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In a statement released Monday, Munich Re, the world’s largest reinsurer, reported across the board gains for the first quarter with operating profits reaching £700 million ($645.5 million).
The giant insurer actually posted an overall profit of £4.5 billion ($4.15 billion) for the quarter as it concluded an asset swap with Allianz. It reported overall growth in gross premiums written of 20.5 percent with the reinsurance group posting a 37.8 percent gain to £ 6.9 billion ($6.36 billion) compared with £5 billion ($4.61 billion) in the first quarter of 2001.
Gross premiums written by Munich Re’s primary insurance operations, notably Ergo, rose by 7.2 percent to £4.6 billion ($4.24 billion) compared to £4.3 billion ($3.96 billion) in the same period last year.
The company also brought its combined ratio down to a remarkable 101.7 percent. It had gone as high as 135 percent following the Sept. 11 attacks which hit Munich Re for around $2 billion.
Dr. Hans-Jürgen Schinzler, Chairman of Munich Re’s Board of Management, stated at the Group’s balance sheet press conference that “The international insurance industry will not quickly shrug off or forget the terrible year 2001.” He ran through a litany of woes in addition to the WTC attacks -late-reported claims with weak stock markets and low interest rates worldwide – which all in all reduced the company’s net profit in 2001 to £ 250 million ($230.5 million), compared to the £1.75 billion ($1.61 billion) it earned in 2000.
“In the current year, with projected premium income of approximately £39bn [$35.96 billion], the Group is aiming to surpass its very good result for 2000,” Schinzler continued. “An additional positive factor will be income of £4.5bn [$4.15 billion] from the sale of shareholdings as part of the restructuring agreed with Allianz in the last two years.”
Commenting on his expectations for this year Schinzler indicated that, “”Munich Re is optimistic because:
– purchasers and providers of insurance cover have at last become aware of the new risk dimensions;
– risk carriers are being chosen more than ever on the basis of their financial strength;
– the trend towards risk-adequate prices and conditions in reinsurance intensified appreciably in the most recent treaty renewals.
The announcement concluded that “”After the poor business year 2001, the Group’s prospects for the current year 2002 are much better. In reinsurance, it expects strong premium growth and – following the appreciable reduction in the combined ratio in the first quarter – a very marked improvement in its result. This will be bolstered by the high profits from the reorganization of shareholdings with Allianz. Altogether, the Group is aiming to surpass its excellent result for the year 2000 after one-off effects have been eliminated.”