Major German reinsurer Munich Re has revealed that thanks to investment gains and asset sales, the costly series of hurricanes in the Mexican Gulf have not prevented it from increasing third quarter profits.
As one of the largest reinsurers worldwide, Munich Re exposure cost for this year’s American hurricane season of E750 million post-tax was among the highest in the industry. However, strong returns on investments and an income of E563 million from the sale of its stake in Allianz has ensured that the company actually grew profits in the third quarter.
Overall, third term profits totaled E513 million, a 33% rise on the 2004 figure of E386 million. The overall investment result amounted to a very good E3,078 million, while written premiums remained almost unchanged compared with the same quarter last year, totaling E9.2 billion.
Profits from reinsurance were E344 million despite Hurricanes Dennis and Emily costing the company around E30 million, Katrina costing E800 million and Rita E260 million before tax.
Due in part to its resilient third quarter and to further upcoming one-off gains in the fourth quarter, including the divestment of Karlsruher Lebensversicherung stock, Munich Re is confident that it will achieve its financial forecasts for the full year.