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Daily Insurance Industry News
Monday 16th of July 2018
July 28, 2008

Munich Re issues profit warning

by David Masters

Story link: Munich Re issues profit warning

The price of insurance stocks across Europe fell dramatically yesterday following a profit warning from Germany-based insurance giant Munich Re.

Munich Re, the second largest reinsurer in the world, have forecast second quarter profits of €600 million, almost 50% less than the €1,158 million profit for the same period last year.

The company also issued a warning that profits for 2008 will fall short of the previously predicted €3 billion.

The sharp fall in profits is being blamed on ‘turmoil on the capital markets’ which has led to sharp drops in the price of bonds and equities, resulting in substantial write-downs for the company.

Munich Re has over €160 billion of its assets in investments.

Share prices in the company fell 8% following the profit warning, and Merrill Lynch downgraded the company’s rating from ‘buy’ to ‘neutral’.

 

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