FRANKFURT (Reuters) - Munich Re (MUVGn.DE), the world’s largest reinsurer, said on Tuesday it expected its 2018 profit to come near the upper end of its target range after posting a 48 percent jump in first-quarter profit.
Munich Re has posted declines in profit over the past five years but is counting on a reversal in fortune this year.
It stuck to its broader guidance for 2018 consolidated net profit of 2.1 to 2.5 billion euros ($2.50-2.98 bln), but in a call with journalists, finance chief Joerg Schneider said he was “very confident that profit would land at least the upper end of the range”.
That more optimistic outlook followed an increase in first-quarter net profit to 827 million euros, from 557 million during the same period last year, as the company bounces back from record payouts for natural disasters in 2017.
Last year, Munich Re eked out a small profit after a spate of hurricanes and other natural catastrophes in North America prompted record claims to insurers across the industry.
Major losses in the first quarter totalled 62 million euros, down from 403 million a year ago. “It was thus significantly below our major-loss projection,” Munich Re said.
Prices that reinsurers can charge customers have been under pressure for years amid intense competition. Last year’s natural catastrophes have helped put a floor on prices.
Munich Re said that prices increased 0.8 percent during the April period of contract renewals.
Reporting by Tom Sims; Editing by Maria Sheahan