German reinsurance giant Munich Re on Wednesday said it was on track to meet its full-year targets even as costly man-made disasters dragged down earnings in the second quarter. The Bavaria-based group, whose main business is helping insurers hedge themselves against possible losses, reported net profit of 724 million euros ($840 million) between April and June, down from 729 million a year earlier.
Gross premiums written - the equivalent of revenue at an insurance company - slipped 5.2 percent to 11.2 billion euros, which the group partly blamed on negative currency effects and the termination of some large reinsurance contracts.
Munich Re said it paid out 501 million euros for major man-made catastrophes - up from 187 million euros over the same period a year earlier.
The single most expensive claim "by far" stemmed from structural damage to a hydroelectric power station in Colombia.
The group also paid out 104 million euros for claims related to natural disasters, including severe thunderstorms in the United States in June.
Munich Re confirmed its 2018 outlook, sticking to its expectation of annual net profit between 2.1 and 2.5 billion euros. "We are most certainly on track to reach our profit target," chief executive Joachim Wenning said in a statement.
The company announced earlier this week that it would scale back its coal-related business activities to help the fight against climate change, following in the footsteps of other insurance giants. Munich Re said it would stop investing in shares or bonds issued by companies that generate more than 30 percent of their turnover from coal, and would no longer insure new coal-fired plants in industrialised countries.