Munich Re aims to triple profits after 2011 disaster year | Business| Economy and finance news from a German perspective | DW | 13.03.2012
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Munich Re aims to triple profits after 2011 disaster year

Munich Re suffered heavily from a string of natural disasters last year, making a small yet 'respectable' profit. The world's largest reinsurance company now hopes for a strong rebound in 2012.

In 2011, Munich Re saw its bottom-line net profit slump to just 702 million euros ($921 million) from 2.4 billion euros a year earlier, the world's biggest reinsurer said in a statement Tuesday.

The company, which handles the risks of general insurers, linked the losses to Japan's devastating earthquake and Tsunami, severe flooding in Thailand, an earthquake in New Zealand, floods in Australia and tornadoes in the United States.

Globally insured losses last year totaled $105 billion, Munich Re said, exceeding the previous record of $101 billion set in 2005, when losses soared amid claims over Hurricane Katrina in New Orleans.

"In the financial year 2011, the insurance industry faced an unprecedented cluster of severe natural catastrophes. At the same time, the financial crisis worsened, with interest-rate levels generally remaining low," chief executive Nikolaus von Bomhard told the company's annual news conference.

Given such an environment, Munich Re's net profit of 702 million euros was "respectable… a notable achievement and impressive testimony to our resilience," he added.

2012 earnings boost

Hoping 2012 will be calmer, CEO Bomhard said the company would strive to increase profits "three-fold to about 2.5 billion euros this year."

"Given average claims experience and in expectation of a rising price trend, we anticipate a significantly improved underwriting result for 2012," he added.

Gross premium income for 2012 was expected to reach 48 to 50 billion euros, compared to the 49.6 billion euros the company earned in 2011.

In view of "robust capitalization and favorable earnings prospects," Munich Re also announced it was planning to keep its dividend payout steady at 6.25 euros per share.

uhe/nk (AFP, dpa, AP)