The firm put a positive gloss on the results, saying the preliminary figures demonstrated Munich Re’s resilience despite exceptional major losses and burdens from the financial crisis.
Weather-related catastrophes and a series of severe earthquakes were the hallmark of 2011 for the insurance sector.
Munich Re’s CFO Jörg Schneider summed up the provisional figures:
“We have never experienced a year like 2011 before – extreme burdens from natural catastrophes combined with the financial crisis, which flared up again after the slight recovery in 2009 and 2010. Given the huge strains these placed on results, it is a notable achievement that we still posted a profit of €0.71bn.”
Jörg Schneider continued:
“Our shareholders are to benefit from this resilience shown by our Group. With the proposed dividend of €6.25 per share, we are maintaining our attractive dividend policy.” Schneider emphasised that the decision on dividend payments was always dependent on the concrete development of results and the Group’s capital situation:
“Our solid capital situation enables us to again pay out a total of €1.1bn to our shareholders.”
There have not been any cuts in Munich Re’s dividend since 1969 and the firm said it was expecting significantly improved results for 2012.
According to Munich Re’s estimates, insured losses from natural catastrophes worldwide totalled US$ 105bn - even higher than in the previous record year 2005.
Flooding caused largest loss at end of 2011
Munich Re’s largest loss in the fourth quarter 2011 was the flooding in Thailand, with claims costs of around €0.5bn.
Torsten Jeworrek, member of the Board of Management and Munich Re’s Reinsurance CEO commented:
“The consequences of these floods again demonstrate the vulnerability of the globalised economy. When catastrophes of this magnitude hit key industries, there are global effects on supply chains. And the risk of companies suffering financial losses due to disrupted supply chains has grown strongly in recent years."
“Much greater transparency of supply chains is essential both for companies’ risk management and for their insurers.”
Munich Re is expecting that its next renewals at 1 April 2012 (mainly Japan and Korea) and 1 July 2012 (especially parts of the US market, Australia and Latin America) will have a greater proportion of natural catastrophe business than the January renewals. The firm is projecting further price increases here, particularly in loss-affected regions.
