Canadian Underwriter

Munich Re reports increased profit for Q3, raises profit forecast for 2012

November 7, 2012   by Canadian Underwriter

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Global reinsurer Munich Re has posted a consolidated profit of €1.1 billion for the third quarter of 2012, a rise from the  €290 million it reported for the same period last year.

The company has also raised its profit forecast for the year to about  €3 billion. On Nov. 7, €1 was equal to about C$1.27.

Gross premiums written rose to €39.1bn for the nine months ended Sept. 30, with €13.2bn attributable to the third quarter.

The company’s combined ratio for its primary property and casualty insurance business was 96.9% for the first nine months of the year. Its reinsurance combined ratio totalled 93.6% of net earned premiums compared with 118.1% for the same period last year.

“Despite Hurricane Sandy, we are very optimistic of realising a profit in the region of €3 billion for 2012,” the company’s CEO Jörg Schneider said in a statement on the results.

Despite relatively low catastrophe losses throughout the year, Sandy will still have an impact on the company. “The high number of individual losses and the vast extent of the storm make loss estimation very difficult,” Schneider explained.

“Based on a provisional estimate characterised by a high degree of uncertainty, we anticipate Munich Re’s share of the losses to be in the mid three-digit million euro range.”

At the beginning of 2012, Munich Re had estimated a profit of around €2.5 billion for the year, but indicated in August (at its half-year results) that there was the prospect of slightly surpassing that.

Munich Re is now looking at a consolidated profit of around €3bn for the year as a whole, providing no major losses from natural catastrophes occur.

“Our forward-looking risk management, prudent investment policy and profit-oriented underwriting approach are proving particularly effective in this difficult macroeconomic climate,” Schneider noted.