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MUNICH—Catastrophe losses estimated at €500 million ($681.1 million) from the earthquake in Chile and Windstorm Xynthia in Europe will pressure Munich Reinsurance Co. to meet its target 97% combined ratio this year, Chief Financial Officer Jörg Schneider said Wednesday.
The quake that devastated parts of Chile late last month is expected to result in gross claims of €400 million ($544.9 million), Mr. Schneider said. Losses from Xynthia, which battered western Europe, could reach €100 million ($136.2 million), he said during a media presentation in Munich providing more detail on the reinsurer’s results that were released in February.
The catastrophe losses will be responsible for about 3 to 3.5 percentage points combined ratio that—depending on how claims play out for the rest of the year—could make it difficult to keep the 2010 ratio at 97% or lower, Mr. Schneider said.
Munich Re had projected natural catastrophe losses would contribute the historical average of 6.5% of the combined ratio this year, but that looks difficult to achieve because the quake and windstorm are expected to generate “half our annual calculation in the first two months,” he said.
The catastrophe losses do not endanger Munich Re’s aim to earn a 2010 profit similar to the €2.56 billion ($3.49 billion) it recorded in 2009, said Nikolaus von Bomhard, chairman of the board. “We are aiming for a €2 billion ($2.72 billion) profit, and we can maintain that despite Chile and Xynthia,” he said.
“Of course, natural catastrophe results will play a role overall,” Mr. von Bomhard said, “but not as important a role as they do for the combined ratio.”