By Ed Frankl 
 

Muenchener Rueckversicherungs-Gesellschaft AG said Tuesday that first-quarter profit rose slightly on lower-than-average catastrophe losses, though it took a more-than 100 million euro ($105.8 million) hit from the effects of the war in Ukraine.

The German reinsurer said major losses in its property-casualty reinsurance segment were EUR667 million, down from EUR892 million last year.

The largest losses came from heavy rainfall in Australia and winter storms in Europe, for which Munich Re took losses of EUR440 million and EUR120 million, respectively.

The company said it posted quarterly expenditure related to the war in Ukraine of slightly more than EUR100 million in some specialty lines.

"The financial consequences of the war and the sanctions severely impacted our result in the first quarter," Chief Financial Officer Christoph Jurecka said.

"We made write-downs for impairment losses on Russian and Ukrainian bonds alike and recorded the first claims," he said.

Overall, Munich Re reported net profit of EUR608 million in the three months to the end of March, up from EUR589 million a year earlier.

Gross premiums written increased by 16% on year to EUR16.83 billion.

The company's combined ratio, which compares incurred losses and expenses with income from its insurance business, improved significantly to 91.3% from 98.9%.

However, the company's life-and-health business recorded a loss of EUR78 million, compared with a positive contribution of EUR52 million last year, mainly due to Covid-19 losses from the Omicron wave in the U.S., Munich Re said.

At its April renewals, the DAX-listed company said it increased the volume of business written by 7.6% to EUR2.7 billion, tapping into growth opportunities in Asia and Latin America.

Its solvency ratio--a measure of an insurer's financial strength--at March 31 was 231%, above the 227% of Dec. 31, 2021.

Munich Re kept its full-year profit guidance of EUR3.3 billion unchanged, though it raised its gross-premium outlook by EUR3 billion to EUR64 billion, despite flagging continuing uncertainty regarding the financial impact of the war.

 

Write to Ed Frankl at edward.frankl@dowjones.com

 

(END) Dow Jones Newswires

May 10, 2022 03:13 ET (07:13 GMT)

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