Munich Re said it sustained a 99 percent decrease in profit for the third quarter affected by the financial turmoil that has impacted earnings of the insurance industry.

The Munich, Germany-based insurer reported third-quarter profit dropped EUR1.2 billion (U.S. $1.53 billion at the current exchange rate) to EUR12 million ($15 million) from EUR1.22 billion ($1.55 billion).

The results were on net earned premiums of EUR8.86 billion ($11.3 billion), up EUR91 million ($116 million) from last year's quarter of EUR8.77 billion ($11.2 billion).

For the nine months, profit stood at EUR1.42 billion ($1.81 billion), down 58 percent, or EUR1.9 billion ($2.5 billion), to EUR3.35 billion ($4.27 billion).

Net earned premiums were down 1 percent, or EUR319 million ($406 million), to EUR26.1 billion ($33.3 billion) from EUR26.4 billion ($33.7 billion).

In a statement, Munich Chief Financial Officer J?rg Schneider said, "The 2008 financial year is proving difficult on account of the financial crisis, but the Munich Re Group is acquitting itself well compared with its competitors, thanks to its well-balanced investment portfolio."

Despite the company's performance, he cautioned the insurer would probably not reach EUR2 billion ($2.55 billion) annual profit.

The company said it sees good profitability in the current market, setting its sights on improving prices and conditions in reinsurance.

Mr. Schneider continued: "Not only has the significance of our financial strength increased appreciably in the financial market crisis; so, too, has the importance of expertise in risk assessment and risk management. These are core competencies of the Munich Re Group and will ensure that we emerge stronger from the current situation than other market players."

Standard & Poor's Ratings Service issued a statement saying that Munich Re's ratings were unaffected by the third quarter results.

"Given the extremely turbulent financial markets, which have so far hit most insures and reinsurers, Munich Re's results are well within our expectations," S&P said.

(This story was updated at 3:45 p.m. EST)

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