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Munich Re Posts E1.1b First Half Profit

Due to broad diversification of products across business fields and regions

German insurance company, Munich Re Group has posted financial results for first half (H1) of 2009. In the first six months, it recorded an operating income of E2.11 billion, of which E1.37 billion was earned in Q2.

The investment result remained stable at E3.6 billion, increasing by 8.9% over H1 2008. This represents a return on investment of 4% for the company.

The H1 profit totalled E1.12 billion, whilst the consolidated result for Q2, 2009 came to E703 million (up 11.9% over Q2, 2008).

As from the first quarter of 2009, Munich Re has applied the new accounting standard IFRS 8, thus gearing its segment reporting more closely to its internal reporting and management structure.

Primary insurance returned to the profit zone in Q2, but the results for H1 as a whole suffered from the consequences of the financial crisis. The operating result totalled E292 million, of which E215 million were derived from Q2. The consolidated H1 result for the primary insurance segment was E9 million.

In the Life segment, total premium income rose to E3.8 billion, Q2 accounting for E2 billion. In the Primary Health Insurance segment, premium income climbed by 3% to E3.1 billion in the first half.

In the reinsurance business, due to its broadly diversified, profitable business and a solid investment result of E2.007 billion, Munich Re was able to post an operating result of E2.004 billion, despite a number of major losses, with E1.153 billion coming from Q2.

Nikolaus von Bomhard, chairman of the board of management, stated: We were able to benefit further from our capital strength and exploit our scope for profitable growth. We regard the effects of the economic crisis as limited in extent for the Munich Re Group. In reinsurance, you need to be more than just solid and financially strong: our clients want flexible, innovative solutions from us, based on our expertise. We have laid the foundations for this over the past two years. Now we can deliver.

In primary insurance, ERGO returned to the profit zone in the second quarter. Thanks to our consistent accounting policy, we can look ahead with confidence. In Germany, ERGO is on track. It is evident that we are faring well with the broad diversification of our business across business fields and regions, he added.