• 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)

Don't miss...X
Left Right

Your comments about this article

Today's headlines
Berlin to open memorial to Nazis' disabled victims
Auschwitz. Photo: DPA

Berlin to open memorial to Nazis' disabled victims

Benjamin Traub, a sad-eyed German boy born in 1914, was considered a bright child by his parents and called gifted by his teachers. His life would end in a Nazi gas chamber. READ  

Anti-euro party to debut in state parliament
AfD leader Bernd Lucke celebrates his party's EU election results. Photo: DPA

Anti-euro party to debut in state parliament

Germany's fledgling anti-euro party looks set to win its first seats in a state parliament on Sunday, gaining a political foothold in opposition to Chancellor Angela Merkel's grip on power. READ  

Stakes rise in Oracle-SAP copyright fight
Photo: DPA

Stakes rise in Oracle-SAP copyright fight

US appeals court on Friday ruled that Oracle be given a choice between $356.7 million or a new trial for its copyright lawsuit against German rival SAP. READ  

Court rules against child porn suspect Edathy
Former SPD MP Sebastian Edathy photographed at a press conference in February. Photo: DPA

Court rules against child porn suspect Edathy

The Constitutional Court on Friday rejected an attempt by former Social Democratic (SPD) MP Sebastian Edathy to have evidence against him thrown out in his trial for possession of child pornography. READ  

Student busted in case of misdelivered hash
Photo: DPA

Student busted in case of misdelivered hash

A Bavarian student expecting a cannabis delivery was collared by "Commissioner Fluke" after acting surprised in front of policemen when he saw his letter box was empty. READ  

Security fears block Germany-Israel match
German and Israeli fans cheer in the stands during a friendly in Leipzig in 2012. Photo: DPA

Security fears block Germany-Israel match

A friendly soccer match against Israel marking 50 years of diplomatic ties has been called off amid security concerns and the escalation of the Middle East conflict, the German Football Federation (DFB) said on Friday. READ  

Germany's brain drain is Europe's gain
Inside the terminal at the Frankfurt International Airport. Photo: Shutterstock

Germany's brain drain is Europe's gain

Figures from the European Union show that while many German professionals are able to find work abroad with their well-recognised qualifications, Germany doesn't always extend the same courtesy to foreigners. READ  

S-Bahn arson in support of refugees, group claims
Passengers at Berlin's Ostkreuz station yesterday as information screens relay news of the disruption. Photo: DPA

S-Bahn arson in support of refugees, group claims

A radical left-wing group claimed responsibility on Friday for an arson attack that cut power to several S-Bahn lines and caused transport chaos in Berlin, saying it was intended to awaken people to the plight of refugees. READ  

Pilots' strike over, but disruption continues
Passengers in Hannover check departure boards showing cancelled Germanwings flights. Photo: DPA

Pilots' strike over, but disruption continues

UPDATE: Germanwings pilots have ended their six-hour strike which grounded 116 flights and up to 15,000 passengers of Lufthansa subsidiary Germanwings on Friday. READ  

Man narrowly escapes unwelcome drop-in
Emergency services use a crane to lift the fallen crane in Cologne. Photo: DPA

Man narrowly escapes unwelcome drop-in

A Cologne resident was pinned to his bed after a 40-metre construction crane toppled onto his home early on Friday. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Photo: Shutterstock
Gallery
Ten of the oddest things found by German border control
Photo: Gerkan, Marg and Partners/Tegel Projekt GmbH/J. Mayer
Berlin
How will Berlin look in five years' time?
Photo: DPA
Culture
Sprechen Sie Deutsch? 10 reasons why you should
Photo: DPA
Gallery
The best of Berlin's mayor Klaus Wowereit in 14 pictures
Photo: DPA
Politics
Germany sends burgers and sausages to Kurds
Photo: Matthias Kock
National
Tribes, ties and a movie: A German's Afghan life
Photo: DPA
Gallery
10 things to do before summer in Germany is really over
Photo: DPA
Gallery
The mysteries of Berlin's abandoned theme park
Photo: Europeana.de 1914 - 1918
Gallery
A German soldier's life behind WWI lines
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

3,440
jobs available
Toytown Germany
Germany's English-speaking crowd