Munich Re results beat forecasts

REINSURANCE giant Munich Re has reported a 14 per cent rise in second-quarter net profits, up to &euro;691m (&pound;588m) from &euro;608m in the same period last year.<br /><br />The world&rsquo;s biggest reinsurer beat forecasts on the back of solid growth in premiums, strong investment returns and a one-off gain from the sale of a stake in British insurer Admiral.<br /><br />&ldquo;We regard the effects of the economic crisis as limited in extent for the Munich Re Group,&rdquo; Munich Re Chief executive Nikolaus von Bomhard said in a statement.<br /><br />The company said it was still giving priority to growth but it may resume share buybacks in the second half of the year depending on the market outlook and economic conditions. It had suspended buybacks in April in view of the crisis.<br /><br />Munich Re&rsquo;s investment income rose by almost 40 per cent to nearly &euro;2.2 bn in the second quarter.<br /><br />It raised its equity holdings slightly to two per cent of group investments by June 30 from 1.7 percent at end-December.<br /><br />&ldquo;Given the volatile capital market environment, we preferred to deploy our financial capacity to cover insurance and reinsurance risks rather than speculate on cyclically fragile stock market rallies,&rdquo; said Chief financial officer Joerg Schneider.