Munich Re sees profits falling in 2015

GMT 10:34 2015 Wednesday ,11 March

Arab Today, arab today Munich Re sees profits falling in 2015

Munich Re
Frankfurt - AFP

German reinsurance giant Munich Re said Wednesday it expects net profit to decline this year as a result of record low interest rates.
Munich Re said in statement it projects a net profit of 2.5 to 3.0 billion euros ($2.7 to 3.2 billion) this year, after already falling by 4.6 percent to 3.2 billion euros last year.
"The comparatively wide spread of the result guidance is due to the unchanged high level of political and economic uncertainty," said chief executive Nikolaus von Bomhard.
"The flood of liquidity in important markets means that Munich Re must expect declining returns on its investments again in 2015," he said.
Insurers are suffering from the current record low interest rates in Europe, as well as fierce competition.
In the face of this development, Munich Re is trying to diversify its investments, von Bomhard said.
"Both the capital markets and the reinsurance markets will remain challenging in 2015. Munich Re expects the fierce competition to continue," he added.
Nevertheless, Munich Re sees potential for growth "from a geographical perspective, as in the booming regions of Asia," the company said.
Munich Re is also eyeing the insurability of risks that are not yet, or not yet adequately, covered in the market, such as the risks of cyber attacks, business interruption, or damage to reputation, it said.
Separately, Munich Re announced a further share buyback programme.
By the annual general meeting in April 2016, it plans to buy up to 1.0 billion euros worth of shares via the market.
"The buyback is conditional on no major upheavals occurring in the capital markets or in its underwriting business," the company said.
On the basis of the current share price, around 5.3 million shares, or approximately 3.1 percent of the share capital, will be bought back.
Under an ongoing share buyback, around 5.6 million shares worth 905 million euros are expected to be bought back by April 23.

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