Munich Re provisionally estimates that its claims payments for the devastating earthquake and tsunami in Japan will total some €1.5bn (after retrocession and before tax). As a result, its profit target of around €2.4bn for the financial year 2011 can no longer be maintained.
This initial loss estimate is based solely on modelling. Owing
to the extent of the destruction, further possible aftershocks and
difficult clearing-up operations, it will be many weeks before the
losses are assessed and all the claims notifications from Japanese
primary insurers have come in. As many reinsurance covers do not
attach until very high losses have been sustained by individual
cedants, it will only become apparent at a later stage whether and
to what extent reinsurers are affected by losses under particular
treaties. Further uncertainties result from the impact on
international flows of goods and supply chains from business
interruptions suffered by Japanese industrial producers.
For Munich Re, the first quarter of 2011 had already been marked by high losses from the earthquake in New Zealand, the floods in Brisbane and Cyclone Yasi in Australia. Now including the projected losses from the earthquake and tsunami in Japan, the major-loss burden from natural catastrophes amounts to over €2.5bn (after retrocession and before tax), thus far exceeding the volume to be expected for this period. That means the profit target for 2011 of around €2.4bn is no longer achievable.
Munich, 22 March 2011
Aktiengesellschaft in München
This announcement 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.