2011 profit target unattainable due to Japan disasters: Munich Re
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MUNICH—Munich Reinsurance Co. said Tuesday that its claims payments for the earthquake and tsunami in Japan will reach at least €1.5 billion ($2.13 billion) and that its profit target for 2011 of €2.4 billion ($3.4 billion) cannot be attained, the company said in a statement.
The loss estimate is predicated solely on modeling, Munich Re said in a statement, adding that the extent of the destruction from the quake and tsunami, further possible aftershocks and cleanup operations during the next several weeks and months likely will alter the estimate.
The Munich-based reinsurer said it likely will be weeks before losses can be assessed and all the claims and notifications from Japanese primary insurers are recorded.
“We will naturally continue to make our capacity available to our clients in Japan and support them in dealing with the losses,” said Torsten Jeworrek, Munich Re’s CEO, in a statement. “We can be counted on, particularly in moments like this, and are in close contact with our clients.”
The losses for Munich Re are mainly tied to commercial business.
Reports have said up to 8% of European reinsurers’ premium could be impacted by the disasters in Japan.
Munich Re is among several reinsurers that renew two-thirds of their annual property/casualty contracts in January, and the remainder in April and July. The renewals on April 1 typically focus on the Asia-Pacific region.
Munich Re has suffered some large losses in the first quarter of 2011, including the earthquake in New Zealand and floods in Australia.
Including the projected losses from Japan, the major-loss burden from natural catastrophes amounts to more than €2.5 billion ($3.54 billion), Munich Re said in a statement, which exceeds the volume to be expected for this period.
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