10 August 2018 13:30
The reinsurer Munich Re has posted a net profit of 1.6 billion euros (€) in the first half of 2018, an increase of 20.5 % compared to net income of 1.3 billion€ registered in the same period of the previous year. On the other hand, the net income for the second quarter declined slightly, from $ 733 M€ in 2017 to 728 M€ this year.
The chairman of the board of directors of Munich Re, Joachim Wenning, welcomes these outcomes. “With a profit for the first half of the year of 1.6 billion euros, we are on track to achieve our target profit of 2.1 billion€ 2.5 billion€ for the year. We have also made progress vis-à-vis the implementation of our strategy : Munich Re becomes more profitable, more digital and more lightweight. “
Lower premiums in life reinsurance
The gross premiums written in the life reinsurance business have also fallen from 25.3 % for the first half of 2018 compared in the area of life reinsurance, to $ 5.17 G€. A fall of 32.8 % was recorded in the second quarter of 2018, up from 3.44 G€ to the same period in 2017 2.31 G€ in 2018.
Munich Re has justified these cuts by the expected end of an important treaty at the end of 2017 and a change in the structure of reinsurance of another important treaty during the first six months that took effect retroactively at the beginning of the year.
The subsidiary, however, saw a leap in net income was 87.3 % in the first half and of 155.6 % in the second quarter. It has amounted to, respectively, 444 Million and€ 285 M€, an increase of 237 M€, and€112 Million.
Different Situation in non-life reinsurance
It is, however, the opposite was observed in non-life reinsurance, which has helped offset the underwriting results of the area of life reinsurance. In the first half of the year, gross premiums written increased from 8.78 to G€ 9.94 G€, an increase of 13.2 %. For the second quarter of 2018, they are passed 4.22 G€ 4,62€ B, a positive variation of 9.5 %.
The sector thus recorded an increase of 7.9% in net income for the first quarter to 925 M€. However, it has fallen from 35.3 % in the second quarter, rising to 517 M€ in the second quarter of 2017 to 335 M€ for the same period of 2018.
Rate increase for renewals
The renewal period of January 1, and April 1, have seen rates increase, especially in markets affected by natural disasters, says Munich Re. The two periods show increases rate of approximately 0.8 %. The premium volume increased 19 % in the first round to reach 9.9 G€, and 8.1 % in the second round to rise to 1.6 billion€.