• Germany edition
 
Munich Re profits rise despite Greece hit
Photo: DPA

Munich Re profits rise despite Greece hit

Published: 04 Aug 2011 10:43 GMT+02:00
Updated: 04 Aug 2011 10:43 GMT+02:00

The result was well above an average analyst forecast of €650 million compiled by Dow Jones Newswires and Munich Re shares posted solid gains in early trading on the Frankfurt stock exchange.

Munich Re said that to ensure clarity in its figures it had had based the value of Greek bonds it owns on their market level as of June 30, resulting in a total charge of €703 million that cut €125 million from its net profit.

The group was boosted however by price increases in some reinsurance segments, chairman Nikolaus von Bomhard said, and by improved earnings in its primary insurance activities.

Gross premium revenue gained 9.2 percent from the second quarter of 2010 to €11.97 billion but this was less than the €12.05 billion expected by analysts.

A statement said Munich Re still expects "to close the year 2011 with a profit," although its original target "can no longer be achieved" given heavy losses in the first quarter.

Natural catastrophes early this year, especially earthquakes and tsunamis in New Zealand and Japan, have already led Munich Re to declare 2011 its worst year ever.

It now faces charges stemming from the eurozone debt crisis but Munich Re said that debt issued by Greece, Ireland and Portugal represents only four percent of its bond portfolio, which is worth more than €70 billion.

With regard to 2011 as a whole, von Bomhard stressed that "despite the exceptionally heavy claims burdens, we aim to achieve a positive result for the year."

That would hold true "even if there were additional major losses in the further course of the year, provided these did not significantly exceed the average figure to be expected," the statement said.

The Munich Re chairman underscored the benefit of building up its primary insurance activities which provide "stable earnings and balances the burdens that occur in reinsurance due to high claims costs for natural catastrophes or major industrial risks."

He added that "this year especially, our integrated business model is again proving its worth."

Munich Re shares showed a gain of 1.93 percent to €99.70 in early Frankfurt trading, while the DAX index on which they are listed was up 1.22 percent overall.

AFP/mdm

The Local (news@thelocal.de)

Your comments about this article

Today's headlines
Bundesbank warns of ECB 'change of course'
Bundesbank chief Jens Weidmann: Photo: DPA

Bundesbank warns of ECB 'change of course'

The head of Germany's powerful Bundesbank sharply criticised what he called a radical new approach by the European Central Bank of easy money, in an interview published Sunday. READ  

MH17 Crash
Families of German MH17 victims to sue
Australian and Dutch investigators examine a piece of debris of Malaysia Airlines Flight MH17 plane. Photo: EPA/DPA/ Igor Kovalenko

Families of German MH17 victims to sue

Relatives of German victims of downed Malaysia Airlines flight MH17 plan to sue Ukraine and its president for criminal negligence for not closing the country's airspace, a lawyer said Sunday. READ  

Sport
Wonder goal puts new boys Paderborn on top
Paderborn players celebrate after defeating Hanover 2-0 to go top of the Bundesliga. Photo: DPA

Wonder goal puts new boys Paderborn on top

Promoted Paderborn went top of the Bundesliga helped by an extraordinary 80-metre goal at Hanover on Saturday as champions Bayern Munich were held to a goalless draw by struggling Hamburg. READ  

Oktoberfest 2014
Oktoberfest opens to toast millions
Celebrities Carolin Reiber and Marianne Sägebrecht raise their glasses at Oktoberfest 2014. Photo: DPA

Oktoberfest opens to toast millions

Germany's world-famous Oktoberfest kicked off Saturday with the traditional tapping of the first barrel of beer, as millions of revellers are set to soak up the frothy atmosphere in the 16-day annual extravaganza. READ  

Germany plan air lifts to help fight Ebola
A Liberian man holds his daughter as they wait for treatment for suspected Ebola symptoms in Monrovia. Photo: DPA

Germany plan air lifts to help fight Ebola

Germany and France will send military transport planes to West Africa to help efforts to contain the Ebola epidemic, Chancellor Angela Merkel and military officials said on Friday. READ  

Germany beefs up asylum rules for Balkans

Germany beefs up asylum rules for Balkans

Germany made it harder Friday for people from Bosnia-Herzegovina, Macedonia and Serbia to apply for asylum after lawmakers classified the three Balkan countries as safe, with respect for basic rights. READ  

German Muslims rally against extremism
Muslims pray in Kreuzberg, Berlin, on Friday outside a mosque which was damaged in an arson attack. Photo: DPA

German Muslims rally against extremism

Muslims across Germany held a day of prayers and rallies on Friday to condemn both Islamic extremism and a backlash against their faith that has seen arson attacks on mosques. READ  

German military flight to Iraq starts with a hiccup
The trainers on the air strip in Hohn, Schleswig-Holstein. Photo: Bundeswehr.

German military flight to Iraq starts with a hiccup

Military trainers flew to northern Iraq from Germany on Friday, ahead of a huge delivery of weapons from the German military, but things didn’t initially go as planned. READ  

Munich gets four Euro 2020 matches
Photo: DPA

Munich gets four Euro 2020 matches

UPDATE: Munich will play host to four Euro 2020 games, European football’s governing body Uefa announced in Geneva on Friday, but London was the real winner. READ  

Driver, 18, ploughs into school pupils
The scene by the bus stop outside the school in Diepholz. Photo: DPA

Driver, 18, ploughs into school pupils

An 18-year-old drove into a group of students outside a school in western Germany on Friday morning, injuring several. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Photo: DPA
Culture
Your guide to Munich Oktoberfest's tents
Photo: DPA
Hamburg
Drunk teachers ruin school trip to Hamburg
Marks & Spencer
Sponsored Article
Fashion Ladies of the Local: Win a New Autumn Look
Photo: DPA
Gallery
Oktoberfest 2014: The best and worst in dirndl fashion
Photo: Shutterstock
Gallery
Ten German words you'll never want to hear again
Photo: DPA
Education
German universities tumble in global rankings
Photo: Shutterstock
Business & Money
The three types of firms hiring foreigners
Photo: DPA
Berlin
Frisky couple shock Berlin commuters
Sponsored Article
Bilingual education from nursery to graduation at Phorms
Photo: DPA
Business & Money
JobTalk: All you need to know about working in Germany
National
Share news tips with The Local Germany
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Latest news from The Local in Sweden

More news from Sweden at thelocal.se

3,365
jobs available
Toytown Germany
Germany's English-speaking crowd