Munich Re Confirms 2011 Profit at $937 Mn; Forecasts $3.3 Bn in 2012

Munich Re’s official results largely confirm earlier estimates, made at the beginning of February. The world’s largest reinsurer, however, hopes to do a good deal better in 2012 than it did last year. It’s forecasting a profit of around €2.5 billion [$3.3 billion], compared to €712 million [$937 million] net group profit in 2011,”despite an extremely difficult environment.”

The earning bulletin stressed that “in the financial year 2011, the insurance industry faced an unprecedented cluster of severe natural catastrophes. At the same time, the financial crisis worsened, with interest-rate levels generally remaining low.”

CEO Nikolaus von Bomhard summed up the year 2011 for Munich Re: “In this exceptional situation, our integrated business strategy – combining primary insurance and reinsurance under one roof – proved its worth. We were able to conclude 2011 with a respectable annual result, a notable achievement and impressive testimony to the Group’s resilience. With our still robust capitalization and favorable earnings prospects, we will be able to propose an unchanged dividend of €6.25 [$8.225] a share at the Annual General Meeting.”

Von Bomhard expressed optimism for 2012, stating: “Particularly after major losses of the kind we experienced in the past financial year, risk awareness is heightened. Our global presence enables us to take specific advantage of business opportunities in attractive markets and segments.” He also noted that the January renewals had been satisfactory, and “provided a good start to the year.”

In addition, Munich Re said it “anticipated that demand for reinsurance solutions would continue to rise in the further course of the financial crisis and as a result of the introduction of Solvency II.”

The earnings bulletin summarized the result for 2011 as follows:
— Group operating result of €1.180 billion [$1.553 billion] (€3.978 billion [$5.237 billion] in 2010).
— Group equity increased to €23.3 billion [$30.66 billion].
— The return on risk-adjusted capital after tax (RORAC) amounted to 3.2 percent for 2011 (2010: 13.5 percent); return on equity (RoE) to 3.3 percent.
— Gross premiums written rose by almost 9 percent to €49.6 billion [$65.274 billion] (€45.5 billion [$59.878 billion] in 2010) due to strong organic growth, especially in the life and property-casualty reinsurance segments and Munich Health.

The full report, as well as additional and supplemental information and instructions for accessing the earnings conference call may be obtained on the company’s web site .

Source: Munich Re

Topics Trends Profit Loss Reinsurance