German insurance company Munich Re has reported first-quarter 2018 profit of €827m, up 48.4%, compared to €557m for the same period last year.

Increase in profits was mainly attributed to low major-loss expenditure and a better performance of its underwriting business.

The company expects its 2018 profit to be in between €2.1bn and €2.5 bn.

Gross premiums written increased 1.6% to €1.31bn in Q1 from €1.29bn a year ago.

Life and health reinsurance business posted a profit of €159m. Property-casualty reinsurance contributed €591m to the consolidated result for Q1.   

The company’s went for growth at the renewals of 1st April, which increased the size of its book by 8.1% by taking advantage of the market conditions.

Munich Re chief financial officer Jörg Schneider said: “The first quarter was mainly influenced by low major losses in property-casualty reinsurance. We also achieved a good quarterly result in life and health reinsurance and at ERGO. We can be very satisfied with the start to the year.”

For the period, the company’s total premium income from all lines of business increased by 0.8% to €5.15bn and gross premium written also increased by 1.3% to €4.94bn.

Premium income declined to €2.86bn due to the termination of large-volume treaty and negative currency translation effects.

Munich Re’s expenditure from major losses of over €10m each was only €62m, which was 1.4% of the net earned premium. This percentage is claimed to be significantly lower than its major loss projection of 12%.

Man-made major losses amounted to €112m, compared to last year’s €247m. For this period, the company’s major losses from natural catastrophes was overcompensated by reserve releases for prior-year major losses, resulting in a positive balance of €49m (–156m).

Image: Munich Re chief financial officer Jörg Schneider. Photo: Courtesy of Munich Re.