Munich Re’s First region internet profit Drops by way of 7%

Munich Re’s net earnings fell in the first region, stated its chief executive on Wednesday, hit by means of low capital marketplace interest charges that hold to weigh on funding profits at the sector’s biggest reinsurer.

The employer does no longer formally launch quarterly outcomes until may additionally 8; however, CEO Nikolaus von Bomhard informed its annual shareholder meeting: “internet earnings is likely to are available in at around €900 million ($1.25 billion) in the first region.”

that could represent a drop of about 7 percent in comparison with the same length closing yr, when it published net profit of €970 million [$1.347 million].

The CEO’s remarks weighed on Munich Re’s stocks, which fell 2.2 percentage to €166.25 [$230.84] by way of 1145 GMT, the biggest decliner in the DAX index of German blue chip stocks, which changed into flat. The STOXX Europe 600 insurance index fell 0.5 percent.

Analysts had expected quarterly internet profit of €993 million [$1.3788 billion], according to Thomson Reuters I/B/E/S.

“it might be exceptional to have a beat and this isn’t one,” stated one insurance analyst, who declined to be named due to his bank’s coverage.

Morgan Stanley reduce its recommendation on the share to “identical weight” from “overweight” on Wednesday, he pointed out.

Von Bomhard reiterated Munich Re’s goal of incomes €3 billion [$4.1655 billion] in net profit this 12 months and repeated that the goal was “bold” within the face of sinking yields at the reinsurer’s stock of fixed-income investments.

The organization published internet income of €three.3 billion [$4.582 billion] in 2013.

It felt increasing downward fee stress whilst annual reinsurance contracts with coverage company customers had been renewed in April, as pension funds and different specialised buyers pour money into the reinsurance commercial enterprise, competing immediately with traditional reinsurers like Munich and Swiss Re.

“it has been a long term since we’ve seen such excessive competition,” von Bomhard stated.

“however, we’ve additionally visible that Munich Re has been much less suffering from these cyclical market actions than the overall marketplace has,” he said, mentioning the reinsurer’s near courting with its coverage corporation customers and its capability to supply tailored reinsurance solutions as vital strengths.