Munich Reinsurance Co. saw lower catastrophe losses, even as man-made losses rose due to the Baltimore bridge disaster, as first-quarter profit soared 68.4% on high rates and strong April 1 renewals.
“Every line of business played a role in this impressive performance,” Chief Financial Officer Christoph Jurecka said in a statement. “In addition, we got a boost from the treaty renewals at 1 April, where we tapped into attractive growth opportunities against a backdrop of continuing high rates.”
First-quarter net result rose to €2.14 billion ($2.30 billion) from €1.27 billion a year ago. Insurance revenue from insurance contracts issued rose to €15.06 billion from €14.27 billion, attributed mainly to organic growth in the reinsurance segment and at primary insurer Ergo International.
“We still expect to generate a profit of €5 billion in 2024,” Jurecka said. “In fact, it has become more likely that we will surpass that target.”
The group earlier reported a preliminary first-quarter net profit of about €2.1 billion, ahead of expectations. Operational performance in all lines of business is better than expected for the full year in 2024, the reinsurer said at the time.
The property/casualty reinsurance combined ratio improved to 75.3 from 86.5.
The segment’s net result nearly doubled, Munich Re said.
Major losses in excess of €30 million fell to €650 million from €1.04 billion a year ago, including gains and losses from the runoff of major losses from previous years, the group said. Major-loss expenditure corresponded to 9.9% of net insurance revenue, down from 16.4% and “far below the expected average of 14%,” Munich Re said.
Man-made major losses rose to €418 million from €165 million. The largest individual loss was the collapse of the Francis Scott Key Bridge in Baltimore.
The group doesn’t give specific figures for either its own loss or that of the market from the Baltimore disaster due to the complicated assessment of the event, a spokesperson told BestWire.
Major losses from natural catastrophes fell to €232 million from €870 million, taking into account the effects of discounting and risk adjustment, Munich Re said.
In April 1 reinsurance renewals, Munich Re said it increased the volume of business written 6.1% to €2.6 billion.
“The company selectively exploited the ongoing favorable market conditions to expand attractive business, with growth opportunities being realized particularly in India, Latin America and Europe,” Munich Re said. “These involved both strengthening existing client relationships and establishing new ones.”
The group said price development was stable overall and mostly compensated for higher loss estimates in some areas, that were mainly attributable to inflation and other loss trends.
Primary insurance prices rose in many markets and Munich Re said it benefited from proportional reinsurance contracts.
Market pressure rose slightly but Munich Re said it expects the environment to remain positive for July renewals.
Life/health reinsurance generated a higher technical result on strong growth new business and revenue, Munich Re said.
For the Ergo primary insurance segment, the net result and insurance revenue rose as revenue was driven by the international segment, Munich Re said.
Ergo International’s profit gained on profitable growth, good major-loss experience and strong P/C performance, the group said.
The segment also saw good underwriting performance in its L/H business.
Underwriting entities of Munich Reinsurance Co. have current Best’s Financial Strength Ratings of A++ (Superior) and A+ (Superior).