Losses from natural catastrophes were overcome by Munich Re through good operating result, high currency gains, and strong investment result during the third quarter
Main building of Munich Re in Munich, Germany. (Credit: Munich Re / Marcus Buck, München)
Munich Re has reported a 79.1% increase in its third quarter 2019 (Q3 2019) profit to €865m compared to €483m made in the same quarter in the previous year.
In the second quarter, the German reinsurance company registered a profit of €993m.
For Q3 2019, the company’s earnings per share were up by 81.3% to €6.17 from €3.41 reported in Q3 2018.
The company said that it secured a high result despite facing losses from Hurricane Dorian and Typhoon Faxai. The losses from the natural catastrophes were overcome by good operating result, high currency gains, and strong investment result.
Munich Re said that the operating result came down from €1.04bn in Q3 2018 to €980m.
Gross premiums written in the reported quarter were up by 7.4% to €13.74bn compared to €12.79bn in the same quarter in 2018.
Munich Re’s reinsurance unit provided €746m to the consolidated result in Q3 2019 compared to €309m reported in Q3 2018. The operating result for the reinsurance unit was up from €589m to €690m, while gross premiums written surged by 11.9% to €9,582m from €8,566m, during the same comparison period.
The life and health reinsurance business increased its profit to €282m compared to €159m reported in Q3 2018. Premium income of the business moved up to €2.98bn from €2.8bn, said the German reinsurer.
The company attributed the increase in the Q3 profit in the business to contract restructuring and favourable claims experience.
Munich Re reported that its property-casualty reinsurance unit made €464m profit in the reported quarter compared to €151m made in Q3 2018. The unit’s premium volume moved up from €5.76bn to €6.59bn.
The ERGO business of the German reinsurance group saw a 31.4% drop in its Q3 2019 profit to €119m from €173m made in the same quarter in the previous year.
Munich Re CFO comments on the Q3 2019 results
Munich Re CFO Christoph Jurecka said: “We are very pleased to have achieved extremely good results for two quarters in a row now, despite costly hurricanes and typhoons. We now expect to surpass our initial profit and revenue targets overall for 2019.”