German reinsurance giant Munich Re's net profit of 3.1 billion euros was down 1.4%
Frankfurt - AFP
German reinsurance giant Munich Re on Wednesday announced plans to buy back around one billion euros ($1.1 billion) of its own shares and unveiled "ambitious" new earnings targets for the current year.
"Although 2015 was not an easy year, Munich Re was able to generate a profit of 3.1 billion euros ($3.4 billion), thus beating the announced target for the year," chief executive Nikolaus von Bomhard said.
"Thanks to our capital strength and conservative underwriting and reserving policies, we are able to post gratifying results even in a difficult market environment."
The net profit of 3.1 billion euros was down 1.4 percent from the preceding year.
Underlying or operating profit, on the other hand, jumped by 19.7 percent to 4.8 billion euros and gross premium income grew by 3.1 percent to 50.4 billion euros.
Looking ahead to the current year, von Bomhard said Munich was "aiming for a consolidated result of 2.3?2.8 billion euros for 2016."
This was "an ambitious target ... on account of continuing low interest rates and intensive competition in reinsurance," the CEO said.
Last year, the group had seen "below-average expenditure for natural catastrophe claims" and it could not expect to see a repeat of that this year, he cautioned.
Munich Re also announced a further share buy-back programme under which it would repurchase "up to one billion euros" in shares by the 2017 annual general meeting."
"This buy-back is also conditional on no major upheavals occurring in the capital markets or in our underwriting business," it said.
On the basis of the current share price, Munich Re would repurchase around 5.4 million shares, or approximately 3.2 percent of the share capital.
A buy-back programme is currently in progress and will be completed by the 2016 annual general meeting. Under that programme, the acquired shares would be retired, Munich Re said, adding that "so far, around 5.2 million shares with a value of approximately 890 million euros have been purchased under this programme."
Von Bomhard, who announced on Tuesday that he would step down next year after 13 years on the job, said that Munich Re would increase its dividend payout to shareholders to 8.25 euros per share for 2015 from 7.75 euros for 2014.