Reinsurance company Munich Re has posted a surprise rise in its full-year profit for 2013, countering sharp competition and falling rates in the market. The firm’s earnings were helped by fewer natural catastrophes.
Munich Re had beaten its own full-year 2013 profit forecast, booking a net profit of 3.3 billion euros ($4.5 billion) last year, the world's leading reinsurance company February 4.
According to provisional calculations, the company's consolidated result in 2013 was boosted by 100 million euros from 3.2 billion euros in 2012, the Germany-based company said.
"The very good result, to which all the business fields contributed, demonstrates Munich Re's earnings strength. We have clearly surpassed our profit guidance of 3 billion euros," said Munich Re Chief financial Officer Jörg Schneider in a statement.
Munich Re was able to boost its profit in spite of falling reinsurance rates and worsening conditions in financial markets. In 2013, capital earnings dropped to 7.7 billion euros from 8.4 billion euros in the previous year, as interest rates fell to historic lows in industrialized nations.
However, the company's result was helped by lower than expected damage claims and the release of reserves built up against anticipated claims, Munich Re said in its earnings report.
According to Munich Re's 2013 Review of Natural Catastrophes, released in January, natural disasters like floods and storms caused around $125 billion in damage worldwide in 2013. Flooding in central Europe in May and June topped the list of global economic damage last year at more than $15 billion, with the insurance industry paying out $3 billion in claims.
In view of its 2013 result, Munich Re said it would propose an increased dividend of 7.25 euros per share, up from 7 euros it paid out in 2012.
uhe/kms (AFP, Reuters, dpa)