Germany's Munich Re Expects Lower After-Tax Profit in 2016 -- Update
16 März 2016 - 8:59AM
Dow Jones News
By Ulrike Dauer
Germany's Munich Re AG (MUV2.XE) on Wednesday set a target of
between 2.3 billion euros ($2.55 billion) and EUR2.8 billion for
after-tax profit this year.
The world's biggest reinsurer, which uses after-tax profit
including minorities as its main earnings yardstick, had already
cautioned in February that its guidance would be well below last
year's figure of EUR3.1 billion.
Reinsurers like Munich Re and Hannover Re (HNR1.XE) usually set
cautious targets at the beginning of the year, which are often
revised up or down in the course of the year, depending on
hurricane activity in the Atlantic and other major disasters that
can't be forecast.
The sector continues to suffer from low reinsurance rates the
companies can demand for insuring risks of their customers.
Investment returns will remain depressed this year, and last year's
extremely low bill for disaster damage is unlikely to be repeated
in 2016.
Munich Re also said it would buy back further shares. Between
the 2016 and 2017 annual general meetings, it plans to buy back up
to 11 million of its own shares for up to EUR1 billion, equivalent
to around 3.2% of the share capital at current share prices. So
far, it has bought back around 5.2 million shares for around EUR890
million under a previous plan.
Munich Re already released preliminary fourth-quarter and 2015
earnings last month, when it also announced plans to raise its 2015
dividend to EUR8.25 a share from EUR7.75 it paid for 2014.
On Tuesday, Munich Re paved the way for a change at the helm
after the 2017 annual shareholders' meeting, when Chief Executive
Nikolaus von Bomhard will hand over control to Joachim Wenning. Mr.
Wenning, 51, currently heads the group's international life
reinsurance business and its human resources department.
-Write to Ulrike Dauer at ulrike.dauer@wsj.com
(END) Dow Jones Newswires
March 16, 2016 03:44 ET (07:44 GMT)
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