9th August 2017

Munich Re consolidated profit down but "very pleasing overall" says Wenning

Munich Re posted a consolidated profit of E733m for the second quarter(same period last year: E974m); the profit for the first half-year amounted to E1,290m(1,411m).
Joachim Wenning, chairman of Munich Re’s Board of Management, comments “Both the quarterly result and the half-year result are very pleasing overall. Munich Re is well on track to reach its 2017 profit guidance of E2.0–2.4bn. We have the right strategy, and we can concentrate on implementing that strategy by writing profitable new business. Both of our fields of business offer many opportunities in this regard. The bundling of our competencies in reinsurance and primary insurance allows Munich Re to continue driving digital transformation consistently across the entire value chain.”
A high investment result and a below-average random incidence of major losses contributed to the sound result of E733m. These were countered by currency translation losses resulting from the rise in the value of the euro. In the second quarter, the operating result of E1,156m was below the figure for the same quarter last year(E1,463m). The other non-operating result fell by E144m to –E264m (–120m), and taxes on income totalled E108m (302m). Equity fell to E30.1bn as at 30th June 2017, due to dividend payments, share buy-backs and currency translation effects.
The annualised return on risk-adjusted capital(RORAC) in the first six months amounted to 9.7%, and the return on overall equity(RoE) totalled 8.2%. Since the Annual General Meeting at the end of April, shares with a volume of around E220m have been repurchased by the end of July as part of the share buy-back programme announced in March.
Gross premiums written of E11,800m in the second quarter were approximately at the same level as in the previous year (11,928m). If exchange rates had remained the same, premium volume would have fallen by 1.6% year on year.
The reinsurance field of business accounted for E629m(991m) of the Group consolidated result for the second quarter. For the period from January to June, reinsurance business contributed E1,095m(1,440m) to the consolidated result. The operating result for the second quarter was E896m(999m).
Torsten Jeworrek, member of Munich Re's Board of Management, added “We see potential for profitable growth not only in innovative solutions or new digital business models, but also in traditional areas of business. The insurance gap is considerable even in developed markets. So there are also opportunities to write profitable business in the current market environment.”

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