Munich Re has posted a lower first-quarter property and casualty profit after major losses exceeded expectations.

The P&C reinsurance business made a net profit of €343 million ($597 million), down 72.3% from €1.24 billion ($2.14 billion) a year earlier. Insurance revenue from contracts issued rose to €4.89 billion ($8.5 billion) from €4.7 billion ($8.2 billion).

Major loss expenditure amounted to 21.3% of net insurance revenue, compared with the company’s 17% forecast and up from 10% a year earlier.

Man-made major losses fell to €251 million ($437 million) from €262 million ($456 million), but natural catastrophe major losses grew to €757 million ($1.3 billion) from €189 million ($329 million).

The California fires cost €800 million ($1.39 billion) – the P&C reinsurance division’s largest single claims event.

Munich Re’s global specialty insurance segment also took an earnings hit from the fires, with net profit slumping to €8 million ($13.8 million) from €163 million ($283 million).

“Again, the LA wildfires constituted [global specialty insurance’s] largest single claims event,” the reinsurer said.

Munich Re says claims from the US wildfires are expected to cost €1.1 billion ($1.89 billion).

Overall net profit fell 48.3% to €1.09 billion ($1.9 billion) in the first quarter.

“Although Munich Re did not emerge unscathed from the devastating wildfires in Los Angeles in January 2025, we nevertheless managed to generate a quarterly profit … This exemplifies the Munich Re Group’s resilience, boosted once again by the prudent management of our business portfolio,” CFO Christoph Jurecka said. 

Munich Re says it still expects to make net profit of €6 billion ($10.4 billion) this year.