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Earnings

Munich Re withdraws profit guidance due to coronavirus claims

FILE PHOTO: The logo of reinsurance company Munich Re Group is seen at the main building of their headquarters prior to the company's annual balance press conference in Munich, Germany, March 20, 2019. REUTERS/Andreas Gebert

FRANKFURT (Reuters) - Munich Re MUVGn.DE on Tuesday withdrew its profit guidance for the year, blaming heavy insurance claims triggered by the cancellation of large events which were banned as a way to stop the spread of the coronavirus.

Munich Re said claims made to its property-casualty reinsurance segment had caused it to anticipate profits in the low three-digit million euro range for the first three months of 2020.

Last year, the reinsurer posted first-quarter profits of 633 million euros.

As a result the company’s annual guidance will suffer.

“Munich Re will not attain its profit guidance of 2.8 billion euros ($3.08 billion) for 2020 as a whole,” the reinsurer said in a statement on Tuesday.

A share buyback programme slated for the 2020/2021 period will be discontinued until further notice, it said.

Even after the impact of capital-market and loss developments, Munich Re’s solvency ratio is still comfortably within the communicated optimal range of 175% to 220% of the requirement and the company plans to pay a dividend of 9.80 euros per share.

($1 = 0.9104 euros)

Reporting by Edward Taylor; Editing by Arno Schuetze and Ken Ferris

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