MUNICH, April 26 (Reuters) - German reinsurance giant Munich Re forecast on Wednesday that it was on track to reach its profit target for 2017 despite low interest rates and falling reinsurance prices.
“A provisional estimate of business performance in the first three months of the year indicates that we are well on track to reach our profit target for 2017,” Chief Executive Nikolaus von Bomhard told shareholders at the company’s annual general.
Munich Re is aiming for profit ranging between 2 billion euros ($2.18 billion) and 2.4 billion euros this year, down from a profit of 2.6 billion euros in 2016. Munich Re plans to publish its earnings for the first quarter of 2017 on May 9.
Von Bomhard pointed to headwinds facing the company. For one, “low interest rates are cutting ever more deeply into our regular income from investments”.
He also said that the decline in prices in reinsurance had slowed but not stopped.
“At the moment, profitable growth is not at a level that can sufficiently compensate for falls in income,” he said. “Against this backdrop, the stated profit guidance is certainly ambitious.” ($1 = 0.9166 euros) (Reporting by Tom Sims; Editing by Ludwig Burger)