Swiss Re Insurance-Linked Fund Management

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Munich Re pegs hurricane Ian loss at €1.6bn after retro, on $60bn industry loss


Global reinsurance giant Munich Re has estimated its net loss from hurricane Ian will be around EUR €1.6 billion, which is based on an industry loss expectation of US $60 billion.

munich-re-wall-signMunich Re’s industry loss estimate, of US $60 billion, is excluding losses to the NFIP, which as everyone is aware could add another number of billion and raise the total nearer to $70 billion perhaps.

Munich Re’s loss estimate is after retrocession and we can expect the reinsurer to share some of the loss with any third-party capital partner arrangements it has in place and the reinsurer also noted the estimate remains subject to substantial uncertainty.

Despite the impacts of hurricane Ian, Munich Re said it still expects to report a quarterly profit of about €500 million, helped by a one-off at its primary unit ERGO.

The company said it still remains on-track for its €3.3 billion profit target for 2022, but said it has “become significantly more challenging to meet the 2022 profit target,” because of one-off effects and investment-side challenges.

It’s also based on Q4 catastrophe losses remaining at expected levels.

Munich Re’s hurricane Ian loss estimate is higher than competitor Swiss Re, which announced a US $1.3 billion hit from the storm.

The difference could be down to retrocessional arrangements in part though, with Swiss Re thought to have a much larger quota share sidecar program than Munich Re these days, so perhaps sharing more of its gross hurricane Ian loss with investors, while Munich Re retains more.

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