good operational development overall, an investment performance in line with expectations, and a solid result at its ERGO unit.