Despite substantial losses from natural disaster events rising higher than anticipated, German reinsurance giant Munich Re has reported a property and casualty (P&C) reinsurance combined ratio of about 86.5% for the first quarter of 2023.
The quarter’s P&C reinsurance combined ratio of 86.5% is just marginally higher than the full-year prediction from Munich Re of 86%.
The company has reported a Q1 2023 technical result in its life and health reinsurance operation of about €300 million, putting it on track to fulfill its full-year 2023 target of €1 billion.
At ERGO, the net result for the first quarter of the year was approximately €200 million, exceeding the €700 million full-year goal by more than 25%.
Overall, Munich Re reported a preliminary net result for the first quarter of 2023 of over €1.3 billion, which is higher than the consensus forecast of €1.012 billion, which is the average of the predictions provided by 11 financial analysts.
The company says it still anticipates a net result of about €4 billion for the entire year, but now believes it is more possible that it will surpass this goal given the strong Q1 results.
The new IFRS 9 and IFRS 17 standards will be used by Munich Re to report its financial performance starting in the first quarter of 2023.
“Due to the earlier reporting of gains in profits, Munich Re expects stronger results in life and health reinsurance compared to the rules applicable through 2022, IAS 39 and IFRS 4. Property-Casualty (Re)insurance profits are now being positively impacted by the impacts of discounting and interest accretion. According to the company, a net result of around €4 billion is anticipated as a result of these technique improvements.
It will be interesting to learn just how high catastrophe losses trended during the time when Munich Re releases its full Q1 2023 financial figures in mid-May. It would also be intriguing to observe the reinsurer’s growth patterns in the quarter since it earlier disclosed that it was able to raise written business volume at the 1/1 reinsurance renewals to €15.3 billion.
