Despite a rough second quarter – consolidated profit of €543 million [$720 million], compared to €812 million [$1.077 billion] in Q2, 2012, Munich Re said it is “well on track to achieve its 2013 profit target.”
The world’s largest reinsurer posted first half-year profit of €1.5 billion [just under $2 billion]. “Performance in primary insurance and reinsurance was good as a whole, although the second quarter was marked by claims burdens of €230 million [$305 million] from the floods in Germany and neighboring countries and by above-average major losses,'” said the earnings announcement.
CEO Nikolaus von Bomhard said: “Unlike the first quarter of 2013, the second quarter was significantly affected by major losses. The business environment remains difficult, owing to the low interest rates. Against that background, the half-year result is very satisfactory.”
However, he also noted: “With this half-year profit, we are well on track to achieving our target of close to €3 billion [^4 billion].” According to the CEO, the very different claims experience in the first two quarters again showed “how careful one has to be in basing long-term result estimates on the basis of just one quarter.”
For the first half of 2013 Munich Re recorded an operating result of €1.982 billion [$2.630 billion], less than the €2.304 billion [$3.057 billion] for the first six months of 2012. The operating result for Q2 was €594 million [$788 million].
Operating results for the reinsurance sector during the period totaled €1.481 billion [$1.965 billion], compared to €1.702 billion [$2.258 billion] in Q2 2012, of which €361 million [$479 million] derived from the second quarter. Altogether, the reinsurance field of business accounted for €1.205 billion [$1.6 billion], compared to €1.293 billion [$1.716 billion] in 2012.
For the first six months of the year, the primary insurance field of business posted an operating result of €410 million [$544 million] (€550 million [$663 million] in 2012), of which €187 million [$248 million] was attributable to the second quarter. The consolidated result totaled €275 million [$365 million] with the second quarter contributing €148 million [$196 million].
The bulletin said: “ERGO’s profit was just below the previous year’s level at €236 million [$313 million],” slightly less than the €255 million [$338 million] in 2012, of which €116 million [$154 million] derived from the second quarter.
Munich Re said: “As loss reserves remain significantly above the level of losses reported, there were reserve releases of approximately €150 million [$200 million] in the second quarter. The combined ratio for the first half-year was 92.4 percent (95.7 percent) of net earned premiums. For the second quarter, the figure was 99.3 percent (96.9 percent).
“Given average claims experience, Munich Re still envisages a consolidated result of close to €3 billion for 2013.” Von Bomhard summed up the situation as follows: “We are still confident of being able to achieve our profit guidance for 2013.”
Source: Munich Re
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