GERMANY-based reinsurer and insurer Munich Re has reported a consolidated result of €712m ($937m) for 2011, down from €2.43bn in 2010 and its poorest performance for at least five years. Gross premiums written rose to €49.6bn from €45.5bn.
In the reinsurance sector GPW rose to €26.5bn from €23.6bn, generating a consolidated gain of €774m, down from €2.1bn in 2010. The combined ratio rose to 113.6% from 100.5%.
In primary business GWP rose fractionally to €17.6bn, with a consolidated result of €762m. The combined ratio rose to 97.8% from 96.8%.
Munich Health contributed €45m to the consolidated result, down from €63m in 2010, on GWP of €6.1bn, up from €5.1bn. The combined ratio improved to 99.4% from 99.7%.
For the group the return on equity was 3.3%.
The net balance on write-ups and writedowns was minus €381m, with expenses for writedowns on Greek sovereign debt coming to €1.2bn for the year – €245m in Q4 2011. Munich Re expects that the Greek debt restructuring will lead to relatively low expenses in 2012.
Looking ahead, the Group anticipates a profit of about €2.5bn in 2012, on GWP of between €48bn and €50bn. This would be split €25bn-€27bn in reinsurance and €17bn-€18bn in insurance, with reinsurance contributing €1.9bn-€2.1bn, with the primary arm contributing some €400m and Munich Health adding between €50m and €100m. Munich Health is expected to be roughly flat at €6bn.
Munich Re is targeting a combined ratio of about 96% in reinsurance “over the market cycle as a whole”. In primary insurance it is targeting a combined ratio of under 95%. A return on investment of about 3.5% would lead to a result slightly better than 2011, which was impacted by the Greek writedowns.
The full-year dividend was unchanged at €6.25 a share.