25 November 2003 | Translation of the German ad-hoc announcement
Details of the Munich Re Group's figures at 30 September 2003:
Group premium income increased in the first nine months of 2003 to EUR 30.7bn (equivalent period last year: EUR 29.6bn). The operating result before tax was EUR 1,062m (as opposed to EUR 2,201m in the same period last year, although the latter figure is not really comparable because of various one-off factors). As a major part of the losses on equity investments are currently not deductible for tax purposes, the Munich Re Group made sufficient provision in the second quarter for a potential tax burden, whose exact amount for the life and health insurers in the Group will depend on the outcome of the current German legislation process. In addition to the after-effects of the stock market slumps of the previous quarters, this tax provision impacted the Group's post-tax result of -EUR 451m (3,239m).
Outlook for 2003 as a whole:
Underwriting profits and value appreciation in the investment portfolio increased shareholders' equity in the first nine months by EUR 1.0bn to EUR 14.9bn (end of 2002: EUR 13.9bn). Since then there has also been the capital increase with which Munich Re broadened and optimised its capital base in October and November.
The Group result for 2003 will be subject to countervailing influences:
On the one hand, it will be burdened by the writedowns and losses on disposals and by the high provision for tax. On the other hand, the good performance of the underwriting business will distinctly improve the earnings position. Assuming normal claims experience and stable capital markets, Munich Re expects to record a post-tax loss for the year 2003 purely due to the non-deductibility of a large portion of the writedowns and losses on the disposal of shares. The Group anticipates that the pre-tax result will show a very clear profit.
Details of the Munich Re Group's reinsurance, primary insurance, investments, outlook for the business year 2003 as a whole and table of the Group's key figures for the first nine months of 2003 (IFRS) are contained in the press release that will be published directly after this ad-hoc announcement.
This ad-hoc announcement, in particular the outlook for 2003, refers to statements relating expressly and implicitly to the future and contains words such as "expect", "believe", "assume" and other similar expressions. Such forward-looking statements are based on current expectations, estimates, forecasts and prognoses concerning the development of the market as well as management estimates and assumptions. Such forward-looking statements are no guarantee that events or results will actually materialise in the future and are subject to risks, uncertainties, assumptions and other factors that could lead to actual events or results deviating substantially from those anticipated in these forward-looking statements. Other factors include in particular catastrophes that could lead to extraordinary loss burdens as well as considerable price changes on the capital market, namely share price changes which may have an impact on the financial situation of the Munich Re Group.