Munich Re shares fall as flooding hits first half profits
The world’s biggest reinsurance company Munich Re has reported a 4.5 per cent fall in first half profits to €1.5bn (£980,000) as it was hit by claims from natural disasters in the second quarter of the year (release). Share prices are down around 4.5 per cent.
Net income fell to €529m from €808m in the same period a year before, falling short of the €557.1m expected. Earnings per share fell 6.3 per cent to €8.38. However, the €1.5bn profit means chief executive Nikolaus von Bombard is confident the group can get close to its full-year earnings target of €3bn.
Flooding was the primary driver behind major losses, which rose to €605m from €452m. Losses from natural catastrophes, meanwhile, totalled €338m – €314m of which occurred in the second quarter.
Speaking at an investor conference after the results were announced, the company estimated the costs to the insurance industry from the sinking of cruise liner Costa Concordia will top $1.1bn. The ship itself had a value of $500m. Munich Re has raised its projections for its own share to €100m from €80m previously.