The world's largest reinsurer, Munich Re, has posted a sizable drop in year-on-year quarter-one earnings due to costly storms and a decline in interest rates in the United States and the eurozone.
Natural catastrophes and low interest rates around the world dragged down profits at the world's largest reinsurance company in the first three months of 2015, Munich Re said on Thursday as it #link:http://www.munichre.com/en/media-relations/publications/press-releases/2015/2015-05-07-press-release/index.html:published its quarterly earnings report#.
Q1 profits sank to 790 billion euros ($896.5 billion), the reinsurer said - a 16 percent drop over the same period one year prior. The reinsurer attributed some of that loss to loose monetary policy in the US and the eurozone, which Munich Re said had a "substantial negative impact on insurers."
The Munich-based, Dax-listed concern also had to account for damages from Hurricane Niklas, which wreaked havoc across central Europe, and Cyclone Pam, a storm in the South Pacific in mid-March.
Munich Re said Niklas cost the firm some 40 million euros, while Pam cost 30 million euros. Man-made damages accounted for a loss of 189 million euros in total, including 35 million euros for a fire at an American refinery.
The reinsurer put a positive spin on the earnings results, saying that the impact of major losses was actually less than expected in the first quarter.
"The performance of Munich Re (Group) in the first three months of 2015 was gratifying," Munich Re said in the report, adding that its 790 million euros in profit was in line with expectations.
Jörg Schneider, the firm's chief financial officer, said Munich Re was #link:http://www.munichre.com/en/media-relations/publications/press-releases/2015/2015-05-07-press-release/index.html:on target to reach profits between 2.5 and 3 billion euros# by the end of the year.
cjc/hg (dpa, Munich Re)