Munich Re has reported a 56% drop in its fourth quarter 2018 profit at €238m, compared to €538m for the same quarter of the previous year.
Main building of Munich Re in Munich, Germany. (Credit: Munich Re / Marcus Buck, München)
The drop in profit for the fourth quarter has been attributed by Munich Re to natural catastrophes in the US, Japan and other countries.
The company took a hit of €1.25bn from natural catastrophes all through 2018, of which €697m was recorded in the fourth quarter.
Overall, the Germany-based resinsurance giant reported an operating result of €3.72bn in 2018, out of which €404m is related to the fourth quarter.
In the reported quarter, the company’s gross premiums written came down to €11.96bn from the €12.1bn figure reported in Q4 2017.
In its reinsurance business, Munich Re’s gross premiums written for Q4 2018 was €7.6bn, compared to €7.8bn in the same quarter of the previous year.
Munich Re’s ERGO business, which provides customers expert advice and a range of primary insurance products through its group of companies, increased its gross premiums written to €4.35bn in Q4 2018. This was in comparison to the €4.31bn it reported in Q4 2017.
For the full year 2018, Munich Re’s gross premiums written of €49.06bn is roughly the same as the 2017 figure of €49.11bn.
The company said that a drop in premium income in the life and health reinsurance segment due to the expiry or restructuring of large-volume capital-relief treaties was compensated largely by partly strong growth in property-casualty reinsurance.
The reinsurance unit contributed €1.86bn to the consolidated result in 2018 while the operating result increased from €73m in the previous year to €2.46bn.
However, gross premiums written for 2018 were slightly down to €31.28bn, compared to the figure of €31.56bn reported in 2017.
Munich Re CFO Christoph Jurecka said: “We are very satisfied with the overall result for 2018. We increased our profit and achieved our result target – despite the volatile capital markets and high losses from natural catastrophes in the fourth quarter.
“The year was especially positive for life and health reinsurance and for ERGO, both of which surpassed their profit guidance for the year. Munich Re shares remain a reliable, high-return investment, which is again reflected in the significant increase in the dividend.”