Global reinsurer Munich Re has said that while major-loss costs in its property / casualty (P&C) reinsurance operation came in below average for the second-quarter of 2021, COVID-19 had an adverse effect on its life & health (L&H) business in the period.
For the second-quarter of 2021, Munich Re has announced a preliminary net profit of €1.1 billion, which is up on the consensus of €808 million and also 90% higher than the €579 million recorded for the prior year Q2.
During the quarter, the reinsurer’s major-loss expenditure in P&C was below average primarily because of comparatively lower nat cat losses. Also, in P&C, Munich Re notes that COVID-19 related losses were in line with expectations for Q2 2021.
However, in L&H reinsurance, losses from the pandemic “clearly exceeded the expectation mainly due to the high mortality rate in India and South Africa.”
At ERGO, the global reinsurer’s primary insurance arm, Munich Re has reported only minor effects resulted from COVID-19 in Q2.
In Q1 2021, Munich Re reported COVID-19 related losses within P&C reinsurance of roughly €100 million, as well as losses of €167 million in L&H reinsurance.
This recent announcement from Munich Re is preliminary and so details around losses are limited. But while it will become clearer when the reinsurer publishes its Q2 2021 results in full, the pandemic does continue to dent the company’s underwriting, albeit now more so on the L&H side than the P&C side.
For the first-half of the year, Munich Re has announced a result of €1.7 billion, which is an improvement on the first-half of 2020, when the firm booked an additional €700 million of COVID-19 related losses.
With its H1 2021 result at €1.7 billion, Munich Re says it’s on track to meet its annual target of €2.8 billion, despite there being a greater chance of it missing its €400 million target set for the technical result in its L&H reinsurance business.