Munich Re says its Property & Casualty (P&C) reinsurance combined operating ratio widened to 86.5% in the first quarter, from 77% a year earlier, on higher than expected natural catastrophe losses.

Net profit fell 14% from a year earlier to €1.27 billion ($2.06 billion) while revenue jumped to €14.31 billion ($23.24 billion), from €13.3 billion ($21.6 billion) a year earlier.  

Losses were driven by a catastrophic earthquake in Turkey in February in which around 60,000 people died. Munich Re’s insured losses from the event are around €600 million ($974.56 million), though it maintained an annual net profit target of €4 billion ($6.5 billion).    

“The chances for us to surpass this target have increased,” CFO Christoph Jurecka said, adding the quarter had been “otherwise pleasing”.  

At the April renewals, Munich Re said it achieved premium growth of 11% and rate increases of 4.7%. 
Non-proportional natural catastrophe business was expanded "in view of attractive rate levels,” and “prices developed positively overall and for the most part more than compensated for the significantly higher loss estimates in some areas, which were caused primarily by inflation or other loss trends.”        

“Munich Re expects the market environment to remain positive and to present attractive growth opportunities in the upcoming July renewal rounds,” it said.      

First-quarter P&C reinsurance net profit fell 21% to €760 million ($1.23 billion) as natural catastrophe losses almost doubled to €870 million ($1.41 billion). Including run-off from previous years, major losses totalled €1.035 billion ($1.68 billion).