Q3 profits grow at Munich Re; claims pricing pressure has eased

Munich Re substantially increased its profits in the third quarter of 2016 although the business hardly grew, as the company continues to place profit before growth.

Munich Re's consolidated profit in the third quarter of 2016 was €684 million, an increase of 30.3 percent from €525 for the third quarter of 2015.

Munich Re's gross written premiums for the three-month period ending September 30 were €12.3 billion, a decrease of 1.1 percent year-on-year. If exchange rates had remained the same, they would have increased slightly.

GPW within Munich Re's reinsurance segment were €7.3 billion, an increase of 1.9 percent year on year (YOY). Within this, the life business increased its GPW to €2.6 billion, an increase of 3.9 percent, and its property/casualty business grew its GPW to €4.6 billion, an increase of 0.8 percent.

The property/casualty side's combined ratio was 92.5 percent, down 2 percentage points YOY.

Jörg Schneider, chief financial officer, commented: "Munich Re is well on track with this quarterly profit of almost €700 million. We are now more optimistic about our profit guidance."

"The environment continues to be challenging. If interest rates remain low, the scope for implementing additional reserve releases will play an even greater role in reinsurance business."

Munich Re also said that it felt pressure on prices, terms and conditions has eased off slightly in recent renewal rounds, and is now anticipating clear trends towards stabilisation.

"We continue to adhere to our strict underwriting discipline – as profit has always come before growth for us," Schneider added.