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Man-made disasters dent Munich Re Q2

Munich Re’s second-quarter net profit fell 0.6% to €728 million ($1.14 billion) amid a sharp rise in claims due to man-made disasters.

Man-made losses more than doubled to €501 million ($783 million), while claims costs from natural catastrophes grew 58% to €104 million ($162.5 million).

The property and casualty (P&C) reinsurance unit’s combined operating ratio blew out to 102% from 93.9% in the corresponding period last year.

P&C gross written premium increased 9.5% to €4.6 billion ($7.2 billion), but the business posted a 35.3% drop in earnings to €335 million ($523.5 million) because of the higher losses.

Chairman Joachim Wenning says the reinsurer is “most certainly” on track to earn €2.1-€2.5 billion ($3.3-$3.9 billion) net profit for the year as forecast, despite the slump in second-quarter earnings.

“We also made progress with the implementation of our strategy: Munich Re is becoming more profitable, more digital and leaner,” he said.

The reinsurer increased half-year profit by 20.5% to €1.6 billion ($2.5 billion).