German reinsurer Munich Re announced a sharp increase in net income for the second quarter on Wednesday, due to fewer global natural disasters, but the company kept its annual forecast unchanged. In April-June, the Munich-based reinsurer - which backs up insurance firms against the risks they run - posted a net income of 992 million euros ($1.1 billion), the highest in four years, up from 723 million euros last year.
The higher figure beat a 903 million prediction from analysts surveyed by Factset. Munich Re's operating or underlying profit amounted to 1.57 billion euros, up 57 percent year-on-year.
The 2018 figure was weighed down by high reimbursements linked to damage from natural and man-made disasters. Over the past quarter, the reinsurer had to spend 202 million euros on claims in excess of 10 million euros, mainly related to tornadoes and major storms in the United States, compared with a charge of 605 million over the same period last year.
In its direct insurance division Ergo, profit increased to 135 million euros for the quarter, driven by the life and health insurance branches. On the damage side, costs mainly stemmed from violent hailstorms that struck Germany earlier in the year.
Across the group, premium income totalled 11.8 billion euros, up 5.5 percent year-on-year, thanks to the reinsurance business. "We are of course very pleased to report the highest quarterly profit in the last four years," said CEO Joachim Wenning in a statement.
The group is still on track to achieve a net profit of 2.5 billion euros this year and 2.8 billion in 2020. For gross premium inflows, the equivalent of turnover in the insurance sector, it still targets 49 billion euros in 2019.