By Sonia Amaral Rohter
Munich Re AG (MUV2.XE) said on Thursday that it swung to a loss in the third quarter as a result of claims from natural disasters.
The German reinsurer reported a net loss for the three months ended Sept. 30 of 1.44 billion euros ($1.67 billion), compared with a net profit of EUR685 million a year earlier. The company's after-tax, or consolidated, loss for the quarter was EUR1.44 billion versus EUR684 million the previous year.
Gross premium revenue for the quarter was down 0.5%, at EUR12.28 billion, while net revenue was EUR1.59 billion, down 1.9% year-over-year, the company said.
According to a FactSet consensus forecast, the company was expected to report an after-tax loss of about EUR1.42 billion and gross premium revenue of around EUR12.35 billion. The consensus estimate for third-quarter net investment was EUR1.76 billion.
Munich Re's combined ratio for property and casualty reinsurance was 160.9%, compared with 92.5% a year earlier.
The company confirmed its 2017 forecast for a small profit, on the proviso that "business performs in line with expectations in the fourth quarter." It estimates the combined ratio for property-casualty reinsurance for the full year will be 112%.
In late October, Munich Re indicated that due to losses associated with hurricanes Harvey, Irma and Maria, it expected to report a loss in the third-quarter of EUR1.4 billion and as a result it cut its profit guidance for 2017, saying that it now expected to generate a "small profit" for the year. It had previously guided to a range of EUR2.0 billion to EUR2.4 billion.
Munich Re says that major losses in the third quarter, after retrocession and before taxes, had a EUR3.2 billion negative impact, of which the three hurricanes accounted for losses of EUR2.7 billion.
"The major losses from natural catastrophes in the third quarter have had a substantial impact on our result," said Joerg Schneider, chief financial officer at Munich Re. "Despite business being otherwise good, this means that we can only post a small profit in 2017."
Write to Sonia Amaral Rohter at [email protected]