Munich Re Net Profit Up

MUNICH--Germany's Munich Re AG (MUV2.XE) Tuesday reported a 9.8% rise in net profit in the second quarter, helped by substantially lower costs for severe weather damage and the absence of impairments on Greek sovereign debt that weighed on last year's results.

Munich Re, the world's largest reinsurer by premium revenue, also lifted investor hopes for topping the full-year guidance for profit and revenue, saying the results achieved between January and June put it on track for coming out slightly above its full-year goal of around 2.5 billion euros ($3.1 billion) after-tax profit, including minorities.

"With a profit of EUR1.6 billion for the first half year, we have achieved well over half of our target of around EUR2.5 billion. So we are well on track to slightly surpass the originally envisaged profit for the year," Chief Executive Nikolaus von Bomhard said.

For gross premium revenue, Munich Re now expects between EUR50 billion and EUR52 billion, up from the previous forecast of EUR49 billion to EUR51 billion range. Both higher forecasts are due to expected improvements in the reinsurance operations.

Net profit, excluding minorities, rose to EUR808 million from EUR736 million, above of a Dow Jones Newswires consensus poll of EUR685 million. Analysts had generally expected a higher tax rate.

Gross premium revenue rose 5.5% to EUR12.63 billion from EUR11.97 billion, below the forecast EUR12.56 billion

Munich Re competes with peers such as Swiss Re AG (SREN.VX), Hannover Re AG (HNR1.XE) and Scor SE (SCR.FR) for business with primary insurers seeking to spread risks on their books further.

Munich Re shares closed up EUR0.25, or 0.2%, at EUR117.60 Monday. The shares gained 27% over the past year, raising market value to EUR21.1 billion.

-Write to Ulrike Dauer at [e-mail]

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