Munich Re, the world's second-biggest reinsurer, said it turned in record profits in 2005 as one-off gains from divestments helped offset the financial burdens of claims related to devastating hurricanes in the US.
Munich Re said in a statement today that net profit amounted to €2.743 billion in 2005, an increase of 45% from the €1.887 billion booked in 2004.
Despite the unprecedented series of deadly hurricanes, Munich Re booked profit from its reinsurance activities alone of €1.4 billion, 'thanks to our very solid basic business and our excellent investment result,' the company said.
An important factor in the 'greatly improved investment result' were the capital gains from Munich Re's decision to cut back its shareholdings in Allianz and Commerzbank, the sale of its stakes in MAN and Karlsruher Versicherung and the exchange of its shares in HypoVereinsbank into UniCredit stocks.
The return on equity - a key profitability yardstick - stood at 12.3%, slightly higher than Munich Re's own target of 12%. Gross premium income edged up by 0.3% to €38.199 billion.
Looking ahead to the current year, Munich Re said it was forecasting gross premium income of €37-38 billion and net profit of €2.6-2.7 billion.
