FRANKFURT (Reuters) – Munich Re <MUVGn.DE>, the world’s largest reinsurer, said on Wednesday that net profit in the second quarter was roughly flat, beating expectations despite some big claims.
Chief Executive Officer Joachim Wenning said the company was “most certainly on track” to reach its full-year profit target of 2.1 to 2.5 billion euros ($2.44 bln-2.91 bln).
Net profit was 728 million euros, down only slightly from 733 million euros a year ago. Analysts had forecast a steeper decline.
Major man-made losses in the quarter were 501 million euros (£449.6 million), up from 187 million a year ago, dominated by structural damage to a hydroelectric power station in Colombia.
That pushed up the combined ratio, a key measure of profitability, to 102 percent from 93.9 percent in the quarter, but Munich Re said that it was on track for a 97 percent ratio in the full year 2018. Readings below 100 indicated profitability.
Munich Re and the insurance industry are bouncing back from a series of major hurricanes, fires and earthquakes in North America in 2017, the costliest year ever for the industry.
Prices that reinsurers can charge customers have been under pressure for years amid intense competition. Last year’s natural catastrophes have helped put a floor on prices.
Prices during the July renewal round of its reinsurance business rose 0.9 percent, Munich Re said, and the premium volume was up 42 percent.
(Reporting by Alexander Huebner and Tom Sims; Editing by Victoria Bryan and Maria Sheahan)