Munich Re takes 700-mn-euro coronavirus hit

German reinsurance giant Munich Re said Monday that the global coronavirus pandemic wiped around 700 million euros ($800 million) off its core business in the second quarter of 2020.

In a statement, the company said that the huge financial blow was largely “attributable to cover for major events”.

Despite the severe losses in reinsurance, Munich Re said it expects to post a net profit of 600 million euros in the second quarter, as losses unrelated to the pandemic were less severe than expected.

It added that its primary insurance brand ERGO had performed well between April and June.

As a reinsurer, Munich Re’s job is to cover insurance companies against the risks inherent to their business.

The latest financial hit follows first quarter losses of nearly 1 billion.

The sobering results led Munich Re to abandon several key financial targets, including an annual goal of a 2.3-billion-euro profit in reinsurance.

On Monday, it also confirmed that it would “definitely not implement” a share buy-back programme suspended earlier this year, saying it expected “considerable ongoing uncertainty” linked to the pandemic to last until 2021.

The reinsurer will publish final second quarter results on August 6.

kih/hmn/rl