Munich Re said on Thursday it expected to receive claims for canceled or postponed events because of the coronavirus crisis in excess of 1 billion euros ($1.08 billion) this year after it posted a 65% drop in first-quarter profit.
The German reinsurer, which joins a raft of insurers warning of threats to their business, had already said it would not meet a profit target this year.
In a statement accompanying its quarterly earnings, Munich Re said it was retracting two other profit targets and “faces a significantly higher risk of all its target figures not being attained.”
Finance chief Christoph Jurecka said, however, he would be “very surprised” if the company failed to post a profit in 2020.
“Uncertainty is extremely high,” he told journalists by telephone. “No-one knows how this pandemic will develop.”
Shares traded 1% higher in morning trading in Frankfurt.
Profit in the first quarter fell to 221 million euros ($238.66 million), down from 633 million euros a year earlier.
Event cancellations and postponements made up the bulk of 800 million euros in coronavirus-related losses in the quarter, it said. Claims for canceled and postponed events may exceed 1 billion euros this year, Jurecka said.
The company also expects it will begin to see claims in its life insurance division resulting from virus-related deaths in the United States in the second quarter, he said. ($1 = 0.9273 euros)