German insurer Munich Re is on track to meet its target of a post-tax return of 15% on risk-adjusted capital after a profitable first quarter, despite significant losses from several disasters.

The group said that a net profit of E979 million in the first three months of 2006 puts the business in an even better position than last year, despite increased claims costs from several catastrophes during the period, including Cyclone Larry in Australia.

Net profit for the quarter was up by 41.7% while operating profit rose 29.4% to E1.47 billion. Premium income was slightly lower, at E10 billion.

Cyclone Larry caused substantial damage in northern Australia, giving rise to claims of almost E50 million. Altogether, major losses – including a container ship fire and a satellite failure – amounted to E274 million. However, a good performance across the rest of the business led to the combined ratio improving again by 4.3 percentage points to 92.2%.

Successful treaty renewals in Asia contributed to the insurer’s positive outlook for the rest of the year. Munich Re said that it would continue to put profitability before growth and has set itself the target of a post-tax return of 15% on risk-adjusted capital, corresponding to a consolidate profit in the range of E2.6-2.8 billion.