Munich Re quadruples profit despite hurricane

Munich Re, the world's biggest reinsurer, said Tuesday its bottom-line profit increased by more than fourfold in 2012 because natural catastrophes cost it less than a year ago.

Munich Re quadruples profit despite hurricane
Photo: DPA

Munich Re said in a statement it booked net profit of €3.2 billion ($4.3 billion) last year, compared with €0.71 billion a year earlier.

Operating profit also more than quadrupled, soaring to €5.4 billion in 2012 from €1.2 billion in 2011 and gross premium income was up 5.1 percent at €52.0 billion, the statement said.

“This very pleasing profit is founded on our rigorous risk management, disciplined underwriting policy and the realisation of profitable business opportunities,” said chief financial officer Jörg Schneider.

“Our core business in insurance and reinsurance is healthy, while the claims burden from major losses was slightly below average. We also achieved a good investment result,” Schneider said.

Munich Re said its natural catastrophe losses amounted to €1.3 billion last year, with Hurricane Sandy being the year’s biggest loss event costing the group around €800 million before tax.

The year before, natural catastrophe losses had been as much as €4.5 billion in the wake of the earthquake and tsunami in Japan, earthquakes in New Zealand and floods in Thailand.

“2012 thus brought good progress,” he continued and added that the dividend would be “substantially increased” to €7.0 per share for 2012 from €6.25 a year earlier.

In the fourth quarter alone, Munich Re sustained a 23.9-percent drop in net profit to €480 million owing to writedowns and restructuring costs.

Operating profit, on the other hand, doubled to €1.6 billion in the October-December period on a 4.5-percent increase in gross premium income to €12.9 billion, Munich Re said.


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Four injured as WWII bomb explodes near Munich train station

Four people were injured, one of them seriously, when a World War II bomb exploded at a building site near Munich's main train station on Wednesday, emergency services said.

Smoke rises after the WWII bomb exploded on a building site in Munich.
Smoke rises after the WWII bomb exploded on a building site in Munich. Photo: picture alliance/dpa | Privat

Construction workers had been drilling into the ground when the bomb exploded, a spokesman for the fire department said in a statement.

The blast was heard several kilometres away and scattered debris hundreds of metres, according to local media reports.

Images showed a plume of smoke rising directly next to the train tracks.

Bavaria interior minister Joachim Herrmann told Bild that the whole area was being searched.

Deutsche Bahn suspended its services on the affected lines in the afternoon.

Although trains started up again from 3pm, the rail operator said there would still be delays and cancellations to long-distance and local travel in the Munich area until evening. 

According to the fire service, the explosion happened near a bridge that must be passed by all trains travelling to or from the station.

The exact cause of the explosion is unclear, police said. So far, there are no indications of a criminal act.

WWII bombs are common in Germany

Some 75 years after the war, Germany remains littered with unexploded ordnance, often uncovered during construction work.

READ ALSO: What you need to know about WWII bomb disposals in Germany

However, most bombs are defused by experts before they explode.

Last year, seven World War II bombs were found on the future location of Tesla’s first European factory, just outside Berlin.

Sizeable bombs were also defused in Cologne and Dortmund last year.

In 2017, the discovery of a 1.4-tonne bomb in Frankfurt prompted the evacuation of 65,000 people — the largest such operation since the end of the war in Europe in 1945.