Munich Re reports third quarter profit of 738 million euros

Munich Re has posted a consolidated profit of 2.4 billion euros for the first nine months of the year, up from 2.1 billion euros in the same period of 2013, leading the reinsurance giant to possibly exceed its profit guidance of 3 billion euros for 2014.

For the third quarter of the year (ended Sept. 30), the group reported a profit of 738 million euros, up from 630 million euros in the same quarter last year.

In the third quarter, the operating result of 910 million euros was below the 1.056 billion euros for the same quarter last year.

Gross premiums written decreased in the third quarter by 3.6% to 12.1 billion euros (from 12.5 billion euros). If exchange rates had remained the same, premium volume would have fallen by 3.0% year over year, the company noted.

In its reinsurance business, the operating result for the third quarter was 598 million euros, down from 845 million euros in the prior year quarter.

The reinsurance segment accounted for 533 million euros of the group consolidated result for the third quarter ( compared with 511 million euros in 2013). For the first nine months, the reinsurance business generated a result of 1.93 billion euros, up from 1.7 billion euros in the same period last year.

Gross premiums written in the third quarter in reinsurance decreased by 2.3% year over year to 6.7 billion (from 6.9 billion euros). If exchange rates had remained the same, premium volume would have fallen by 1.7%, Munich Re said.

The combined ratio in property and casualty reinsurance was 91.3% of net earned premiums for the third quarter (94.3% in 2013), and 93.2% for the first nine months (93.1% in 2013).

Expenditure for natural catastrophes in the third quarter was “well below Munich Re’s expectations” at 100 million euros, compared with 306 million euros in the same period of 2013.

In primary insurance, the operating result for the third quarter was 251 million euros, up from 170 million euros a year ago, while the consolidated result for the third quarter came to 155 million euros (94 million euros in 2013).

“At 95.8% of net earned premiums, the combined ratio in property-casualty insurance in the third quarter was considerably better than in the same period last year (99.2%),” Munich Re noted.

For the first three quarters, the combined ratio was 95.6% (97.1% in 2013). In the third quarter, the combined ratio in international property and casualty insurance worsened to 100% (from 97.2% a year ago), while in the German business, it amounted to 93.2% for the same period, compared with 100.4% in 2013.

For 2014, Munich Re now projects that its gross premiums written will be around 48 billion euros.