Sound recovery for Munich Re

German reinsurer Munich Re said on Thursday it reckoned with satisfactory earnings for the first quarter of 2012. "Although the picture is not yet complete, the data we have show that the volume of major losses remained far below last year's level," Chief Executive Nikolaus von Bomhard told shareholders at the company's annual general meeting.

Munich Re announced it expected Q1 net profit to have reached 750 million euros ($991 million). Von Bomhard added he was optimistic for the rest of the year and confirmed the group's profit target of around 2.5 billion euros throughout 2012.

In the first quarter of last year the world's biggest reinsurer booked a loss of 947 million euros. The result came in the wake of devastating earthquakes in Japan and New Zealand and trail-cutting storms in Australia that cost Munich Re 4.5 billion euros. And yet it managed to end last year with a net profit of 712 million euros.

"It's very impressive that Munich Re did not end 2011 in the red despite one catastrophe after the other," Daniela Bergholdt, of the German Association of Private Shareholders (DSW), said in a statement.

Subsidiary in firing line

Shareholders were also pleased with the prospect of securing 1.1 billion euros in dividends once again. The firm's most important single shareholder is US investor Warren Buffet.

Munich Re's annual meeting triggered a lot of criticism of the company's subsidiary Ergo, an insurer that had produced negative headlines in the past through lavish sex parties among managers and deliberately misleading advising.

Munich Re Chief Executive Nikolaus von Bomhard once again apologized for the misconduct of his former colleagues, adding that the behavior of those managers had been completely unacceptable.

hg/sgb (dpa, AFP)