(Bloomberg) -- Munich Re, the world’s biggest reinsurer, raisedits full-year profit target after net income beat analyst estimateson lower catastrophe claims. The shares rose.

Net income rose to 1.07 billion euros ($1.17 billion) in thesecond quarter from 758 million euros a year earlier, theMunich-based company said on Thursday. That exceeded the 819.6million-euro average of seven estimates compiled by Bloomberg.

Munich Re raised its full-year profit target to at least 3billion euros from a range of 2.5 billion euros to 3 billion euros.That compares with 3.2 billion euros in 2014.

Reinsurers are benefiting from lower claims for naturalcatastrophes, with earnings squeezed by falling prices andrecord-low interest rates. Expenditure for major catastrophelosses, man-made and natural, fell to 207 million euros in thequarter from 617 million euros a year earlier, Munich Re said.

“An increase in guidance is always pleasing,” said PeterCasanova, an analyst at Kepler Cheuvreux with a hold rating onMunich Re shares. “Their comments on renewals were also positivegiven that the declines were less severe compared to last year andthe pressure on the industry seems to be easing.”

Shares rise

The shares rose as much as 3.3 percent, the biggest intradaygain since April 2014. They were up 2.8 percent at 175.50 euros asof 10:08 a.m. in Frankfurt, extending their increase this year to5.9 percent. The Bloomberg Europe 500 Insurance Index gained 15percent over that period.

Munich Re cut prices by 2.1 percent on 2.3 billion euros oftreaty business last month after a 3.6 percent decline a yearearlier, the company said in the statement.

The insurer said in the statement that “pressure on prices,terms and conditions remained high, in particular for naturalcatastrophe covers.”

“There were relatively few disasters in the quarter, soexpectations have been running quite high for the earnings,” saidChristian Hamann, an analyst at Hamburger Sparkasse, who recommendsinvestors buy Munich Re shares. “The environment is still toughgiven the low interest rates and the mass of capital which ispushing into this business and depressing prices.”

Investment income rose 6.5 percent to 2.5 billion euros in thequarter from a year earlier. Losses on derivatives narrowed to 133million euros from 706 million euros in the first quarter asequity-based contracts increased in value with rising share prices,according to the company.

Munich Re said the share of fixed-income securities and loansmade up 88 percent of its holdings at market value.

Swiss Re, Europe’s second-biggest reinsurer, last week reportedsecond-quarter earnings that rose less than analysts forecast afterprices declined.

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