The world’s biggest reinsurer said yesterday it hoped to keep net profits steady at around €2.4bn (£2.05bn) in 2011, but floods and a storm in Australia, along with a devastating earthquake in New Zealand in the first quarter, posed a major threat.
The losses have already exhausted the €1bn budget pencilled in for natural catastrophe losses this year, chief executive Nikolaus von Bomhard said yesterday.
“The company will carry on but it does make reaching the profit target more difficult,” he said.
However, investment results, smaller claims and the expectation that insurance unit Ergo would earn as much as €550m (£473.1m) this year, after earning €55m in 2010, would also be important factors in the group’s full-year result.
“It is not the moment to give up the profit target,” von Bomhard said.
Munich said reaching the profit goal depended on natural catastrophe damage claims being lower than average in the remainder of the year.
Reinsurers typically face their heaviest claims in the second half, when hurricanes in the Atlantic reach their peak.
Chief financial officer Joerg Schneider said it was too early to say whether the Australia and New Zealand damage claims would cause an overall loss in the first quarter.
Munich Re shares closed down 1.39 per cent at €116.75.