Disasters push Munich Re 2010 profit slightly lower

3rd February 2011, Comments 0 comments

German re-insurance giant Munich Re posted Thursday a 2010 net profit of 2.43 billion euros ($3.35 billion) despite heavy losses from natural disasters and promised shareholders an improved dividend.

The result represented a slide of five percent from the 2009 figure of 2.56 billion euros but was in line with an average analyst forecast of 2.46 billion compiled by Dow Jones Newswires.

Shares in the re-insurance group showed a slight gain in early trading.

Total losses from natural catastrophes last year amounted to roughly 1.56 billion euros, more than seven times the 2009 figure of 200 million euros, a statement said.

"Despite weighty major losses, which also affected us at the end of the year, we are presenting a good result," finance director Joerg Schneider was quoted as saying. "Our shareholders are to benefit without delay."

Munich Re's board will recommend an increased dividend of 6.25 euros per share, up from with 5.75 euros in 2009, he said.

The group also planned to buy back shares worth 500 million euros before its annual general meeting in 2012, the statement said.

Gross premiums written by the group last year gained almost 10 percent to 45.5 billion euros.

But the world's biggest re-insurance company in terms of gross premiums was hit like its rivals by a series of natural disasters in 2010, the largest of which for Munich Re was "the devastating earthquake in Chile," it said.

An earthquake in New Zealand and flooding in northeastern Australia lead to respective claims of 340 million euros and 270 million.

Looking ahead, Munich Re said only that in 2011, it "expects a somewhat better technical result than in 2010 and a consolidated result of around the same level."

Digging into the data, Munich Re's income from investments showed a gain of almost 10 percent last year to 8.6 billion euros.

And the ERGO insurance group, in which Munich Re has concentrated its primary insurance activities, reported a profit of 355 million euros, more than double the 2009 figure of 173 million euros.

Shares in the group edged 0.13 percent higher to 117.50 euros in opening trading on the Frankfurt stock exchange, while the DAX index of German blue-chips was flat overall.

© 2011 AFP

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