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'Significant' cat increase drives down Munich Re Q2 P&C reinsurance income

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'Significant' cat increase drives down Munich Re Q2 P&C reinsurance income

Munich Re Co. reported second-quarter consolidated profit attributable to equity holders of €724 million, down slightly from €729 million a year earlier.

EPS was €4.84, compared to €4.71 a year earlier.

Its reinsurance business reported operating result of €701 million, down 21.7% from €896 million a year earlier, while unit ERGO Group AG reported operating result of €296 million, up from €260 million.

Life and health reinsurance business saw a year-over-year increase in operating result to €323 million from €176 million, while property and casualty reinsurance contributed €378 million, down 47.5% from the year-ago quarter. Munich Re attributed this decline to a "significant increase" in man-made major losses and higher basic losses.

Man-made major losses amounted to €501 million, versus 187 million a year ago, with the most expensive individual loss by far resulting from structural damage to a hydroelectric power station in Colombia. Major losses from natural catastrophes came in at €104 million, compared to the year ago's €66 million.

The group's gross premiums written declined year over year to €11.19 billion from €11.80 billion. Net earned premiums came in at €10.96 billion, compared to the year-ago €11.77 billion.

Investment result totaled €1.76 billion, a decrease from €1.89 billion in the second quarter of 2017. The group's technical result decreased 23.0% year over year to €569 million.

Net expenses for claims and benefits fell year over year to €8.88 billion from €9.51 billion.

For the first half, attributable profit came in at €1.55 billion, up 20.8% from the year-ago €1.28 billion.

The company's Solvency ratio stood at approximately 250% at June-end, up from 244% at the beginning of 2018.

The German reinsurer said it still expects to post a full-year 2018 consolidated result of between €2.1 billion and €2.5 billion, as well as gross premiums written of between €46 billion and €49 billion. It did, however, lower its projection for ERGO International's combined ratio for the full year by 1 percentage point to 96%.