NU Online News Service, April 25, 11:25 a.m. EDT
Munich Re says it expects its first quarter natural disaster catastrophe claims loss to total €2.7 billion (U.S. $3.9 billion at the current exchange rate).
Last week, the Munich, Germany-based reinsurer reiterated that because of the loss estimate, it would not be able to maintain its earnings guidance for financial year 2011 of €2.4 billion ($3.5 billion).
The total claims loss estimate is after retrocession and before tax, Munich Re says.
Japan losses from the Tsunami and Earthquake are estimated at €1.5 billion ($2.2 billion). In addition, natural catastrophes in Australia and New Zealand are expected to be at €1.1 billion ($1.6 billion).
"The losses from natural catastrophes mean that the result for the first quarter will be clearly negative," says Nikolaus von Bomhard, the company's chief executive office in a statement.
As it outlined the expected impact of first quarter catastrophe losses on the company, shareholders approved a 50 cent Euro increase in the dividend, from €5.75 a share ($8.37) to €6.25 a share.
Due to the first quarter losses, the company says it has delayed plans to buy back €500 million shares ($727 million) of its shares "for the time being."
The company says that figures were not yet available for the treaty renewals for April 1 renewals because some Japanese clients requested that their earthquake treaties be held at existing terms and conditions "for a few weeks" following the nation's disaster "in view of ongoing claims assessment."
"That is one of the reasons why it is not possible to make any conclusive statements about the development of terms and conditions," von Bomhard says. "At any rate, we expect general price increases in the current financial year."
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