Munich Re Expects Q3 Loss After Hurricane Claims of $3.2B
Munich Re expects claims of €2.7 billion ($3.2 billion) from Hurricanes Harvey, Irma and Maria, which will lead to a third quarter loss of €1.4 billion.
The group said it expects a small profit for the full year, as long as the business performs in line with expectations.
“High losses from severe natural catastrophes are part and parcel of our business; that is why we are here. Our capital base remains very strong,” said Jörg Schneider, Munich Re’s chief financial officer. “Munich Re has enough capital to take advantage of the opportunities this exceptional situation provides in terms of profitable growth.”
Munich Re’s overall major loss expenditure will amount to €3.2 billion ($3.8 billion) in the third quarter, which includes claims from the three hurricanes, the Mexican earthquakes as well as man-made losses.
On Oct. 20, Swiss Re, the world’s second-largest reinsurer, estimated its claims from hurricanes Harvey, Irma and Maria in the United States and from two earthquakes in Mexico would be roughly $3.6 billion in the third quarter.
On March 15, Munich Re announced that its profit guidance for 2017 would be in the range of €2.0 billion-€2.4 billion ($2.4 billion-$2.8 billion). On Sept. 13, Munich Re reported that the severe losses to be expected from Hurricanes Harvey and Irma were likely to result in a loss for the third quarter, and might hit its 2017 profit target for 2017. Since then, Hurricane Maria has also caused significant damage in the Caribbean and an additional hit to Munich Re.