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(Reuters) — German reinsurance group Munich Re will no longer insure against events canceled due to pandemics, a board member said Tuesday.
The world's largest resinsurer is making the change after it faced large losses this year in the wake of the coronavirus crisis.
Torsten Jeworrek, who oversees the reinsurance segment, said that Munich Re would remain in the business but that the tweak in its strategy was a result of the pandemic. The resinsurer will also adjust prices for event cancellation coverage, he said.
The cancellation and postponement of sporting events such as the Olympics in Tokyo, as well as concerts, have been a major burden for Munich Re, which expects a total of €4 billion ($4.85 billion) in COVID-related losses.
The disclosure came as it announced new financial targets.
Munich Re aims to increase its return on equity by 12% to 14% by 2025. That is up from a return of 9.2% in 2019.
The company also said it was targeting an annual rise in earnings per share of at least 5% on average by 2025. It said it would continue a shift away from coal, oil and natural gas.
The reinsurer has said it expects to return to pre-pandemic annual profit levels of €2.8 billion in 2021.
A series of hurricanes and fires in North America have come on top of the pandemic-related losses.
More insurance and risk management news on the coronavirus crisis here.
Germany-based Munich Reinsurance Co. has stopped selling pandemic business cover after it took a €1.5 billion ($1.8 billion) hit in the first half of the year due to the COVID-19 pandemic, Verdict reports. Torsten Jeworrek, reinsurance head at Munich Re, said that the reinsurer is currently examining whether to include pandemic protection in property/casualty insurance in the future.