German reinsurer Munich Re sees 2012 profit jump as bond losses, disaster payouts fall

FRANKFURT – German reinsurer Munich Re saw profit more than quadruple last year as payouts for natural disasters fell and the company moved past losses on Greek bonds.

The company said Tuesday net profit came in at €3.2 billion ($4.16 billion) compared with last year’s €712 million. Revenue from gross premiums rose 5 per cent to €5.1 billion.

The 2011 result was hampered by losses on bonds issued by crisis-stricken Greece, which struck a deal to have creditors take less than they were owed.

Expenses for natural disasters fell to €1.3 billion from €4.5 billion in 2011. The biggest 2012 expense was Superstorm Sandy, which hit the east coast of the United States in October and cost Munich Re around €800 million.

The company said it expects profits of about €3 billion this year, and announced it would raise its dividend payout to €7.00 per share for 2012 from €6.25 per share the previous year.

Reinsurance companies write backup insurance for primary insurers so the industry can handle catastrophic losses.