Profit slump at Munich Re: Board of Management still sticks to goals

Created: 08/09/2022 09:32

The logo of the reinsurer Munich Re.

© Lino Mirgeler/dpa/archive image

Munich Re is also suffering from the fluctuating capital markets.

The world's largest reinsurer is sticking to its goals despite a drop in profit of a good 30 percent.

Munich – Price losses in shares and other securities have brought the reinsurer Munich Re a drop in profits in the second quarter.

The shareholders received a surplus of 770 million euros and thus a good 30 percent less than a year earlier, as the Dax group announced on Tuesday in Munich.

Munich Re: Board of Management continues to target consolidated profit of 3.3 billion euros

CEO Joachim Wenning is now expecting a lower return on investments for 2022 as a result of the high depreciation, but is still aiming for a consolidated profit of 3.3 billion euros.

However, from the Management Board's point of view, the targets are subject to increased uncertainty.

According to the statement, this is due to the fragile development of the economy, the fluctuating capital markets and the unclear further development of the corona pandemic.

The financial consequences of the Russian war of aggression in Ukraine are still very uncertain.

In the first half of the year, Munich Re set aside around 200 million euros for damage caused by the war.

Munich Re analyzes increasing losses from natural catastrophes

In July, Munich Re also warned of increasing losses from natural catastrophes.

The reinsurer has been documenting and analyzing the damage caused by natural catastrophes worldwide for decades, as this is of great importance for risk calculations.

"Basically, damage from natural disasters is increasing worldwide, but it's not like there's a clear direction for every hazard in every region of the world."

Ernst Rauch, Head of Geoscientific Research at the company, cited tropical storms – hurricanes, typhoons and cyclones – as an example.

"Their frequency has increased in the North Atlantic, but the number has been declining in the South Pacific." On the US East Coast and in the Caribbean, the current hurricane season could be more severe than usual.

In any case, the United States is hit by natural disasters with above-average frequency.

In the first half of the year, the economic damage there amounted to 28 billion dollars, more than 40 percent of the global total.

Most of these were caused by severe thunderstorms and tornadoes.

also read

SPD: Bernd Westphal criticizes the gas levy

Industry President: Economic growth more at risk than expected

Regarding the current heat and drought in Europe, Rauch referred to the trend of rising temperatures with declining summer rainfall in Central Europe.

Annual mean temperatures in large parts of Europe have risen by more than 1.5 degrees since systematic records began at the end of the 19th century.

According to the Munich Re database, heat, drought and forest fires are also more common in many other regions of the world.

A few months ago, the Intergovernmental Panel on Climate Change (IPCC) appealed to insurers to review their claims calculations for natural catastrophes.

"Early understanding of climate change is essential for us," said Rauch.

"We continuously adapt our risk models and our entire risk management to scientific findings."