Executives at Munich Re, one of the world’s largest reinsurance companies, confirmed recently that although the Los Angeles wildfires will be a major loss for the firm, it will remain below its provision for natural catastrophe events, with the reinsurer confident of achieving its net profit target of €6 billion for 2025, according to reports.
Back in mid-December, Munich Re revealed that it was aiming for an IFRS net profit of €6 billion in 2025 on the back of consistently good operational performance in all business segments.
Since then, the key January 1st, 2025, reinsurance renewal season has passed, and just a week into the year, destructive wildfires started burning and continue to engulf parts of Southern California, expected to drive insurance industry losses of between $20 billion and $45 billion, according to estimates from brokers and risk modellers.
As reported by Reuters and dpa’s international news service, Munich Re CEO, Joachim Weening and Thomas Blunck, Member of the Board of Management, commented on the company’s profit target in light of the LA wildfires at a recent reception in Munich, Germany.
The publications report that during the event, Blunck confirmed that Munich Re has a normal appetite for risk in the State of California, and that while it will be a major loss for the firm, the wildfires “will certainly remain well below the provision we always have for natural catastrophes.”
“So, it’s not throwing us off course at all,” he added.
Regarding profits, CEO Wenning confirmed that 2024 will be another record year for Munich Re, although the reinsurer’s Q4 and full-year 2024 results aren’t scheduled to be released until late February.
“In terms of earnings, we are at the top of the competitive environment, and we want to stay there,” said Wenning, as reported by Reuters. “We continue to look to the future with great confidence.”
In fact, part of the message from Wenning, according to reports, was that Munich Re sees further potential for growth on top of the €6 billion target for this year.
“At least as things stand today, it does not yet appear that we have reached the end of the road,” he said, adding that the only question mark is the pricing cycle in property and casualty reinsurance, according to dpa’s report.
Broker reports on the January 1 renewals show that globally, property catastrophe reinsurance rates declined when compared with the prior year, although with structural changes maintained, notably higher attachment points, the market is still viewed as favourable, and reinsurer appetite was up at 1.1 as players pushed for growth.
The casualty market is more uncertain given the reserve bolstering seen in 2023 from prior underwriting years, but discipline and caution shown at the renewals suggests that, overall, the P&C market environment remains attractive for sellers, and Munich Re clearly feels this way.
The post Munich Re execs confident on €6bn profit target despite LA wildfire impact: Reports appeared first on ReinsuranceNe.ws.
