Munich Re affirms profit guidance despite natural catastrophes

By: Munich Re

Munich Re affirms profit guidance despite natural catastrophes – quarterly profit of €483m

Jörg Schneider, Chief Financial Officer: “This good Q3 result puts us on track to achieve our profit target for 2018 – despite a series of major natural catastrophes still continuing in the fourth quarter. The benefits of first-class primary insurance and reinsurance cover become apparent in times of climate change and growing economic risks.”

▪ In Q1–3, Munich Re posted a profit of €2,038m and is thus on track to achieve its profit target of €2.1–2.5bn

▪ High losses in Q3 owing to Typhoon Jebi and Hurricane Florence (around €300m each)

▪ Profit guidance for ERGO raised to at least €350m, following good Q1–3

▪ Robust growth in property-casualty reinsurance

Summary of the figures for Q3 The operating result increased to €1,040m (–1,732m) year on year. The other non-operating result declined to –€272m (–243m); of which –€127m (–74m) was attributable to the currency translation result. Taxes on income totalled €235m (previous year: positive tax result of €597m). At €27,117m, equity was lower than at the beginning of the year (€28,198m), since the good result for Q1–3 and positive currency translation effects were more than offset by the dividend payment, share buy-backs and lower unrealised gains attributable to higher interest rates. Gross premiums written increased by 4.2% to €12,790m (12,279m). If exchange rates had remained the same, premium volume would have risen by 4.3% year on year.

In Q3, the annualised return on risk-adjusted capital (RORAC) amounted to 7.7%, and the return on overall equity (RoE) totalled 7.2%. For the first nine months, the annualised return on risk-adjusted capital (RORAC) amounted to 10.8%, and the return on overall equity (RoE) totalled 9.9%.

At more than 260%, the solvency ratio at the end of Q3 was much higher than at the beginning of the year (244%). The increase in Q3 was mainly due to an update of property values.

As part of its active capital management, Munich Re has repurchased shares with a volume of around €746m in 2018 so far. In addition, Munich Re plans to issue a new subordinated bond.