Munich Re announced that its preliminary estimate of its consolidated results for 2010, “despite substantial losses,” is €2.43 billion [$3.35 billion], compared to €2.56 billion [$3.528 billion] in 2009. Profit for the fourth quarter totaled €480 million [$661.5 million], compared to €780 million [$1.075 billion for the same period in 2009.
CFO Jörg Schneider gave the following summary of the provisional figures: "Despite weighty major losses, which also affected us at the end of the year, we are presenting a good result. Our shareholders are to benefit without delay. With the proposed increase in the dividend to €6.25 [$8.61] per share and the continuation of our share buy-backs, we are maintaining our attractive dividend and capital repatriation policy.”
For 2011, Munich Re said it “expects a somewhat better technical result than in 2010 and a consolidated result of around the same level. Gross premiums written by the Group in the financial year 2010 rose significantly by almost 10 percent to €45.5 billion [$62.68 billion].”
The report also noted that based on preliminary figures the “ERGO Insurance Group, in which Munich Re has concentrated its primary insurance business, more than doubled its profit to €355 million [$489.3 million]” from €173 million [$238.4 million]last year.
Munich Re also explained that “natural hazard events, such as the long harsh winter extending well into spring and damage caused by floods, were responsible for considerably higher claims expenditure in 2010, especially in international business.”
Ergo’s combined ratio for the fourth quarter amounted to 100.4 percent, compared to 90.3 percent in Q4 2009. ERGO CEO Torsten Oletzky commented: “We invested a lot of effort in successfully launching the ERGO brand in the German insurance market. In the process, we managed to improve both our premium income and our result. I therefore regard 2010 as a good year for ERGO.”
Munich Re also noted that its “reinsurance business was marked by high claims costs for major losses in 2010. The reinsurance segment nevertheless contributed around €2.10 billion [$2.89 billion] to the consolidated result. Compared with the previous year, premium income grew by over 8 percent to €23.6 billion [$32.51 billion" compared to €21.8 billion [$30 billion], nearly €6 billion [$8.265 billion] of which came from the fourth quarter. Without currency translation effects, premium would have risen by 1.5 percent in 2010.”
The company’s reinsurance sector was also affected by the number of natural catastrophes, which occurred last year. Munich Re said its combined ratio in property-casualty reinsurance was 100.5 percent in 2010, compared to 95.3 percent in 2009.” It added that as a “consequence of the customary year-end review of reserves, the combined ratio includes a moderate reduction of claims provisions. The overall figure for the year contains 11.0 (1.4) percentage points for natural catastrophes, and the figure for the final three months 11.7 (–2.1) percentage points.”
Natural catastrophe losses amounted to around €1.56 billion [$2.15 billion] compared to €200 million in 2009 for the entire year. The largest loss event for Munich Re in 2010 was the devastating earthquake in Chile. For the earthquake in New Zealand, Munich Re is now reckoning with a claims burden of €340 million ($468.6 million].
Source: Munich Re