Munich Reinsurance Co. on Tuesday reported profit for the fourth quarter of 2013 of €1.2 billion ($1.65 billion) compared with €500 million ($659.8 million) for the same period in 2012.
The company posted gross written premiums of €12.5 billion ($17.18 billion) for the fourth quarter of 2013, down from €12.9 billion ($17.02 billion) recorded in the fourth quarter of 2012.
Investment income for the fourth quarter of 2013 was €2.0 billion ($2.75 billion) compared with €2.2 billion ($2.90 billion) for the same period in 2012.
For reinsurance, Munich Re's combined ratio in the fourth quarter of 2013 was 89.2% compared with 83.2% for the last three months of 2012.
For all of 2013, Munich Re posted a profit of €3.3 billion ($4.54 billion), up from €3.2 billion ($4.22 billion) for 2012.
Munich Re said those preliminary results had been boosted by lower-than-expected claims for property/casualty reinsurance, among other things.
Its 2013 investment income was €7.7 billion ($10.58 billion), down from €8.4 billion ($11.08 billion) in 2012, Munich Re said. Gross written premiums for 2013 were €51.1 billion ($70.24 billion), down from €52.0 billion ($68.61 billion) in 2012.
For its reinsurance business, Munich Re said that it posted a profit of €2.8 billion ($3.85 billion) for the full year compared with €3.1 billion ($4.09 billion) for 2012.
The company said its reinsurance result had been affected by the lower investment yield, among other factors.
The combined ratio for the reinsurance segment in 2013 was 92.1%, Munich Re said, compared with 91.0% for 2012.
Munich Re said natural catastrophes cost €764 million ($1.05 billion) in 2013, down from €1.3 billion ($1.72 billion) the previous year.
The two largest losses in 2013 were floods in Central Europe in the summer, which cost €178 million ($244.7 million), and hailstorms in Germany in June and July that caused claims of €174 million ($239.2 million).
Munich Re said that at the Jan. 1, 2014, property/catastrophe reinsurance treaty renewals, market competition became “even keener” than it had been in the previous year.
The company said that there was “ample capacity” available at Jan. 1, derived in part from nontraditional sources such as pension funds.
Slightly more than half of Munich Re's nonlife reinsurance business was up for renewal, representing premium volume of about €8.7 billion ($11.74 billion), the company said. It did not renew about 12% of this volume, partly because the business concerned no longer fitted its profit requirements, it said.
Overall, rates for renewal business at Jan. 1 fell by an average 1.5%, Munich Re said.
“We think this will have positively surprised the market in light of the negative commentary from broker reports at the beginning of the year,” said analysts at Berenberg Bank in a briefing note Tuesday.
Munich Re said it expected pricing pressure for property/catastrophe business at the April and July renewals to “remain very appreciable” unless any major losses occur.