Munich Re aims for EUR2.5-billion profit in 2012

Munich Re is aiming for a profit of around EUR2.5 billion (Cdn$3.2 billion) in 2012, concluding the 2011 financial year with a profit of €712 million (Cdn$923.9 million) despite numerous severe catastrophes.

At the same time, the financial crisis worsened, with interest-rate levels generally remaining low, the company noted.

“In this exceptional situation, our integrated business strategy — combining primary insurance and reinsurance under one roof — proved its worth,” said Munich Re CEO Nikolaus von Bomhard. “We were able to conclude 2011 with a respectable annual result, a notable achievement and impressive testimony to the group’s resilience.”

Looking forward into 2012, the company expressed optimism.

“Prospects in property-casualty reinsurance are brightening increasingly, leading Munich Re to target a combined ratio of around 96% of net earned premiums over the market cycle as a whole,” it reported. “In property-casualty primary insurance, the target for 2012 remains a combined ratio of under 95%.”

Assuming a return on investment of 3.5%, the company predicted 2012 investment earnings of approximately EUR7.2 billion (Cdn$9.3 billion). Munich Re noted this would be slightly higher than last year, “which was impacted by high write-downs on Greek securities, but lower than in previous years.”