In the second quarter of 2016, Munich Re posted a consolidated profit of €974m (same period last year: €1,075m).
Article continues below
eak]
The profit for the first half-year amounted to €1,411m (1,866m). The high quarterly result was achieved despite expenses from major losses and planned investments as part of the ERGO Strategy Programme.
Munich Re also successfully withstood the capital market turbulence in the wake of the Brexit referendum.
In the second quarter, the operating result of €1,463m was below the figure for the same quarter last year (€1,818m). The amount posted under "other non-operating result" showed an increase of €313m to –€120m (–432m), mainly due to positive foreign-exchange effects. Taxes on income totalled €302m (251m). Despite the dividend payment and share buy-backs, equity increased to €32.0bn in the second quarter.
The annualised return on risk-adjusted capital (RORAC) in the first six months amounted to 11.9%, and the return on overall equity (RoE) totalled 8.9%.
Between the annual general meeting at the end of April and the end of July, shares with a volume of around €220m were repurchased as part of the share buy-back programme announced in March.
Gross premiums written decreased by 4.3% to €11,928m (12,467m) in the second quarter. If exchange rates had remained the same, premium volume would have fallen by 1.4% year on year.
In reinsurance business, the operating result came to €1,009m (1,436m) for the second quarter.
The reinsurance field of business accounted for €992m (842m) of the consolidated result for the second quarter.
This high quarterly result was mainly due to currency gains generated by Munich Re in deviating moderately from the principle of matching liabilities with investments in the same currencies – for example, through slight overcoverage in yen and US dollars, and undercoverage in British pounds.
For the period from January to June, reinsurance business contributed €1,438m (1,510m) to the consolidated result.
The technical result in life reinsurance improved in the second quarter, and was in line with expectations at €103m (31m).
The operating result for the ERGO field of business increased to €445m (358m) from April to June, but the consolidated result fell to –€34m (215m) during the same period.
For the period from January to June, ERGO generated a loss of €59m (317m), which includes restructuring expenses of around €400m gross (around €160m net) for the ERGO Strategy Programme. ■