German insurance group Munich Re posted a better-than-expected second quarter net profit on Wednesday owing to earnings from investments, and raised slightly a full-year sales target despite losses from events such as the BP oil catastrophe.
Gross premiums, the equivalent of sales in the insurance industry, are now expected to reach between 44 billion and 46 billion euros (58-61 billion dollars) this year, a statement said. Munich Re had previously estimated premiums of between 43 billion and 45 billion euros.
Overall group profit should climb to more than two billion euros, meanwhile, even though the first half was marked by “exceptionally heavy burdens from major losses,” chief executive Nikolaus von Bomhard was quoted as saying.
They included the Gulf of Mexico oil disaster, an earthquake in Chile and a major winter storm in Europe. But owing to a “very pleasing profit from investments,” the full-year profit target “remains ambitious, but it is achievable,” von Bomhard stressed.
In the three-month period from April to June, the insurer’s operating profit rose to 1.45 billion euros, and its combined ratio – which measures insurance payments against premiums taken in – declined to 94.5 percent. That was considered “good” by the reinsurance giant, and compared favourably with the first quarter figure of 109.2 percent, when storm Xynthia in Europe and the Chilean earthquake resulted in major costs to the company.
In April, Munich Re’s re-insurance operation was hit by the BP oil spill, an event that could cost it more than 100 million euros and for which it has already “made adequate provision.” Some of the costs were booked in the second quarter, it said.
Frankfurt, Aug 4, 2010 (AFP)