Munich Re says on track to meet full-year profit forecast

FRANKFURT: German reinsurance giant Munich Re posted a net profit of 733 million euros ($860 million) in the second quarter and said it was on track to meet its profit target for the year.

The 25 percent decline in quarterly profit from 974 million during the same period last year was less severe than analysts had expected and was partly helped by fewer natural catastrophes in the quarter.

Joachim Wenning, chief executive officer, said on Wednesday that the company is "well on track" to reach its profit guidance of between 2 billion and 2.4 billion euros.

"We have the right strategy, and we can concentrate on implementing that strategy by writing profitable new business," Wenning said.

In recent years, the insurance sector has been under extreme pressure from low prices caused by fierce competition and low interest rates that erode profit.

Munich Re also said it was lowering its forecast for its life and health reinsurance business from 450 million euros to 400 million.

At the same time, Munich Re raised its full-year forecast for its Ergo primary insurance segment due to lower expenses to a range of between 200 million euro and 250 million euros, compared with a range of between 150 million and 200 million earlier.