Munich Re boss confident of €2bn profit in 2010 despite early losses
jonathan swift Postonline
Munich Re recorded a good operating result of €4721m (€3834m) in 2009, €1400m of this in the fourth quarter.
Despite the share buy-back, equity rose to €22.3bn or by 5.5% over the course of the year. Return on risk-adjusted capital after tax amounted to 15.1% for 2009, and return on equity to 11.8%.
Gross premiums written rose by 9.5% to €41.4bn (€37.8bn). If exchange rates had remained the same, premium volume would have increased by 9.9% compared with the previous year, the reinsurer added.
The primary insurance operating result totalled €926m (€991m), of which €417m (€164m) derived from the fourth quarter.
Before elimination of intra-Group transactions across segments, the consolidated result amounted to €375m (€156m), with the fourth quarter contributing €280m (-€218m). The ERGO Insurance Group posted an improved consolidated result of €173m (€73m).
The 2009 combined ratio for the property-casualty segment (including legal expenses insurance) amounted to 93.1% (90.9%). Its level in the fourth quarter was at 90.0% (93.8%).
Total premium income across all lines showed growth of 5.3% in 2009, amounting to €19.1bn (18.1bn), with €4.9bn (€4.7bn) in the fourth quarter. As in 2008, ERGO grew mainly in international business.
Munich Re's reinsurance arm recorded an operating result of €4164m (€3822m), an increase of 8.9%, with €1169m coming from the fourth quarter.
Reinsurance contributed €2555m (€2400m) to the group's overall profit, the fourth quarter producing €699m (€358m) of this. In the previous year, the investment result and the profit had included ERGO's intra-Group dividend payment of €947m.
The combined ratio for 2009 came to 95.3% (99.4%), with natural catastrophes accounting for only 1.4 (6.2) percentage points in the period from January to December and -2.1 (2.0) percentage points between October and December.
The bush fires that struck South east Australia at the beginning of February 2009 were the largest loss event, costing Munich Re a total of €97m. Claims burdens from credit and surety reinsurance business amounted to €510m for the year as a whole.
Gross premiums written were up 13.5% compared with the previous year, rising to €24.8bn (€21.9bn). The life and health segment accounted for €9.7bn (€7.1bn), and property-casualty for €15.1bn (€14.7bn).
Nikolaus von Bomhard, chairman of the board of management, said: "We have brought the financial year 2009 to a successful close: with a profit of over €2.5bn, we were even able to surpass expectations and achieve our long-term return target despite the difficult environment."
With regard to the financial year 2010, Mr von Bomhard emphasised: "We are again aiming for a consolidated result of over €2bn."
He said that this target remained achievable in spite of the claims burdens from the earthquake in Chile and Winter Storm Xynthia. For 2011, Munich Re anticipates an increase in results.
Munich Re recorded a good operating result of €4721m (€3834m) in 2009, €1400m of this in the fourth quarter.
Despite the share buy-back, equity rose to €22.3bn or by 5.5% over the course of the year. Return on risk-adjusted capital after tax amounted to 15.1% for 2009, and return on equity to 11.8%.
Gross premiums written rose by 9.5% to €41.4bn (€37.8bn). If exchange rates had remained the same, premium volume would have increased by 9.9% compared with the previous year, the reinsurer added.
The primary insurance operating result totalled €926m (€991m), of which €417m (€164m) derived from the fourth quarter.
Before elimination of intra-Group transactions across segments, the consolidated result amounted to €375m (€156m), with the fourth quarter contributing €280m (-€218m). The ERGO Insurance Group posted an improved consolidated result of €173m (€73m).
The 2009 combined ratio for the property-casualty segment (including legal expenses insurance) amounted to 93.1% (90.9%). Its level in the fourth quarter was at 90.0% (93.8%).
Total premium income across all lines showed growth of 5.3% in 2009, amounting to €19.1bn (18.1bn), with €4.9bn (€4.7bn) in the fourth quarter. As in 2008, ERGO grew mainly in international business.
Munich Re's reinsurance arm recorded an operating result of €4164m (€3822m), an increase of 8.9%, with €1169m coming from the fourth quarter.
Reinsurance contributed €2555m (€2400m) to the group's overall profit, the fourth quarter producing €699m (€358m) of this. In the previous year, the investment result and the profit had included ERGO's intra-Group dividend payment of €947m.
The combined ratio for 2009 came to 95.3% (99.4%), with natural catastrophes accounting for only 1.4 (6.2) percentage points in the period from January to December and -2.1 (2.0) percentage points between October and December.
The bush fires that struck South east Australia at the beginning of February 2009 were the largest loss event, costing Munich Re a total of €97m. Claims burdens from credit and surety reinsurance business amounted to €510m for the year as a whole.
Gross premiums written were up 13.5% compared with the previous year, rising to €24.8bn (€21.9bn). The life and health segment accounted for €9.7bn (€7.1bn), and property-casualty for €15.1bn (€14.7bn).
Nikolaus von Bomhard, chairman of the board of management, said: "We have brought the financial year 2009 to a successful close: with a profit of over €2.5bn, we were even able to surpass expectations and achieve our long-term return target despite the difficult environment."
With regard to the financial year 2010, Mr von Bomhard emphasised: "We are again aiming for a consolidated result of over €2bn."
He said that this target remained achievable in spite of the claims burdens from the earthquake in Chile and Winter Storm Xynthia. For 2011, Munich Re anticipates an increase in results.
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