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Business

Munich Re sees profit falling

Munich Re has reported a year-on-year drop in profit for 2016 as natural disaster-related costs increased particularly in the final months of the year. On top of that, low interest rates remained a headache.

The world's largest reinsurer said Tuesday its profit dropped by around 16 percent to 2.6 billion euros ($2.7 billion) in 2016, down from 3.1 billion euros in the previous year.

Munich Re said it had been hit by higher costs from natural disasters in the final three months of 2016.

It pointed to claims for some 232 million euros relating to Hurricane Matthew, which struck the Caribbean and the US in October, and 252 million euros for an earthquake in New Zealand.

Happy shareholders

Like other financial industry firms, Munich Re kept battling extremely low interest rates, making it more difficult to earn money on the premiums paid by clients.

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The problem with low interest rates

While profits were lower last year, Munich Re said it would increase its dividend to 8.60 euros per share, up from 8.25 euros per share for 2015.

"We are sure that we will be able to maintain this level of dividend and continue the trend of raising it in the future, CFO Jörg Schneider said in a statement.

hg/jd (AFP, dpa)

 

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