In the first quarter of 2010, Munich Re achieved a consolidated profit of €485m (same period last year: €437m). Large gains from the disposal of investments were the basis for the good quarterly result, whereas the natural catastrophe burden was unusually high. Munich Re has announced another share buy-back: shares with a volume of up to €1bn are to be repurchased before the Annual General Meeting in 2011.

CFO Jörg Schneider emphasised the two different factors which shaped the result for the first quarter: “It was an eventful start to the financial year 2010, with earthquakes, storms and volatility on the capital markets. The natural catastrophe losses were offset by high investment profits. Overall, I am very satisfied with our result for the quarter.” On the investment side, Munich Re had realised gains largely from the disposal of corporate bonds, he said. In primary insurance, Schneider emphasised the profit trend in recent quarters: “With its profit improvements, ERGO is on track.”

Together with the results for the first quarter, Munich Re also announced a further share buy-back programme: Before the next AGM on 20 April 2011, shares with a volume of up to €1bn are to be repurchased. The buy-back is conditional upon no major upheavals occurring on the capital markets or in underwriting business. On the basis of the current share price, around nine million shares or approximately 5% of the share capital would be bought back. The repurchased shares are to be retired, and the buy-back is scheduled to start shortly. “We are using this instrument to return unneeded capital. This programme benefits all shareholders”, said CFO Jörg Schneider. “Our good capitalisation enables us to continue taking selective advantage of opportunities for profitable growth despite the share buy-back.”

Since November 2006, Munich Re has carried out share buy-backs with a total volume of €5bn. Apart from the buy-back just announced, the share buy-backs launched as part of Munich Re’s Changing Gear programme in May 2007 are complete. Since the 2006 financial year, the shareholders have also received over €4bn in dividends.

Summary of the figures for the first three months
From January to March, the Group recorded an operating result of €770m (736m). Compared with year-end 2009, equity rose by 4.1% to €23.2bn. Annualised the return on risk-adjusted capital (RORAC) amounted to 10.7% and the return on equity (RoE) to 8.5%. Gross premiums written rose by 12.4% to €11.7bn (10.4bn). If exchange rates had remained the same, premium volume would have increased by 11.0% compared with the previous year.

Primary insurance: Positive trend continues – Result of €165m
The operating result for the first three months of 2010 was €251m (63m). Before elimination of intra-Group transactions across segments, the consolidated result amounted to €165m (–59m). The ERGO Insurance Group posted a significantly improved consolidated result of €78m (–80m).

In the first quarter, the combined ratio for the property-casualty segment (including legal expenses insurance) amounted to 98.7% (96.3%). Natural hazard events such as Winter Storm Xynthia and the long, harsh winter – notably also outside Germany – led to this increase.

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http://www.munichre.com/en/media_relations/press_releases/2010/2010_05_07_press_release.aspx

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