Atlantic Hurricanes Wipe Out Reinsurers’ Profits in Europe
Munich Re, by some measures the world’s largest reinsurer, said
that its losses from hurricanes Harvey, Irma and Maria would be 2.7 billion euros, or $3.2 billion, though it warned that the estimate was “fraught with considerable uncertainty.” The losses will come to €3.2 billion including damage from other natural catastrophes such as earthquakes in Mexico, Munich Re said.
FRANKFURT — The financial damage from the hurricanes
that struck Texas, Florida and the Caribbean in recent months crossed the Atlantic on Thursday when Munich Re, a German insurer, warned that virtually all of its profit this year would be wiped out by the horrendous cost of the disasters.
Virtually all insurance companies that sell to consumers and businesses unload some of their risk to reinsurers like Munich Re, Swiss Re or SCOR SE, a French company
that also reported losses from the hurricanes on Thursday.
Early in the year, before the hurricanes struck, Munich Re had said its profit for the year would be at least €2 billion.
As a result, the company said on Thursday, it will report a loss of €1.4 billion
for the third quarter of 2017 and only a “small profit” for the full year.
Now, Munich Re and several other large reinsurers — companies
that effectively insure other insurers — have reported big losses resulting from the natural disasters.