Dis­as­ters, rocky mar­kets put brakes on Mu­nich Re

The Myanmar Times - - International | Business -

NAT­U­RAL dis­as­ters and a tough mar­ket en­vi­ron­ment cut into prof­its at Ger­man rein­sur­ance heavy­weight Mu­nich Re in the sec­ond quar­ter, the com­pany an­nounced.

The rein­surer achieved “above av­er­age” net prof­its “de­spite higher nat­u­ral catas­tro­phe ex­pen­di­ture in the sec­ond quar­ter – aris­ing from wild­fires in Canada and earth­quakes in Ja­pan”, chief ex­ec­u­tive Niko­laus von Bomhard said.

Net profit fell to 974 mil­lion eu­ros (US$1.08 bil­lion) in the sec­ond quar­ter, down 9 per­cent com­pared with net profit over the same pe­riod in the pre­vi­ous year.

“We are well on track to reach our an­nual tar­get of 2.3 bil­lion eu­ros” in net profit de­spite the set­backs, Mr von Bomhard said – al­though the com­pany in May low­ered that bench­mark from an ini­tal es­ti­mate of be­tween 2.3 and 2.8 bil­lion af­ter weak first-quar­ter re­sults.

Gross in­come from in­sur­ance pre­mi­ums was down in the sec­ond quar­ter at 11.93 bil­lion eu­ros – a 4.3pc drop com­pared with April to June 2015.

Mean­while, Mu­nich Re’s op­er­at­ing profit plunged by 19.5pc to 1.46 bil­lion eu­ros.

The com­pany said that it had “suc­cess­fully with­stood cap­i­tal mar­ket tur­bu­lence in the wake of the Brexit ref­er­en­dum”, in part by sell­ing off eq­ui­ties in the run-up to the June 23 bal­lot.

But mone­tary pol­icy in­ter­ven­tions con­tinue to make life dif­fi­cult for the in­surer, Mr von Bomhard told Bloomberg TV.

“We are quite con­cerned with the ac­tions of the ECB and other cen­tral banks in Europe.”

The Euro­pean Cen­tral Bank and oth­ers are crowd­ing in­vestors out of bond mar­kets and keep­ing in­ter­est rates low, mak­ing for a chal­leng­ing en­vi­ron­ment for fi­nan­cial firms, he added.

But the CEO said he was con­fi­dent that “in­fla­tion will sooner or later start to go up”. –

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