Munich Re sees lower net result in first quarter

Munich Re sees lower net result in first quarter | Insurance Business America

Insurance News

Munich Re sees lower net result in first quarter

Company cites reasons for decline

Insurance News

By
Terry Gangcuangco

Top reinsurer Munich Re has published its financial results for January to March 2023 – the quarter in which the company used the new accounting standards IFRS (International Financial Reporting Standards) 9 and 17 for the first time.

According to Munich Re, here’s how it fared in the period, including the contributions from life & health and property-casualty:

Source

Q1 2023

Q1 2022

Reinsurance net result

€1.05 billion

€1.32 billion

Thereof: Reinsurance – L&H

€291 million

€367 million

Thereof: Reinsurance – P-C

€760 million

€958 million

ERGO net result

€219 million

€156 million

Thereof: L&H Germany

€41 million

€137 million

Thereof: P-C Germany

€166 million

€(64 million)

Thereof: International

€12 million

€84 million

Group net result

€1.27 billion

€1.48 billion

Lifting the lid on the numbers, Munich Re said: “In Q1 2023, Munich Re generated a net result of €1,271 million. Whereas the Q1 result in the previous year had been bolstered in particular by low major losses in property-casualty reinsurance, as well as by currency gains, the result for the first quarter of 2023 was impacted by precisely the opposite effects.

“Insurance revenue from insurance contracts issued climbed to €14,273 million. The total technical result amounted to €1,809 million. Owing mainly to currency losses against the US dollar and the Canadian dollar, the currency result fell to –€145 million. The operating result was €1,768 million and the effective tax rate was 26.4%.

To illustrate, chief financial officer Christoph Jurecka cited the Turkey-Syria earthquake.

“The earthquake that hit Turkey on the border with Syria in February 2023 was one of the most catastrophic we have seen in recent history,” he said. “Around 60,000 people lost their lives. The insured losses amount to some €4 billion to €5 billion, of which Munich Re is shouldering €0.6 billion – one of the reasons why major losses from natural catastrophes in Q1 2023 were higher than expected.

“Owing to otherwise pleasing operational performance and a strong investment result, however, Munich Re generated a net result of almost €1.3 billion. In addition, the April renewals saw Munich Re continue its trend of profitable growth. Accordingly, we are confident that we can reach our 2023 net result guidance of €4 billion; the chances for us to surpass this target have increased.”

What do you think about Munich Re’s financial results? Share your thoughts in the comments below.