Munich Re profits down 62%
Munich Re has reported its 2008 results, with profits down 62% on year due to writedowns on investments.
Full year net income dropped to €1.5 billion, compared to a record €3.9 billion in 2007, the Germany-based reinsurer said.
Combined ratio in reinsurance worsened to 99.5%, compared with 96.4% in 2007. On primary insurance, including legal expenses insurance, it improved to 91.2%, down from 93.4% the previous year.
Jörg Schneider, chief financial officer, said the company had come through the credit crisis with its capital intact, leaving it ‘relatively well’ positioned.
“Naturally, as an investor of about €175bn, we too had to absorb large losses on our risk-oriented investments,” Schneider said.
The company also admitted that reinsurance renewals had not gone as well as anticipated.
January renewals – the time when most companies renew their reinsurance – saw a 2.6% increase in prices, but a 3% drop in premium volumes compared to 2007.
Board member Torsten Jeworrek said: “Not all our expectations were fulfilled.”
He added: “I am nevertheless satisfied with the outcome of the renewals.”
Munich Re shares dropped more than 4% following the announcement.
Category: Financials, Insurance News
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