Munich Re Reports Profit Despite CAT Losses

Despite heavy U.S. losses from recent natural catastrophes, Munich Re reported third quarter profits were up 33 percent on the strength of investment results.

For the third quarter Munich Re reported net income rose Euro EUR127 million ($149 million) going from EUR386 million ($455 million) to EUR513 million ($604 million).

Net written premiums dropped more than 1 percent or EUR127 million ($149 million), from EUR9.1 billion ($10.7 billion) to EUR8.9 billion ($10.5 billion).

Investment in the quarter rose 85 percent or EUR1.4 billion ($1.7 billion), from EUR1.7 billion ($2 billion) to EUR3.1 billion ($3.6 billion).

For the nine months, however, net income was down 12 percent, or EUR195 million ($230 million), going from EUR1.6 billion to EUR1.4 billion. Net earned premium was down 1.5 percent, or EUR412 million ($485 million) going from EUR27 billion ($32 billion) to EUR27 billion ($32 billion).

Responding to the results, Jorg Schneider, member of the board of management said in a statement, "In view of the excellent investment result in prospect and the generally good performance of our underwriting business, we should reach our annual target of a 12 percent return on equity after tax.

"The precondition for this is that there are no more completely exception major losses in the last seven weeks of the year and that the capital markets continue to develop normally."