The world's biggest reinsurer by premium revenue also said it was on track to reach full-year profit and return on investment targets, though it cut the revenue guidance due to the expected impact of negative forex translation effects.
It now sees 2014 gross premium revenues at EUR48 billion ($66.8 billion) compared with a previous guidance of EUR50 billion, as the euro remains strong against several currencies, including the dollar, the Canadian dollar and the Australian dollar. Of the target, it made gross premium revenue of EUR12.92 billion in the first three months.
Net profit fell to EUR919 million from EUR963 million in the same quarter a year ago. Analysts on average had forecast a first-quarter net profit of EUR967 million.
Last week, Chief Executive Nikolaus von Bomhard said at the annual shareholders meeting that it had guided for a first-quarter consolidated profit of about EUR900 million. The reported after-tax profit, including minorities, was now EUR924 million and compares with an after-tax profit of EUR970 million the previous year.
Munich Re also said rates for contracts up for renewal in April fell on average 8%. For the EUR2.2 billion contracts up for renewal in July, it forecasts less-severe rate declines, as these would come on top of reduced rates the reinsurer had already accepted in July 2013.
Insurers are suffering on two fronts. The protracted low-interest rate environment is eating into investment returns, while moderate disaster bills and abundant capital available in the sector makes it difficult for insurers to demand higher prices from customers.
Write to Ulrike Dauer at ulrike.dauer@wsj.com
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(END) Dow Jones Newswires
May 08, 2014 04:00 ET (08:00 GMT)
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