Signalling a continuation of extra equitable sharing of main loss exercise between the insurance coverage and reinsurance tiers of the market, world participant Munich Re has cited “very low major-loss expenditure in property-casualty reinsurance” in Q2 2025, main it to pre-announce a quarterly end result that far exceeds the analyst consensus.
Right this moment, Munich Re introduced that it expects to submit internet revenue of roughly €2.1 billion, considerably larger than the fairness analyst consensus estimate of €1.624 billion for Q2 2025.
The reinsurance firm additionally stated that in its World Specialty Insurance coverage division, main losses are additionally anticipated to come back in “far under the typical expectation.”
With an expectation that the first-half of the yr will see it reporting a internet results of roughly €3.2 billion, Munich Re famous that it continues to forecast a internet results of €6 billion for the 2025 monetary yr.
Whereas the first-quarter of 2025 was hit by the trade loss from the wildfires in California, the second-quarter has been characterised by extra secondary peril and extreme climate exercise loss occasions.
Whereas dealer Aon estimated first-half pure disaster loss exercise as resulting in world insured losses of over $100 billion, the second-highest H1 ever, it additionally famous that roughly 90% got here from the US with wildfires and extreme convective storms (SCS) occasions the principle drivers.
Reinsurance firms having shifted up and away from extra frequent climate loss occasions, whereas additionally dialling down publicity to lower-layer wildfire dangers, seems to be persevering with the development of extra of those losses staying with major insurance coverage underwriters, Munich Re’s outcomes may counsel.
The foremost reinsurers, like Munich Re, have been calling for a extra equitable sharing of losses and citing it as one aim from the latest yr’s of reinsurance market hardening, the place attachment factors rose and phrases and situations have been redesigned.
Previous to the reinsurance market hardening that started round 2022, world reinsurers had been taking a way more vital share of losses from extreme climate and secondary peril occasions.
However Munich Re’s feedback at the moment present that the restructured threat sharing in world reinsurance preparations has caught by means of the final set of renewals at January 1st, insulating their outcomes to a level from what was nonetheless a comparatively costly quarter of US disaster exercise, it seems.
