Munich Re Q1 opg exceeds expectations, plans share buyback UPDATE

Munich Re Q1 opg exceeds expectations, plans share buyback UPDATE

	Published : Fri, 04 May 2007 08:28 By : Agencies Print this Story

(updating to add segment results, CEO comments, details)

MUNICH (Thomson Financial) - Muenchener Rueckversicherungs AG said first-quarter operating profit decreased to 1.321 bln eur from 1.471 bln, while net profit before minorities rose slightly to 982 mln eur from 979 mln on a strong investment result, exceeding analysts' expectations.

Net profit after minorities increased to 965 mln from 959 mln.

Analysts' consensus forecast net after minorities to come in at 758 mln eur and operating profit to amount to 1.226 bln.

Gross written premiums were largely flat at 10.020 bln eur after 10.036 bln, while net earned premiums declined slightly to 8.794 bln from 8.878 bln.

Munich Re said it resolved to buy back 2.0 bln eur of its shares before the 2008 AGM. The reinsurer also said it wants to buy back an additional 3.0 bln eur of its shares up to 2010.

The company said it also intends to continue paying high dividends, adding that the payout for 2006 totaled nearly 1 bln eur.

'With dividends at this level and a share buy-back programme of over 5 bln eur, we would pay out more than 8 bln eur to shareholders by the end of 2010', chief executive Nikolaus von Bomhard said in a statement.

Looking ahead to the 2007 full year results, Munich Re raised its net profit target range to 3.0-3.2 bln eur from 2.8-3.2 bln and forecast a combined ratio of below 97 pct in reinsurance and below 95 pct in primary insurance.

'I now firmly reckon with a 'three' before the decimal point, provided that capital markets and claims experience develop normally to the end of the year', von Bomhard said.

Given the strong euro, Munich Re also expects group premiums of 36.5-37.5 bln eur this year, the company said.

Winter storm Kyrill cost the group 450 mln eur before tax, Munich Re said, though adding that large gains on real estate sales partly offset the storm losses.

In the first quarter the operating profit in Munich Re's reinsurance segment fell by 14.2 pct to 1.1 bln eur as the combined ratio deteriorated to 101.8 pct from 91.6 pct. Net profit in the segment declined to 798 mln eur from 841 mln.

The group's primary insurance segment increased its operating profit by 39.7 pct to 324 mln eur and its net profit by 87 pct to 258 mln eur. The combined ratio deteriorated, however, to 102.1 pct from 97.0 pct.

Munich Re's investment income through March improved to 3.161 bln eur from 2.129 bln in the same period last year.

judith.csaba@thomson.com

jcs/hjp

The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.