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Harvey, Irma could take bite out of Munich Re’s profits

Reinsurer will probably show loss in third quarter

Reinsurer Munich Re says it may not reach its profit goal for this year because of heavy damage from hurricanes Harvey and Irma.

Related: Hurricane Irma set records before striking Florida

The company said in a news release Thursday that it “might miss its profit guidance of 2 billion to 2.4 billion euros (US $2.4 billion to $2.8 billion) for the year.” It also said it would probably show a loss for the third quarter.

Related: Most Harvey flood victims uninsured, face big bills alone

Harvey caused heavy damage in Texas and neighbouring states in August and Irma left behind widespread destruction in the Caribbean and Florida.

The statement said that “these two events are expected to result in high insured losses, which the market and Munich Re are unable to quantify at the moment.”

Reinsurers provide backup insurance for primary insurers so the industry can handle catastrophic losses.