Munich Reinsurance Company
- Munich Re: Deep shock at the human dimensions of the attacks in the US
- The loss events will involve commitments of up to €1bn for Munich Re and are thus equivalent in size to its claims costs for major natural catastrophes in the last ten years
"Our feelings and sympathies at this time are with the victims of the attacks in New York, Washington and Pittsburgh. Even as a company that is used to dealing with catastrophes and their consequences through our operations in around 150 countries, we can scarcely conceive the terrible suffering of the victims and their families", commented Dr. Hans-Jürgen Schinzler, Chairman of Munich Re's Board of Management, on the news from the US.
In response to many enquiries, Munich Re has stated that in view of the complexity of the events it is naturally too early to know and communicate details of the insurance covers and the related reinsurance protection. The loss events, after all, involved one of the biggest catastrophes ever caused by man.
One of the central functions of insurers and their reinsurers is to partially or fully shoulder the financial burdens of those affected by such losses. Thus, as announced yesterday, the world's leading reinsurer Munich Re will assume substantial claims costs, which may extend into the region of €1bn and will derive mainly from the lines of aviation, buildings, business interruption, life and workers' compensation insurance.
These losses will significantly impact the projected development of the net profit in the current business year 2001 but will not affect the solidity of the Munich Re Group, which is sufficiently prepared even for loss events of this size. By way of comparison, Munich Re points out that it had to bear similar claims burdens for the 1990 winter storms, for Hurricane Andrew in 1992 and for the storms in December 1999 in Europe. Munich Re's largest loss ever in relation to its portfolio was the 1906 earthquake in San Francisco.
Board of Management