MUNICH RE reported much stronger-than-expected earnings in the second quarter, bolstered by surging investment income that offset hits from damage claims such as the sunken Deepwater Horizon oil rig in the Gulf of Mexico.
The world’s biggest reinsurer reported quarterly net profit of €709m (£588m), which was above the highest forecast of €570m and well above the average forecast for net profit to decline to €481m.
Munich Re said it was sticking to its full-year goal of achieving net profit of more than €2bn.
“Following the major losses in the first half-year, this target remains ambitious, but given normal loss experience and continued strong investment results it is certainly achievable,” the company said in a statement yesterday.
Analysts had expected Munich Re to fall short of its 2010 profit goal, with a major worry being the outcome of this year’s hurricane season, which enters its most active period in the second half of the year.
Munich Re’s shares, which were seen as a defensive investment during the financial crisis, are now flat compared with the start of the year, lagging a three per cent rise in the Stoxx 600 European insurance index.
City A.M. Reporter