Investment Asset Sales Boost Munich Re Profit

NU Online News Service, May 10, 2:53 p.m. EDT--The world's largest reinsurer, Munich Re, saw its quarterly profit improve 27 percent, bolstered by the company's sale of investment assets, but underwriting results declined compared to year-ago figures.

The Munich, Germany-based concern reported 688 million euros ($883 million) for its 2005 first-quarter profit, up from 543 million euros ($697 million) last year.

Munich Re said its sale of stakes in German truck maker MAN AG and mortgage lender BHW Holding AG helped strengthen its quarterly investment result, which was up 32.5 percent to 2.457 billion euros ($3.15 billion).

Munich Re's underwriting results showed slight deteriorations across the board. Its total gross premiums written for the quarter were 10.7 billion euros ($13 billion), down 1.9 percent from 10.4 billion euros ($13.3 billion). Net earned premiums were 8.8 billion euros ($11.3 billion), down 2.6 percent. Premium income from property-casualty reinsurance operations fell 7.5 percent to 3.9 billion euros ($5 billion). Munich Re's non-life combined ratio was 96.5, weakening slightly from 96.3 last year.

Munich Re's chairman, Dr. Nikolaus von Bomhard, expressed satisfaction at the company's profit figures, noting that the reinsurance sector had "recorded higher claims costs for major losses in the first three months, including 70 million euros ($90 million) from the European winter storm Erwin and 35 million euros ($45 million) from the Madrid skyscraper fire."

Munich Re's income from its property-casualty primary insurance business also fell, down 6.3 percent to 1.8 billion euros ($2.3 billion), with the combined ratio deteriorating to 99.1 from 95.4.