For full-year 2004, Munich Re reported $2.45 billion in net profit, in contrast to a loss of $578 million in 2003.

The company's reinsurance business combined ratio deteriorated slightly, rising for the year to 98.9 percent from 96.7 percent. However, Munich Re said this was the result of some costly natural disasters, with the Asian tsunami last December costing the reinsurer $134 million.

Last year, Caribbean hurricanes and Pacific typhoons also caused losses of $820 million, according to the reinsurer. Discipline "and selective underwriting paid off" to minimize the change in combined ratio, the firm said.

Munich Re said its primary insurance business booked $349 million in profit with 93 percent in primary insurance for 2004, reversing from a loss one year ago.

"I am more than satisfied with the result of this mixed year. We are well on the way to achieving sustained profitability and thus regaining our former strength," stated Munich Re Chairman of the Board of Management Nikolaus von Bomhard.

Mr. Bomhard forecast Munich Re earnings in 2005 will rise at least 9 percent as the company resists client pressure to lower prices and boosts profit at its primary insurance unit. He added that net income in 2005 will be clearly more than $2.7 billion.

Standard & Poor's Ratings Services, which has "A-plus" ratings with a "Stable" outlook for Munich Re, said the company's 2004 results "were in line with expectations and consequently have no immediate impact on the ratings or outlook on group entities."

A.M. Best Co. said its Munich Re ratings are unaffected following Munich Re's earnings announcement. The firm stated: "Munich Re is benefiting from a relatively stable pricing environment in nonlife reinsurance as evidenced at the January 2005 renewals."