Munich Re releases 2021 profit targets
On December 1, reinsurance company, Munich Re announced its profit targets for 2021 and its profit outlook for 2020.
This year, the company says it is forecasting a profit of €200-million (approximately CAD$312-million) in the fourth quarter of 2020. For all of 2020, Munich Re forecasts a profit of €1.2-billion (CAD$1.9-billion).
“As in Q1-Q3, there has been high expenditure for COVID-19 in Q4,” states the reinsurer. “If these losses were excluded, the group would have met its originally envisaged 2020 profit target of €2.8-billion (CAD$4.4-billion), which was retracted in March. Group premium income in 2020 is expected to total €54-billion (CAD$84.3-billion). This is the highest figure in the history of Munich Re.”
The company says it anticipates paying €965-million (CAD$1.5-billion) in claims for property and business interruptions alone.
The company further adds that it is aiming for a profit of €2.8-billion (CAD$4.4-billion) in 2021. Although it expects to see the financial consequences of COVID-19 continue in the coming year, it says this will happen on a considerably smaller scale than in 2020. “In reinsurance, burdens will arise from COVID-19 claims of approximately €500-million (CAD$780-million). In addition, foregone premiums will further decrease the technical result by €50-million (CAD$77.9-million).” Group premium income in 2021 is expected to set another new record of approximately €55-billion (CAD$85.8-billion).
The company adds that all forecasts and targets face considerable uncertainty, owing to fragile macroeconomic developments, volatile capital markets and the unclear future of the pandemic.