German reinsurance giant Munich Re said Thursday the coronavirus had pushed profits lower in 2020 but that it expected the pandemic’s impact to be “considerably smaller” this year.
The Munich-based group, whose main business is cushioning other insurers against risk, booked a net profit of 1.2 billion euros ($1.5 billion) last year, compared with 2.7 billion euros in 2019.
The Covid-19 crisis cost the firm 3.4 billion euros in claims, mainly because it forced the cancellation of major events.
Claims linked to natural disasters were “far lower than expected” in 2020, with Hurricane Laura, which battered the US state of Louisiana last August, coming in as the costliest catastrophe at 280 million euros.
Premium takings for 2020, which are equivalent to revenues in the insurance sector, climbed 6.7 percent to reach 54.9 billion euros.
Despite the weaker profits, Munich Re said it would pay out the same dividend as in 2019 of 9.80 euros per share.
The group said it was optimistic about the current year, aiming for a net profit of 2.8 billion euros and a slight uptick in premiums.
“The group expects the financial consequences from Covid-19 to be on a considerably smaller scale than in 2020,” Munich Re said.
“In 2021, we expect to meet the profit target that we envisaged prior to the pandemic,” added CEO Joachim Wenning.