Reinsurance giant Munich Re has confirmed that it will stop writing coverage for events cancelled due to pandemics.
Munich Re unveiled its “Ambition 2025” growth and results targets earlier today, which include a targeted return on equity of 12-14% by 2025 and a combined ratio of approximately 95% in property / casualty reinsurance.
But alongside these plans senior leadership also revealed that the reinsurer would withdraw from event cancellation lines related to pandemic risk.
Torsten Jeworrek, a member of the board of management who oversees the reinsurance segment, explained that Munich Re would continue to involve itself in event cancellation business.
However, he added that the company would be altering its strategy following the COVID-19 pandemic, with prices set to be adjusted across this line.
Munich Re reported another €1.1 billion of COVID-related losses earlier this month, bringing its total for the year so far to €3.4 billion.
The cancellation and postponement of sports events like the Olympics in Tokyo as well as concerts have hit particularly Munich Re particularly hard.
The reinsurer said that the largest slice of pandemic claims within property / casualty reinsurance relates to contingency lines, of €1.66 billion, a segment of the market which Munich Re was the leader.
It also anticipates property/business interruption claims of €965 million from the pandemic in 2020, D&O/workers comp claims of €200 million, credit claims of €170 million, and marine/aerospace losses of €25 million.
However, despite the elevated level of losses this year, Munich Re expects to return to pre-pandemic annual profit levels of €2.8 billion in 2021.