Cyclone Debbie not enough to rock Munich Re’s profits

Cyclone Debbie not enough to rock Munich Re’s profits | Insurance Business

Cyclone Debbie not enough to rock Munich Re’s profits
Munich Re has affirmed that it remains on track to meet its profit target for the full year, as it posted a €557 million profit in the first quarter, despite a significant increase in major losses, including from Cyclone Debbie in Australia and New Zealand.

The figure was up from €436 million in the same period in the previous year - a “gratifying quarterly result” the German reinsurance giant said was largely due to good investments. The company also reported an increase in its operating result year-on-year, from €726 million to €952 million.

Contributing to the company’s consolidated result was the Group’s reinsurance division at €466 million; while ERGO, Munich’s primary insurance business, generated €91 million, up from a €12 million net loss last year. This was despite the fact that the first three months of the year saw Cyclone Debbie cause Munich Re its largest single loss at €100 million.

Overall, the company saw €403 million of major-loss expenditure - €156 million of which was from natural catastrophe losses, and another €247 million from man-made losses. The figure was a significant 9.6% increase year-on-year, but still below Munich Re’s projection of 12% of net earned premiums.

Compensating for the payouts was Munich Re’s investment portfolio, with a carrying amount of €220,546 million, which has yielded a profit of €2,151 million, up 36.8% over January to March last year.

The Group continues to expect gross premiums written of €48-50 billion for the 2017 financial year, and a consolidated result for the year in the range of €2.0-2.4 billion.

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