Munich Re’s P&C double hit with investments and catastrophes
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The property and casualty reinsurance unit of Munich Re has become the only business within the group to report investment losses during the first nine months of the year.
P&C Re posted losses of €311m (£272m), compared with an investment profit of €1.9bn 12 months ago.
On a quarterly basis, the unit recorded €143m losses, compared with €865m investment profit in Q3 2021.
The German reinsurance group attributed the decline to losses on derivatives, equity impairments and write-downs related to the war between Russia and Ukraine.
All other units posted investment profits in the first nine months and in Q3, albeit the figures were lower than in the respective periods last year.
Overall, the group’s investment result slashed by half to €2.86bn in 9M from €5.7bn in the same period in 2021. The quarterly figure was €904m, down from €2.1bn a year ago.
P&C Re hurt by Q3 catastrophes
On the underwriting side, Munich Re’s P&C unit also suffered from major catastrophes and was the only segment posting an operating loss in the three months to September.
Just in the quarter alone, the unit reported an operating loss of €928m, a deterioration from a €39m loss in the same period last year. This contributed to the overall group’s operating loss of €346m just in Q3 alone, compared with an operating profit of €204m a year ago.
Munich Re said the costliest natural disaster for the group in Q3 was Hurricane Ian – a category 4 hurricane that hit Florida at the end of September - with projected losses of around €1.6bn.
Chief financial officer Christoph Jurecka said: “Hurricane Ian matches the pattern science would expect of a warming world. Therefore the rising probability of such extreme storms is part and parcel of our models and must be reflected in pricing.”
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