Munich Re says major P&C reinsurance losses very low in Q2, to far exceed analyst consensus

Signalling a continuation of more equitable sharing of major loss activity between the insurance and reinsurance tiers of the market, global player Munich Re has cited “very low major-loss expenditure in property-casualty reinsurance” in Q2 2025, leading it to pre-announce a quarterly result that far exceeds the analyst consensus.

Today, Munich Re announced that it expects to post net profit of approximately €2.1 billion, significantly higher than the equity analyst consensus estimate of €1.624 billion for Q2 2025.

The reinsurance company also said that in its Global Specialty Insurance division, major losses are also expected to come in “far below the average expectation.”

With an expectation that the first-half of the year will see it reporting a net result of approximately €3.2 billion, Munich Re noted that it continues to forecast a net result of €6 billion for the 2025 financial year.

While the first-quarter of 2025 was hit by the industry loss from the wildfires in California, the second-quarter has been characterised by more secondary peril and severe weather activity loss events.

While broker Aon estimated first-half natural catastrophe loss activity as leading to global insured losses of over $100 billion, the second-highest H1 ever, it also noted that roughly 90% came from the United States with wildfires and severe convective storms (SCS) events the main drivers.

Reinsurance companies having shifted up and away from more frequent weather loss events, while also dialling down exposure to lower-layer wildfire risks, appears to be continuing the trend of more of these losses staying with primary insurance underwriters, Munich Re’s results might suggest.

The major reinsurers, like Munich Re, have been calling for a more equitable sharing of losses and citing it as one goal from the recent year’s of reinsurance market hardening, where attachment points rose and terms and conditions were redesigned.

Prior to the reinsurance market hardening that began around 2022, global reinsurers had been taking a much more significant share of losses from severe weather and secondary peril events.

But Munich Re’s comments today show that the restructured risk sharing in global reinsurance arrangements has stuck through the last set of renewals at January 1st, insulating their results to a degree from what was still a relatively expensive quarter of US catastrophe activity, it appears.