Tuesday August 4, 07:52 AM
German reinsurer Munich Re posts jump in net profit
FRANKFURT (AFP) - Munich Re, the world's biggest reinsurance company, posted on Tuesday a better than expected second quarter net profit and said it had suffered limited effects from the global economic crisis.
The group reported a 14 percent rise in net profit to 691 million euros (995 million dollars), from 606 million in the same period one year earlier.
The group, which benefitted from increases in life and health reinsurance, also raised slightly its full-year target for gross premiums, the sector benchmark on which it bases its annual forecasts.
Analysts polled by Dow Jones Newswires had expected net profit to remain stable at around 606 million euros.
Munich Re chairman Nikolaus von Bomhard said in a statement that "we were able to benefit further from our capital strength and exploit our scope for profitable growth.
"We regard the effects of the economic crisis as limited in extent for the Munich Re Group."
Gross premiums gained 14.6 percent to 10.326 billion euros, better than an analyst forecast for 9.8 billion, while the group's operating profit jumped by 26.2 percent to 1.373 billion euros.
Looking ahead, the group said it expected gross premiums in both primary insurance and reinsurance to range between 40-42 billion euros up from a previous forecast of 39-41 billion.
But it warned that "uncertainties resulting from the economic crisis continue to apply to both underwriting business and investments, making a forecast for the 2009 annual result particularly difficult."
For the first half of 2009, the group posted a net profit of 1.1 billion euros, a substantial drop of 19.4 percent from the first six months of 2008.
Munich Re got a second-quarter boost from its new US acquisition, the Hartford Steam Boiler Group, which contributed 173 million euros in gross premium income, the statement said.
It decreased the value of its assets by relatively modest 125 million euros, noting that in the second quarter of 2008 it "had had to absorb substantial write-downs on its equity portfolio" of 660 million euros.
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