BERLIN, Feb. 25 (Xinhua) -- Profits of German reinsurer Munich Re dropped almost 60 percent to 1.2 billion euros (1.5 billion U.S. dollars) in 2020, a year "marked by high losses in connection with COVID-19," the company said on Thursday.
Munich Re's operating result declined similarly as the company announced that pandemic-related losses totaled 3.4 billion euros at its reinsurance sector and 64 million euros at its subsidiary ERGO.
"In spite of the tremendous challenges posed by COVID-19, Munich Re closed out 2020 with a clear profit," said Joachim Wenning, chief executive officer (CEO) of the company.
Munich Re's core business, the reinsurance division, generated a profit of 694 million euros, down almost 70 percent year-on-year after reaching 2.3 billion euros in fiscal 2019. However, the CEO stressed that the company was "ideally positioned to resolutely exploit opportunities for profitable growth in the improved market environment."
Claims linked to natural disasters were "far lower than expected" last year. Hurricane Laura, which devastated parts of U.S. states Texas and Louisiana, and killed 77 people back in August, became the "costliest natural catastrophe" for the company, at 280 million euros.
For the fiscal year 2021, Munich Re continually targeted a profit of 2.8 billion euros. Overall, the German reinsurer anticipates financial consequences from COVID-19 to be on a "considerably smaller scale than in 2020."
Following the announcement, Munich Re, listed at Germany's benchmark DAX index of the country's 30 major companies, was among the biggest winners, closing at 1.53 percent on Thursday. (1 euro = 1.22 U.S. dollars)