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Business

Munich Re rides out the storm with ease

The world's largest reinsurer, Munich Re of Germany, has said it will earn much more in 2012 than expected in the beginning of the year. Losses from Hurricane Sandy have already been priced.

The number one among global reinsurers, Munich Re, announced on Wednesday its full-year profit would be well above the forecasts it issued earlier in 2012.

"We're very optimistic of realizing a profit in the region of 3.0 billion euros ($3.85 billion) this year," Chief Financial Officer Jörg Schneider said in a statement. He called the results for the first three quarters very pleasing, adding that the German reinsurer had originally only penciled in earnings to the tune of 2.5 billion euros.

In the third quarter alone, Munich Re's net profit almost quadrupled year-on-year to total 1.13 billion euros.

Storm damage under control?

Munich Re acknowledged that claims from Hurricane Sandy would prevent the company from achieving an even better result, all the more since loss estimation would prove a tall order.

"The high number of individual losses and the vast extent of the storm make loss estimation very difficult," said Jörg Schneider. "Based on provisional estimates characterized by a high degree of uncertainty we anticipate Munich Re's share of the losses to be in the mid-three-digit-million-euro range."

Nevertheless, the world's largest reinsurer said it was doing fine particularly because of high yields from its capital investments around the globe. This marks a stark contrast to last year when the company was forced to write off a huge amount of Greek sovereign debt bills.

hg/hc (dpa, AFP)