- Including Hurricane Jeanne, loss burden of around Euro 500m from what is historically an unusually close succession of windstorms in the Atlantic and Pacific
- Target for the year much more difficult to achieve
- The Group expects continued risk-commensurate prices and conditions
The Munich Re Group is less strongly impacted by the cyclones in the Atlantic and in the Pacific than first supposed. Whereas the Group's primary insurers are not affected at all, its reinsurers currently expect a loss burden of approx. Euro 500m before taxes. In detail: The Group could reduce its estimate for Charley to Euro 75m. It also anticipates a loss of Euro 65m for Frances and Euro 215m for Ivan. Jeanne, which is still active in the form of a rain area over North Carolina, will probably generate losses ranging between Euro 80m and Euro 100m. The burden for the Group from the Pacific typhoons Songda and Chaba amounts to Euro 40m.
Stefan Heyd, the Board member whose responsibilities include corporate underwriting: "In spite of the loss picture being more favourable now, the overall burden including the losses from Hurricane Jeanne will make it much more difficult to achieve our 2004 target (Euro 2bn after taxes)."
Economic losses from this year's windstorm season in the Atlantic and the Pacific so far are considerable, as are insured losses. Munich Re puts overall economic losses so far at around US$ 50bn and total insured losses at approx. US$ 20bn to US$ 35bn.
"The reduced burden on Munich Re compared with similar natural hazard events of the past is due to our business policy with regard to deductibles and limits of liability in recent years," Heyd said. "We continue to attach great importance to risks being transparent, meaning that we have been and still are able to be much more selective in our approach." Besides that, as Heyd pointed out, it is necessary to consider that a state catastrophe fund, the Florida Hurricane Catastrophe Fund, is participating to a substantial degree in the compensation in the personal lines property insurance sector.
From the upcoming treaty renewals in reinsurance business, Munich Re expects the current level of risk-adequate prices and conditions to remain stable on the whole.
The presentation for today's media conference will be found at the beginning of the event at 11 a.m. (CEST) on our website at www.munichre.com. You will also be able to view a recording of the press conference in the days to come.
signed Heyd signed Küppers
This media information contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forward-looking statements or to conform them to future events or developments.