Munich Re posts strong Q1 growth; notes slight easing in pricing pressure
Munich Re enjoyed strong growth in the first quarter of 2017 and much improved profits noting that while pressure rates remains intense, it has noted a slight easing in some lines of business.
The world’s biggest reinsurer made a profit of €557 million in the first quarter, a 27.7 percent improvement on the €436 million it made a year earlier. It also affirmed its profit guidance of €2.0–2.4 billion for the full year.
The company’s gross written premiums in the quarter reached €12.9 billion, a 3.3 percent improvement on the year before; within this, its reinsurance unit specifically increased its GWP by 5.5 percent to €8 billion.
It noted that pressure on prices, terms and conditions remained intense in the renewals as at 1 April 2017, although there was a slight easing. “Munich Re continued to adhere to its consistent cycle management,” it said.
Jörg Schneider, the CFO of Munich Re, said: “We are very pleased with the profit for the quarter of €557 million, and are on track to meet our profit target for the full year. We achieved a gratifying quarterly result despite a significant increase in major losses, and this was due in large part to the good investment result. The development of business was particularly positive in life and health reinsurance, where the technical result was higher than we had expected. ERGO saw improved results in all segments.”
Regarding the economic outlook at Munich Re, Schneider said: “We welcome the turnaround in interest rates in the USA, and hope that the ECB will also return to sustainable monetary policy. Pressure on prices in reinsurance has eased off considerably. We continue to focus on our disciplined underwriting policy, responsiveness to clients’ needs, and the systematic tapping of new business opportunities in primary insurance and reinsurance.”
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