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28 November 2002 | Translation of the German ad-hoc announcement

Munich Reinsurance Company

First nine months of 2002:

Despite loss of Euro 859m in third quarter, high profit of Euro 3.2bn achieved owing to positive net balance of realized capital gains, additional reserving for US business, and writedowns on investments. For the year 2002 as a whole, prospect of allocation to reserves and unchanged dividend.

Details of the Munich Re Group's figures:
Group premium income was up by nearly 15% from Euro 25.8bn to Euro 29.6bn. This growth was attributable mainly to the dynamic performance of the Group's reinsurance business. Consolidated net income amounted to around Euro 3.2bn at 30th September 2002 (compared with Euro 85m in the comparable period of 2001, which was burdened by the terrorist attack of 11th September), and earnings per share increased from Euro 0.48 to Euro 18.25, particularly as a consequence of capital gains from the shareholding transactions with Allianz. As expected, the net income of around Euro 3.2bn for the first nine months has been significantly influenced by capital gains realized in the first half of the year, by the strengthening of provisions for its US business in the second quarter, and by writedowns on securities in the second and third quarter.

Positive overall result expected for 2002
For the business year 2002 as a whole, with further organic growth, Munich Re expects premium income to show an increase of 10% to Euro 40bn, due especially to the price improvements (some substantial) in all business sectors. The overall result for 2002 will be largely influenced by the above-mentioned effects from the first half year: realized capital gains of Euro 4.7bn, expenditure for additional reserves for US business and the WTC loss totalling US-Dollar 2.5bn (equivalent to Euro 1.8bn after tax), and the writedowns on equities of Euro 4.3bn which had an impact of Euro 2.0bn on the Group result for the first nine months. The overall net result for the year will be higher than that of last year (Euro 250m). Barring any exceptional developments before the end of the year, the Board of Management will propose allocating an amount to the revenue reserves and paying a dividend of Euro 1.25 per share, as in the two previous years.

The publication of the detailed press release will follow directly after this ad-hoc-announcement.

Munich, 28th November 2002
Munich Reinsurance Company – Board of Management