Munich Re announces profit target of €2.8bn for 2021; Profit outlook of €1.2bn for 2020

Munich Re announces profit target of €2.8bn for 2021; Profit outlook of €1.2bn for 2020

Munich Re's Board of Management has today approved its profit guidance for 2021. Despite anticipated further COVID‑19 losses, Munich Re will seamlessly return to its pre-pandemic profit level of €2.8bn. Munich Re expects financial consequences from COVID-19 next year as well, but on a considerably smaller scale than in 2020. In reinsurance, COVID-19 claims will amount to approximately €500m, and the technical result will be reduced by €50m due to foregone premiums. The ERGO field of business anticipates negative effects on the net result totalling about €100m. Group premium income will rise to about €55bn in 2021 - despite a decrease in premium volume caused by the pandemic. The return on investment will be above 2.5%. Financial planning for 2021 is subject to the approval of the Supervisory Board.

On account of considerable uncertainty pertaining to the repercussions of COVID-19, Munich Re withdrew its profit forecast for this year on 31 March 2020. The Board of Management has today approved a revised forecast for this year, with Munich Re expecting a consolidated profit of €1.2bn for 2020. A profit of €200m has been forecast for Q4. As in Q1-Q3, there has been high expenditure for COVID‑19 in Q4. In 2020, Munich Re expects €3.4bn in reinsurance losses arising from COVID-19, with life and health reinsurance accounting for €360m and property-casualty reinsurance for €3.02bn. ERGO expects a negative COVID-19 impact of approx. €65m on the net result. Group premium income in 2020 is expected to total €54bn. High market volatility and the further fall in interest rates notwithstanding, the return on investment will be approx. 3%.