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Profitable German reinsurers

May 7, 2013

A decline in claims from disaster-related damage has seen German reinsurers starting 2013 with decent profits. Earnings were solid despite historically low yields on capital deposits.

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Munich Re logo Foto: Tobias Hase dpa/lby +++(c) dpa - Bildfunk+++
Image: dapd

The world's largest reinsurer, Munich Re of Germany, reported Tuesday it logged a net profit of 979 million euros ($1.3 billion) in the first quarter.

"The first three months of 2013 went very well for us group-wide," the company said in a statement. The result for the period from January to March marked a 25.2-percent jump in earnings year-on-year.

Chief Financial Officer Jörg Schneider said the marked improvement was due to lower claims burdens from major losses and robust operating profit.

2011 - Katastrophenjahr für Versicherungen # 13.07.2011 10 Uhr # Journal Englisch

"After this good start, we're optimistic about achieving our profit target for the whole year of close to 3 billion euros," Schneider commented.

Positive outlook

Munich Re's CEO, Nikolaus von Bomhard, already indicated at a shareholder meeting in late April that the reinsurer would post excellent profit despite low gains from very low interest yields on global financial markets.

The world leader's German rival, Hannover Re, announced a net profit of 221 million euros for the first quarter. Although this meant a 15-percent drop in earnings year-on-year, the result was above most analysts' expectations.

CEO Ulrich Wallin said he was pleased with the result for the first three months and added it was "a first successful step" towards securing the envisaged full-year profit of 800 million euros.

hg/mz (AFP, dpa, Reuters)