Munich Re stops selling pandemic insurance coverage
In addition to COVID-19-related losses, the German insurer recently suffered major claims tied to the Beirut explosion and natural disasters.
Munich Reinsurance announced that is has stopped selling pandemic business insurance coverage after it reportedly took a $1.8 billion (1.5 billion euros) hit in the first half of 2020 due to the worldwide COVID-19 pandemic, according to Bloomberg. The global insurer is considering whether or not to include pandemic protection in future property and casualty insurance policies; it will continue to offer the cover in life and health policies.
“We are currently examining whether we will offer new contracts that include pandemic protection in property and casualty insurance in the future,” Torsten Jeworrek, Munich Re’s head of reinsurance, said in an interview with Bloomberg. “For the moment, it has been suspended, for example, with respect to event cancellations.”
Munich Re has indicated that event cancellations caused a major portion of its COVID-19-related losses. The company also recently suffered significant losses of at least $118 million tied to the Beirut port blast and said it expects “a low triple-digit-million euro amount in claims” for damages caused by Hurricanes Hanna, Isaias and Laura.
The German insurer recently voiced support for federally-backed funds to help cover future pandemics and crises. “We need new reliable mechanisms to insure such risks,” said Stefan Golling, chief underwriter at Munich Re, in a statement. “The only way to achieve this is by creating state-backed risk pools in which insurers can participate with limited capacity. Furthermore, insurers can help to assess risks accurately and organize distribution and claims settlement.”
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