Munich Re suffered losses of nearly €800m in Q1 2020 due to the Covid-19 pandemic
Main building of Munich Re in Munich, Germany. (Credit: Munich Re / Marcus Buck, München)
Munich Re has reported a 65.1% drop in its first quarter 2020 (Q1 2020) profit to €221m compared to €633m made in the same quarter in the previous year.
The German reinsurance company blamed the low quarterly profit on the high Covid-19-related losses. The losses totalled around €800m, of which most of them were particularly due to cancellation or postponement of major events due to the pandemic.
In the fourth quarter of 2019, the reinsurance group registered a profit of €217m.
For Q1 2020, the company’s earnings per share were down by 63.8% to €1.57 from €4.35 reported in Q1 2019.
Gross premiums written by the German reinsurer in the reported quarter were up by 6.8% year on year to €14.28bn.
Munich Re’s reinsurance unit contributed €149m to the consolidated result in Q1 2020, which is 72.9% less than the figure of €548m reported in Q1 2019. The gross premiums written for the unit increased by 10.2% to €9.23bn from €8.38bn in the year before quarter.
ERGO, the primary insurance unit of Munich Re, saw its profit come down by 14.7% to €72m in Q1 2020, compared to €85m reported in Q1 2019. The gross premiums written for the business was up by 1.1% from €4.99bn in the first quarter of 2019 to €5.05bn in Q1 2020.
Munich Re CFO comments on the Q1 2020 results
Munich Re CFO Christoph Jurecka said: “The impact of the coronavirus pandemic on lives and economies is on our minds every day. We express our sympathy for the victims and their families. Munich Re is doing everything it can to protect the health of its clients, staff members and their families.
“The high losses due to COVID-19 are financially manageable for Munich Re. Thanks to our strong balance sheet and our prudent risk management, we remain a reliable partner to our clients – even in these challenging times.”