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Q2 combined ratio up 6.5 points for Munich Re


August 9, 2016   by Canadian Underwriter


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Munich Re reported Tuesday a 6.5-point deterioration in its Q2 combined ratio in property & casualty reinsurance, as the recent wildfires in Northern Alberta and the April earthquakes in Japan were among the natural catastrophes that contributed to the firm’s major loss expenditures of 542 million euros in the three months ending June 30.

In P&C reinsurance, Munich Re reported a combined ratio of 99.8% for the three months ending June 30, 2016, up 6.5 points from 93.3% during the same period in 2015.

The loss ratio deteriorated 6.1 points, from 62.4% in Q2 2015 to 68.5% in the most recent quarter.

Claims costs from natural catastrophes were 335 million euros in the second quarter of this year, compared to 21 million euros in Q2 2015. The euro was trading Tuesday at Cdn$1.46

Munich Re anticipates expenditures of “around” 400 million euros as a consequence of the wildfires in Northern Alberta in early May, which resulted in the evacuation of Fort McMurray and surrounding area.

The April 14 earthquakes near Kumamoto, Japan will cost Munich Re around 85 million euros, the reinsurer suggested.

Munich Re reported man-made losses of 207 million euros in Q2, up from 186 million euros in Q2 2015.

For the first six months of this year, Munich Re reported a major loss expenditure 643 million euros – net of retrocession and before tax – of which 542 million was accounted for in the most recent quarter.

The major loss expenditure was 207 million euros in Q2 2015 and 462 million euros during the first half of last year.

For the first half of this year, Munich Re had gross written premiums of 24.44 billion euros, down 4.2% from 25.51 billion euros in the first six months of 2015.

“If exchange rates had remained the same, premium volume would have fallen by 1.4% year on year,” Munich Re stated.

During the first six months of 2016, gross written premiums from P&C reinsurance were 9.117 billion euros, up 1.3% from 9 billion euros in the first half of last year. Of its other divisions, Munich Re reported gross written premiums, during the first half of 2016, of 4.576 billion euros from life reinsurance, 4.52 billion euros from Ergo life and health Germany, 1.9 billion euros from Ergo International and 2.46 billion euros from Munich Health.

In P&C reinsurance, the loss ratio was 62.7% during the first half of this year up one point from 61.7% in the first half of 2015. The combined ratio was 94.3% in the first six months of 2016, up 1.5 points from 92.8% for the same period of 2015.

Company wide, Munich Re reported a consolidated result of 1.41 billion euros in the first six months of 2016, down 24.4% from 1.866 billion euros during the same period of 2015. The investment result dropped 0.4%, from 4.341 billion euros during the first half of last year to 4.322 billion euros during the first half of 2016.

During the most recent quarter, Munich Re reported a consolidated result of 974 million euros, down 9.4% from 1.075 billion euros in Q2 2015. The investment result was up 9.1%, from 2.5 billion euros in Q2 2015 to 2.75 billion euros in the latest quarter.