Munich Re Expects $3.26B-Plus Group Profit For '09

He added that, "If the rest of the financial year 2009 goes so well, we may even reach our ambitious RORAC [return on risk-adjusted capital] target of 15 percent after tax."

The investment result for the first three quarters of 2009 rose to EUR5.8 billion [$8.59 billion], or 47.5 percent compared with the previous year. This represents a return on investment of 4.3 percent, the company said.

Mr. Schneider highlighted the increase in shareholders' equity to EUR22.8 [$33.75 billion], compared to EUR21.3 billion [$31.53 billion] on June 30.

Munich Re said its share buy-back program announced in early October is well on track. By the end of October, shares with a total value of around EUR176 million [$260 million] had been repurchased; the target is EUR1 billion [$1.45 billion] by the next Annual General Meeting April 28, 2010.

The reinsurer is using this instrument to return unneeded capital to shareholders: since November 2006, Munich Re has carried out share buy-backs with a total volume of EUR4 billion [$5.92 billion], including EUR1 billion [$1.45 billion] in 2006-07.

As part of its Changing Gear program in May 2007, it had announced share buy-backs of more than EUR5 billion [$7.40]. Of this amount, share buy-backs totaling EUR3 billion have already been completed: EUR2 billion [$2.96 billion] in 2007-08 and EUR1 billion [$1.45 billion] in 2008-09.

In the first nine months, the Group reported an operating result of EUR3.318 billion [$4.90 billion] compared to EUR2.65 billion [$3.92 billion] for the period from January to September–EUR1.21 billion [$1.79 billion] of this in the third quarter.

Shareholders' equity increased to EUR22.8 billion [$33.76 billion] or 7.3 percent since the beginning of year. The RORAC for the first three quarters amounted to 14 percent and the annualized return on equity (ROE) to 11 percent.

Gross premiums written rose by 10.4 percent to EUR31.0 billion [$45.8 billion] compared to EUR28.1 billion [$41.6 billion] for the same period last year. If exchange rates had remained the same, premium volume would have increased by 9.9 percent compared with the same period last year, Munich Re said.

The firm said its reinsurance business managed a quarterly profit of EUR562 million [$831.94 million]. The combined ratio was 96.3 for the first three quarters compared with 100.1 for the period last year and 93.4 for the third quarter compared with 101.2 in 2008.

Claims costs for natural catastrophe losses were low at only EUR27 million [$39.97 million].

The treaty renewals in property-casualty reinsurance at July 1, (mainly in the United States, Australia and Latin America, plus some global clients) saw a price increase of 4.4 percent, the reinsurer reported.

Torsten Jeworrek, Munich Re's reinsurance chief executive officer, stressed: "This September in Monte Carlo, we presented our sharpened value proposition. Traditional reinsurance is our core business and will remain so. At the same time, we aim to expand our client base and make even better use of our risk expertise to tap profitable new business segments."

For the current financial year 2009, Munich Re said it expects gross premiums written in its primary insurance and reinsurance business (total consolidated premium) to be between EUR40 billion [$59.21 billion] and EUR42 billion [$62.17 billion].