Munich Re said it had "drawn a line under three difficult years" caused by falling stock market prices.

Even so, the insurance group posted a loss of ¤434m (£289m) for its 2003 operations.

In its full year results for 2003, the group said its underwriting profit had increased to ¤2bn, with gross premium income of ¤40.4bn, up from ¤40bn in 2002.

The combined ratios improved sharply, said Munich Re, with the ratio for reinsurance falling to 96.7% and the ratio for primary insurance falling to 96.4%.