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ECONOMY

Munich Re profits rise despite Greece hit

The world's biggest re-insurance group, Germany's Munich Re, said Thursday that its second quarter net profit rose 3.8 percent to €736 million ($1.05 billion) despite a heavy charge on its holdings of Greek debt.

Published: 4 August 2011 10:43 CEST
Munich Re profits rise despite Greece hit
Photo: DPA

The result was well above an average analyst forecast of €650 million compiled by Dow Jones Newswires and Munich Re shares posted solid gains in early trading on the Frankfurt stock exchange.

Munich Re said that to ensure clarity in its figures it had had based the value of Greek bonds it owns on their market level as of June 30, resulting in a total charge of €703 million that cut €125 million from its net profit.

The group was boosted however by price increases in some reinsurance segments, chairman Nikolaus von Bomhard said, and by improved earnings in its primary insurance activities.

Gross premium revenue gained 9.2 percent from the second quarter of 2010 to €11.97 billion but this was less than the €12.05 billion expected by analysts.

A statement said Munich Re still expects “to close the year 2011 with a profit,” although its original target “can no longer be achieved” given heavy losses in the first quarter.

Natural catastrophes early this year, especially earthquakes and tsunamis in New Zealand and Japan, have already led Munich Re to declare 2011 its worst year ever.

It now faces charges stemming from the eurozone debt crisis but Munich Re said that debt issued by Greece, Ireland and Portugal represents only four percent of its bond portfolio, which is worth more than €70 billion.

With regard to 2011 as a whole, von Bomhard stressed that “despite the exceptionally heavy claims burdens, we aim to achieve a positive result for the year.”

That would hold true “even if there were additional major losses in the further course of the year, provided these did not significantly exceed the average figure to be expected,” the statement said.

The Munich Re chairman underscored the benefit of building up its primary insurance activities which provide “stable earnings and balances the burdens that occur in reinsurance due to high claims costs for natural catastrophes or major industrial risks.”

He added that “this year especially, our integrated business model is again proving its worth.”

Munich Re shares showed a gain of 1.93 percent to €99.70 in early Frankfurt trading, while the DAX index on which they are listed was up 1.22 percent overall.

AFP/mdm

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PROPERTY

How to ensure your French property is insured for storm damage

Storm Ciaran’s property-wrecking passage through France - with another storm forecast for the weekend - may have many people wondering how comprehensive their insurance cover is. 

Published: 3 November 2023 15:45 CET
How to ensure your French property is insured for storm damage

In the wake of Storm Ciaran, thousands of property owners in France are preparing insurance claims – with initial estimates of the bill for damage between €370 million and €480 million.

Home insurance is compulsory in France, whether you own the property you live in or you rent – and it must include some level of storm damage cover. 

Check also to see if your insurance provides cover in case of a declaration of a catastrophe naturelle.

The garantie tempête (storm guarantee) covers damage caused by violent winds. What constitutes a ‘violent wind’ varies from contract to contract, but there appears to be a widespread consensus of agreement on wind speeds over 100km/h.

In most insurance contracts, this covers damage caused by the storm and within the following 48 hours – so you’re covered if, for example, a tree weakened by the storm comes down within that period and damages your property.

Be aware that, while the storm guarantee automatically covers the main property, it generally only covers any secondary buildings and light constructions – such as a veranda, shed, solar panels, swimming pool or fence – if they are specifically mentioned in the contract. 

The same is true of any cars damaged by debris. A basic insurance contract might not include storm damage, so it is always worth checking.

Damage must be reported to your insurer as quickly as possible. The deadline for making declarations is usually five days after any damage is noticed. This is especially important for second home owners, who may not be at the property when the damage occurs. 

In some cases – such as in the aftermath of Storm Ciaran – insurers may extend the reporting period. But under normal circumstances, it’s five days after the damage has been discovered.

What happens next

To make a claim, the first thing to do is contact your insurer by phone or email. Your insurer will take you through the next steps, but usually you have to send in a declaration – which should include an estimate of any losses and for any repairs, with evidence where possible, such as photographs and any receipts for purchases. 

Your insurer may also request proof of wind intensity, which can be provided for example by a nearby weather station.

The insurance company may appoint an expert to come and assess the damage, so make sure to keep damaged property safe until they arrive, as well as all invoices for any urgent repair work. 

What if you’re a tenant?

If you rent your property, you must report any damage inside the accommodation to your insurer and also notify your landlord so that they can file their own claim. 

In the case of a co-propriete, you must declare damage inside the accommodation to your insurer, while the trustee sends his own declaration to the collective insurance (which sometimes covers the private areas) .

How long does it take for claims to be settled?

Payment of the compensation provided for by the “storm guarantee” depends your home insurance contract. After the insurer has estimated the amount of damage, compensation is generally paid between 10 and 30 days following receipt of the insured’s agreement.

What if we got flooded?

In the case of flooding, you may have to wait for a natural disaster order to be issued. 

Catastrophe naturelle

The ‘state of natural disaster’ is a special procedure that was set up in 1982 so victims of exceptional natural events, such as storms, heavy rain, mudslides and flooding, as well as drought, can be adequately compensated for damage to property.

The government evaluates each area and deems whether it qualifies for the status of catastrophe naturelle (natural disaster). 

Essentially once a zone is declared a natural disaster, victims can claim from a pot of funds created by all insurers. If the zone is not declared a disaster, insurance companies are under no obligation to pay out. 

Under a “state of natural disaster” residents are covered for all those goods and property that are directly damaged by the phenomenon, in this case storms.

It applies to residential or commercial buildings, furniture, vehicles and work equipment that are already covered by insurance policies.

Homes must be already covered by a multi-risk insurance policy for the status of natural disaster to count.

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