Munich Re reports strong quarter, raises 2010 target
Leading reinsurance group Munich Re reported strong quarterly results on Tuesday and raised its forecast for net profit for the year to 2.4 billion euros.
But it warned that it might not be able to maintain this performance next year.
In the third quarter the giant insurance firm, which takes on part of the risks underwritten by front-line insurers, made a net profit of 764 million euros, an increase of 19.0 percent from the equivalent figure last year.
This was well above the figure forecast by analysts polled by Dow Jones Newswires who had expected 612 million euros.
Until now, the company had forecast that profits for the whole of 2010 would exceed 2.0 billion euros (3.3 billion dollars), but these results led it to raise that target to 2.4 billion euros.
The target for gross premium income, the equivalent of sales for an insurance company, was held at 44.0-46.0 billion euros.
Munich Re manages a big portfolio of investments in addition to managing direct reinsurance. This portfolio comprises mainly fixed-interest instruments. Only 2.6 percent of the investments are in shares.
Since the group expects rates and bond yields to stay low next year, it sees interest income possibly falling and affecting the overall net profit figure for 2011.
The company said that the outcome next year could be slightly below the figure this year, on the basis that 2011 would be an average year in terms of insurance claims for damage and that insurance premiums were little changed.
© 2010 AFP