Munich Re says 2021 profit goal in reach despite Covid-19, storms

German reinsurance giant Munich Re at the International Congress Center in Munich, southern Germany.

Sven Hoppe | AFP | Getty Images

German reinsurance group Munich Re on Tuesday forecast more Covid-19-related losses in its reinsurance business than previously expected but said that its overall 2021 profit target was attainable.

Munich Re and the industry have been rebounding from the fallout of last year’s coronavirus pandemic outbreak, but Munich Re nevertheless expects Covid-19 losses at its reinsurance arm to now total 800 million euros ($924.32 million) this year, up from 700 million euros previously.

Despite those losses, and steep claims from storms in Germany and the United States, a 2021 profit target of 2.8 billion euros “remains within reach,” Chief Financial Officer Christoph Jurecka said.

The reaffirmation of its guidance target came as it reported third-quarter earnings.

Net profit of 366 million euros ($422.88 million) in the third quarter compared with 199 million euros a year earlier. Last month, it said profit in the period was around 400 million euros.

Its shares were indicated to open 2.3% lower. The Munich-based company said that results were dampened by 170 million euros in Covid-19-related losses to its life and health reinsurance division.

That impact was “higher than expected”, Munich Re said. 

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