Munich Re Withdraws 2020 Profit Guidance on COVID-19 Uncertainties
Munich Re is withdrawing its profit guidance of €2.8 billion (3.1 billion) for 2020 as a result of the “great uncertainty” caused by the macroeconomic and financial impacts of COVID-19 in combination with the reinsurer’s expected man-made and natural-catastrophe losses during the year.
Munich Re said its property-casualty reinsurance segment saw a considerable claims burden from losses in connection with the effects of the significantly worsened COVID-19 crisis during the first quarter.
“The claims expenditure is due mainly to the cancellation and postponement of large events,” said Munich Re in a statement. The reinsurer anticipates profits in the low three-digit million euro range for the first three months of 2020, compared to €633 million (US$696.3 million) in the first quarter of 2019.
Even after the impacts of capital-market and loss developments, Munich Re said its solvency ratio is still comfortably within the communicated optimal range of 175%–220%.
The company plans for an increase in its dividend to €9.80 per share (US$10.80), which will be proposed at the annual general meeting on April 29.
However, implementation of the 2020/2021 share buy-back program announced on Feb. 26, 2020 will be discontinued until further notice and until there is greater clarity both on the actual burdens arising from COVID-19 and on capital requirements for potential organic or inorganic business opportunities, added Munich Re.
Source: Munich Re
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