Global reinsurance giant Munich Re has said that its second-quarter result will be helped by a lower incidence of natural catastrophe losses, which will help it deliver an above consensus estimate roughly EUR 1.1 billion of profit for the period.
The reinsurance company said that, during Q2 2021 thee major-loss expenditure of its property & casualty reinsurance business was below average.
This is mainly a result of comparatively low losses from natural catastrophes, Munich Re explained.
However, losses from the COVID-19 pandemic continue for the company and while they were deemed in-line with expectations in the P&C reinsurance business, Munich Re’s life and health reinsurance business saw losses exceed expectation due to mortality claims.
The reinsurer said that these elevated pandemic life claims are mainly due to the high mortality rate in India and South Africa during the quarter.
At the same time, Munich Re said that its primary insurance division ERGO felt only minor effects from COVID-19 in the second-quarter of the year.
On an operational basis, all areas saw the result developing favourably during the period, Munich Re further explained.
As a result, the company is reporting a preliminary net profit of around EUR 1.1 billion for Q2 alone, well-above a consensus estimate of EUR 808 million from across 14 analysts.
This puts the reinsurer’s half-year result at around EUR 1.7 billion, meaning the company feels it is well on track to reach its annual target of EUR 2.8 billion.
However, given the continued pandemic mortality losses, Munich Re warned that the probability of missing its target of EUR 400 million for the technical result of its life and health reinsurance business has now increased.