But reinsurer still announces €1bn share buy-back programme
Munich Re has reported an operating profit of €4.4bn (£3.7bn) for 2013, down 17% compared with the €5.3bn in 2012.
This fall in performance was driven by a low interest rate environment and adverse effects of currency exchange rates.
Gross written premium at the reinsurer also fell during the year, down 1.7% to €51.1bn from €52bn the previous year.
Despite this dip in performance, chief executive Nikolaus von Bomhard said the company was well placed to respond to the ongoing low interest rate environment after strengthening its capital base in 2013.
“The result for 2013 is an indication of how we have positioned ourselves competitively – we have strategically prepared Munich Re for foreseeable challenges, which we can now tackle from a position of strength,” he said. “We have done our homework in recent years. Our capital base is more than solid; in reinsurance we are committed to solution-finding competence.
“We are aiming for a consolidated result of €3bn in 2014,” he added.
The reinsurer has also announced a further €1bn share buy-back programme.
Von Bomhard said: “With this share buy-back, we are again paying out currently unneeded earned capital to shareholders. Our good capitalisation enables us to continue taking selective advantage of opportunities for profitable growth in individual regions and classes of business. At the same time, it supports the discipline that is so important to us when underwriting risks.”
This latest programme means the reinsurer has bought back €6.8bn worth of shares since 2006.