Munich Re, the world's largest reinsurer, plunged into loss in the second quarter of this year, largely as a result of a cash injection required by its US arm, American Re, and higher than expected claims against the World Trade Center disaster.
Munich Re said in a statement that it recorded a net loss of €383m in the period from April to June, compared with profit of €493m a year earlier. While the loss was deep, it was not as deep as analysts had expected.
The main reasons behind the second quarter loss included an additional cash injection of $2 billion required by the group's US unit, American Re, and a further $500m in claims connected with the attack on the World Trade Center on September 11.
The insurer said it was no longer in a position to provide a net profit forecast for the whole of 2002. Another factor weighing on earnings was a €1.5 billion writedown on the insurer's share portfolio, which hit bottom-line earnings by €787m.
Given the current uncertainty on the stock markets, further writedowns could not be ruled out for the whole year, the company warned.
