Munich Re and Swiss Re eye up investor returns

MUNICH Re and Swiss Re, the world’s biggest reinsurance groups, yesterday reported falling profits but pledged to return money to shareholders.

German reinsurer Munich Re unveiled plans to buy back up to €1bn (£624m) of its own shares in the coming months, hoping to cheer investors after a fall in third-quarter earnings.

The firm said net profit was down 44 per cent to €637m in the period, which saw premiums and income from investments both fall by around five per cent.

Meanwhile Swiss Re said it was open to paying a special dividend after net profit fell less than expected.

Net profit tumbled 50 per cent to $1.1bn, due to the one-off gain recorded in the prior-year quarter from the sale of Admin Re’s US business.

“Further capital management measures such as a special dividend are possible but no decision will be made until we have finalised our year end results,” Swiss Re financial chief George Quinn said in a statement.

The company said its combined ratio, an insurance industry measure of profitability weighing payouts against premium income, was 80.9 per cent in its property and casualty arm, despite a number of large losses including the hail storms in Germany in July.

Swiss Re has also said it expects natural catastrophe pricing rates to stabilise in 2014 after a decline this year.