Muenchener Rueckversicherungs Gesellschaft AG in Muenchen Q3 2020 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kamran Hossain - RBC Capital Markets, Research Division - Analyst : The first question is just on, I guess, total COVID reserves. I guess your kind of 85% IBNR in P&C. At this stage, is that kind of a relatively -- are you surprised about kind of how few case reserves or how many clients kinds of advise you of losses at this stage? Or is that normal? I'm just trying to work out if we've got normal Munich Re conservatism, kind of plus 4% reserve release on top of that? Or you've got Munich Re plus, given this huge range of uncertainty? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 05, 2020 / 10:00AM, MUVGn.DE - Q3 2020 Muenchener Rueckversicherungs Gesellschaft AG in Muenchen Earnings Call And then the second question, coming back to kind of Vikram's point on quantifying some of the losses. I'm sure you have worked this number out, but if you assume that all events are canceled for this year for 2020 that have not already been counted, what does the number look like there? Is it smaller than Q3 or not? Christoph Jurecka - Mnnchener Rnckversicherungs-Gesellschaft Aktiengesellschaft in Mnnchen - CFO & Member Management Board Yes. Your first question, with the 85% IBNR, surprised the normal, I think that's a very subjective question. So I can only give you my personal thought. And I cannot guarantee that there's not other people having other expectations and would be surprised by other things than I am. But the way I personally look at it, I would have maybe expected some more notifications already coming in now after 3 quarters. So in that sense, yes, I'm a little bit surprised. If you look at the business, I mean in this 85% IBNR, we cover both primary as well as reinsurance because you know that out of the second reinsurance, we're also running by more business. And especially on the reinsurance part of the business, I would have expected more notifications to come in already. Primary, we are in closer contact with our clients anyway. But on the reinsurance side, so we talk to the primary insurers. I probably would have expected some more information or some more notifications already at this point in time. Can you -- your second question, was the exposure until year-end? I can only give you a structural answer. And the structural answer is that, for this year, as I said, we reserved for all the events. We are aware of already that they will be canceled this year. So structurally, that should cover a lot of events happening in Q4 already. On the other hand, in Q4, we'll have to make up our minds and look at the information we will be getting about events next year. And this might then also increase the necessity to set up reserves in Q4. So that's a twofold answer to your question. For this single year, I would expect less in the fourth quarter, but then there will be the need to set up reserves for 2021 already. And there, I would expect also a quite significant number.