Munich Re expects “low three-digit-million euro” loss from Beirut blast

Reinsurance giant Munich Re has revealed it expects claims in a “low three-digit-million euro” range from the massive explosion at the Port of Beirut in August.

Speaking at a virtual media briefing on Monday, Torsten Jeworrek, CEO of reinsurance at Munich Re pegged the reinsurer’s exposure to the explosion at between Eur150mn and Eur250mn ($177mn to $295mn).

Munich Re’s loss figure follows previous guidance from the Lebanese minister of economy and trade, Raoul Nehme, who last month said insured losses from the blast had already reached $425mn with 2,500 claims filed as of mid-August.

 A total of 10,000 claims in total are expected as a result of the 4 August blast, the ministry said.

The estimate – revealed in a tweet by the Lebanese Presidency following a meeting between Nehme and the president of the Lebanese Insurance Brokers Syndicate (LIBS) – falls broadly inline with that from the Association of Insurance Companies in Lebanon (ACAL) which pegged the total damages resulting from the blast in Beirut at between $5bn and $10bn, expecting insured losses to be capped at around 30 percent of this.

Commenting on the (re)insurer’s Covid-19 loss estimate, Jeworrek said its Covid-19-related losses have developed with “reduced momentum”, compared with the first two quarters.

“We don’t have a new quantitative update but what we can say is there are further losses in our portfolio, particularly on the contingency side, but at a reduced momentum since 30 June.”

The comments come after Munich Re reported in July a Eur700mn ($799mn) charge in the second quarter for Covid-19-related losses driven by event cancellations. The Q2 Covid-19 hit comes after Munich Re revealed it expected to suffer Eur800mn of losses in its P&C business in Q1.

Munich Re also anticipates a “low triple-digit-million euro” amount in claims expenditure for the damage caused by hurricanes Hanna, Isaias and Laura in July and August 2020, based on an initial estimation.

However, Jeworrek added that the carrier’s loss estimate from the three hurricanes remains uncertain.

Commenting on the ongoing California wildfire season, the executive said events’ impact on Munich Re is “not estimated to be material” at this point in time.