Munich Re achieved a result of €392m in 2017 – thus attaining the adjusted "small profit" forecast it had projected for the year in the wake of the high losses resulting from Hurricanes Harvey, Irma, and Maria. According to provisional calculations, in the fourth quarter of 2017 it posted a profit of €538m (previous year: €486m).
The company said in a statement that, subject to approval by the supervisory board and annual general meeting, Munich Re will pay a dividend of €8.60 per share, as in the previous year.
The company's chief financial officer, Jörg Schneider, said, "Our dividend is reliable. Thanks to our capital strength, we were able to well withstand the high losses from natural catastrophes. In 2018, we will be pressing ahead with the digital transformation of Munich Re, and also seizing opportunities for profitable growth in traditional business. Reinsurance prices improved slightly in large sections of the market at the January renewals – a trend likely to strengthen in coming renewal rounds."
Based on preliminary figures for 2017, Munich Re said, it achieved an operating result of €1,241m (4,025m) in 2017, of which €864m (823m) related to the fourth quarter. There was tax income of €298m (previous year: tax expenditure of €760m) for the full financial year, mainly owing to the adverse impact from natural catastrophes.
In the fourth quarter, the U.S. tax reform led to tax relief of more than €70m.
Equity fell by around €3.6bn to €28.2bn in 2017. The return on risk-adjusted capital ("RORAC") – which serves as the key performance indicator for profitability in terms of risk capital requirements – was only 1.5 percent (10.9 percent), while the return on equity ("RoE") amounted to 1.3 percent (8.1 percent).
Munich Re added that, according to a provisional indication, and with due consideration of dividends and potential capital measures in 2018, the solvency ratio under Solvency II – calculated on a like-for-like basis – was almost unchanged at ~240 percent (242 percent).
Gross premiums written by the group increased slightly in 2017 to €49,115m (48,851m).