Munich Re says profits down in third quarter
Munich Re, the world's leading reinsurer, said on Tuesday that natural catastrophes, exchange-rate volatility and the eurozone debt crisis hit earnings in the third quarter.
Munich Re said in a statement its bottom-line net profit plunged by 62.6 percent to 286 million euros ($393 million) in the period from July to September, despite a 6.7-percent increase in gross premiums to 12.2 billion euros.
That was much lower than expected, with analysts polled by Dow Jones Newswires pencilling in a third-quarter profit of 542 million euros.
Taking the nine months to September, the drop in profits was even steeper with after-tax earnings slumping 96.2 percent to 75 million euros, while gross premiums grew by 9.1 percent to 37.2 billion euros.
"The difficult environment on the financial markets, currency translation effects and heavy burdens from natural catastrophes have all influenced" earnings in the nine months and third quarter, the statement said.
In view of this, chief financial officer Joerg Schneider said he was satisfied.
"Although our result was certainly affected by the capital-market and currency turbulence, our financial position has once again proved comparatively resilient," he said.
"The low combined ratio in reinsurance in the third quarter and the satisfactory underwriting results in insurance and reinsurance are indicators that our core business is doing well."
Negative currency effects cost Munich Re 342 million euros in the July-September period and the group said it also took a 230-million-euro charge on its holdings of Greek public debt.
Schneider said he was nevertheless optimistic with regard to the full-year outlook, even if he declined to make a concrete forecast.
"We still envisage a positive consolidated result for 2011 as a whole," he said.
"Munich Re will not be making a more concrete profit forecast than this because the final amount will be influenced considerably up to the last day of the year by the incidence of major losses and the volatility of the capital markets and exchange rates," he said.
© 2011 AFP