Munich Re started into 2016 with a quarterly profit of €436m (same period last year: €790m).
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It is now aiming for a profit of €2.3bn for the full financial year; until now, its forecast had been in the range of €2.3–2.8bn.
The operating result of €726m was below the figure for the same quarter last year (€995m).
The amount posted under "other non-operating result" was down by €88m to –€82m (6m), mainly due to foreign-exchange effects. Taxes on income totalled €157m (151m).
Despite share buy-backs amounting to €235m and negative currency translation effects of €660m, equity rose by 2.7% to €31,794m (30,966m), mainly due to on-balance-sheet net unrealised gains on investments.
The annualised return on risk-adjusted capital (RORAC) amounted to 7.3%. The return on the increased overall equity (RoE) totalled 5.6%. Gross premiums written declined by 4.0% to €12,511m (13,038m).
If exchange rates had remained the same, premium volume would have fallen by 2.0% year on year.
The reinsurance field of business contributed €445m (668m) to the consolidated result. The operating result was down by €243m to €514m. Gross premiums written decreased by 3.9% to €6,733m (7,009m).
Life reinsurance accounted for €20m (70m) of the consolidated result, and was thus below expectations. While claims experience was very satisfying overall, the result was nevertheless impacted by individual losses involving higher sums insured.
Property-casualty reinsurance contributed €425m (598m) to the result for the first three months of the year. The combined ratio amounted to 88.4% (92.3%) of net earned premiums – a significant improvement on Munich Re's target of around 98%.
As claims notifications for "basic losses" from prior years remained appreciably below the expected level overall, Munich Re was able to release reserves in the amount of around €250m, corresponding to 6.0 percentage points of the combined ratio.
Munich Re is also continuing to aim to set the amount of provisions for newly emerging claims at the very top end of the estimation range, so that profits from the release of a portion of these reserves are possible at a later stage.
In the first quarter, overall loss expenditure for major losses was randomly below average, totalling –€100m (–255m).
Natural catastrophe losses amounted to around +€11m (–66m) and man-made major losses to –€111m (–189m), representing –0.3% and 2.7% of net earned premiums respectively.
The largest man-made loss – a fire in a hydroelectric power station – came to €37m. ■