MUNICH (dpa-AFX) – The destruction caused by Hurricane “Ian” in Florida cost the world’s largest reinsurer Munich Re
expected to be in the billions. The Executive Board estimates the burden at around 1.6 billion euros. That’s even more than the second in the industry, Swiss Re
After the paper had temporarily lost more than two and a half percent in the morning, it went up by around three percent to EUR 256.90 by the early afternoon. The share was traded only a good one percent cheaper than at the turn of the year.
Munich Re board member Thomas Blunck said on Thursday that it was too early for a reliable estimate of the hurricane damage. The group also emphasized on Friday that the sum of 1.6 billion euros was still subject to “considerable uncertainties”. However, the group has already calculated such damage that it has reinsured itself with other companies or passed it on to the capital market – for example in the form of catastrophe bonds.
Estimates of how expensive the hurricane will cost the global insurance industry also differ widely. Munich Re is assuming an insured market loss “within a currently wide range” of around US$ 60 billion. The portion of the US National Flood Insurance Program (NFIP) is excluded. Swiss Re had estimated the insured loss including the NFIP at 50 to 65 billion dollars on Tuesday.
“Ian” made landfall in Florida in late September as a level four of five hurricane. During his journey across the southern US state, he caused enormous damage and dozens of people died. When it came to quantifying the financial damage, risk experts initially differed widely. The insurance service provider Corelogic, which specializes in risk analysts, went from 31 to 53 billion for wind and flood damage in its most recent published estimate from October 6 – including the NFIP share.
Munich Re expects a profit of around half a billion euros for the third quarter, despite the expected burden of 1.6 billion euros. Analysts had expected an average loss of 167 million euros. As a result, they had already written off the board’s profit target for the full year. On average, the experts recorded by Munich Re only had a surplus of 2.76 billion euros on the slip for 2022 – a good half a billion less than the company was aiming for.
According to Munich Re, however, the profit mentioned in the third quarter and the confirmation of the profit target are based on positive special effects. In the months of July to September, the positive effect came from the life and health segment of the primary insurance subsidiary Ergo in Germany. And whether the profit target will be achieved for the year as a whole depends not only on the expected development of major losses in the fourth quarter. In addition, the one-off effects that are currently expected should materialize, especially in the case of capital investments. Munich Re intends to publish its final figures for the third quarter on November 8th as planned./stw/nas/mis
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