German reinsurance group Munich Re will no longer insure against events canceled due to pandemics, a board member said on Tuesday.
The world’s largest resinsurer is making the change after it faced large losses this year in the wake of the coronavirus crisis.
Torsten Jeworrek, who oversees the reinsurance segment, said that Munich Re would remain in the business but that the tweak in its strategy was a result of the pandemic. The reinsurer will also adjust prices for event cancellation coverage, he said.
The cancellation and postponement of sports events like the Olympics in Tokyo as well as concerts have been a major burden for Munich Re, which expects a total of 4 billion euros ($4.85 billion) in COVID-related losses.
The disclosure came as it announced new financial targets.
Munich Re aims to increase its return on equity by 12% to 14% by 2025. That is up from a return of 9.2% in 2019.
The company also said it was targeting an annual rise in earnings per share of at least 5% on average by 2025. It said it would continue a shift away from coal, oil and natural gas.
The reinsurer has said it expects to return to pre-pandemic annual profit levels of 2.8 billion euros in 2021.
A series of hurricanes and fires in North America have come on top of the pandemic-related losses. ($1 = 0.8249 euros)
(Reporting by Tom Sims and Alexander Huebner; Editing by Maria Sheahan)
Topics Munich Re
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