Alberta floods, Oklahoma tornado hit Munich Re in Q2

Munich Re released Tuesday its financial results for the quarter ending June 30, estimating a claims burden of 45 million euros from the Alberta floods and 35 million euros from the May 20 tornado that killed dozens in Oklahoma.

The Munich-based reinsurer reported gross written premiums, across all lines, of 12.809 billion euros for the second quarter, up 1.6% from 12.605 billion euros during the second quarter of 2012. As of Tuesday, a euro was worth $1.38.

In P&C reinsurance, Munich Re reported gross written premiums of 4.135 billion euros during the second quarter of this year, down 0.4% year-over-year from 4.152 billion euros in 2012.

For the first half of the year, gross written premiums across all lines were 26.093 billion euros, up from 1% from 25.827 billion euros for the first half of 2012. Gross written premiums for P&C reinsurance were 8.533 billion euros for the first six months of this year, up 1.6% from 8.397 billion euros in the first half of 2012.

Munich Re’s loss ratio in P&C reinsurance for the first six months of 2013 was 62.8, down 3.2 points from 66.0 in the first six months of 2012. Its combined ratio in P&C reinsurance was 92.4 for the first half of this year, down 3.3 points from 95.7 for the same period of 2012.

“The major-loss burden for the first quarter was below the statistically expectable level, whilst that of the second quarter was above it,” the company stated.

The “claims burden” from natural catastrophes was 338 million euros for the first six months, of which 314 million euros was allocated to the second quarter.

“At the end of May and beginning of June, persistent rainfall in many parts of central Europe caused heavy flooding,” Munich Re stated in its financial report. “Hardest hit were eastern and southern Germany, the Czech Republic and several regions in Austria.”

Meanwhile, the record flooding in June in Alberta also affected Munich Re.

“Based on initial estimates, we anticipate a burden of around (45 million euros),” Munich Re stated of the Alberta floods.

Munich re is also anticipating a major-loss expenditure of about 35 million euros for the tornado that devastated the Oklahoma City suburb of Moore May 20. At the time, a tornado with a width of 1.3 miles and a path length of 17 miles hit Moore and the same storm produced another 21 tornados. At the time, AIR and EQECAT estimated insured damages of more than $2 billion and published reports indicated 24 died.

Munich Re reported a consolidated profit for the second quarter of 543 million euros this year, down 33.1% from 812 million euros in 2012. For the first six months, consolidated profit dropped 4.5% year over year, from 1.594 billion euros in 2012 to 1.522 billion euros this year.

Gross written premiums for reinsurance in North America for the second quarter were 3.552 billion euros in 2013, compared to 3.03 billion euros in Q2 2012. Across all lines (including primary, life and health), Munich Re’s gross written premiums in North America were 4.652 billion euros for the latest quarter, compared to 4.124 billion euros in Q2 2012.

For all of 2013, Munich Re predicts gross written premiums for the company will be “in the range” of 50 to 52 billion euros.

“Provided that loss experience is average in the second half of the year, our assumption is that the technical result for 2013 will be good, although owing particularly to numerous large losses in the second quarter, it is likely to be below the exceptionally high level of 2012,” the company stated.