Munich, Aug. 10, (dpa/GNA) – Munich Re, the world’s largest reinsurance firm, raised its expectations for the full fiscal year on Thursday despite reporting a drop in quarterly profits.
In the second quarter, Munich Re reported net results of €1.15 billion ($1.27 billion), a 27.2% decline compared to the same quarter last year.
But Munich Re nonetheless said it’s more likely that the company will beat its €4 billion full-year target for net profits. Over the first half of the year, the company reported €2.4 billion in net profits
Price increases for property and casualty reinsurance have boosted those chances, the company said.
It will also depend, however, on whether costly natural disasters causing major insurance payouts strike in the second half of the year.
Munich Re’s main insurance subsidiary Ergo grew strongly over the quarter, but profits at Munich Re’s central reinsurance division dropped significantly, driven by major losses.
Munich Re pushed through 5.1% risk-adjusted price hikes for its property and casualty reinsurance clients on contracts through July 1, according to the company. The price hikes also came as the company shed business, with volume dropping by 1.9%.
This year is the first time that Munich Re and other major insurers have used the new IFRS 17 and IFRS 9 accounting standards to calculate business results. The previous year’s figures have been adjusted accordingly.
GNA