Global reinsurer MUNICH Re has reported FY2017 profit of EUR 392 million (vs. EUR 2.58 billion  ayear before), while the operating result declined to EUR 1.24 billion (vs. EUR 4.03 billion) as a result of high NatCat losses from Hurricanes Harvey, Irma and Maria.

At the same time, the group's FY2017 GWP increased slightly when compared with the previous year, to EUR 49.11 billion, and equity declined by roughly EUR 3.6 billion to EUR 28.2 billion (vs. EUR 31.8 billion).

MUNICH Re announced, subject to approval by the Supervisory Board and Annual General Meeting, the company will pay a dividend of EUR 8.60 per share, as in the previous year.

"Our dividend is reliable. Thanks to our capital strength, we were able to well withstand the high losses from natural catastrophes. In 2018, we will be pressing ahead with the digital transformation of MUNICH Re, and also seizing opportunities for profitable growth in traditional business. Reinsurance prices improved slightly in large sections of the market at the January renewals - a trend likely to strengthen in coming renewal rounds," said Jorg SCHNEIDER, CFO.

The reinsurance field of business contributed EUR 120 million (vs. EUR 2.54 billion) to the consolidated result in 2017, while the operating result  fell from EUR 2.92 billion to EUR 73 million. Gross premiums written increased slightly to EUR 31.57 billion from EUR 31.46 billion.

Life and health reinsurance contributed EUR 596 million (vs. EUR 515 million) to the consolidated result. The technical result, including the result from business that is not recognised in the technical result owing to insufficient risk transfer, was EUR 428 million (vs. EUR 561 million). "Thanks to a strong technical result in the fourth quarter, life and health reinsurance fell only slightly short of its target of EUR 450 million for 2017 as a whole - despite the result being impacted by the recapture of loss-making portfolios in the USA in the second and third quarters".

The German-based reinsurer said  the result in property-casualty reinsurance fell to EUR - 476 million (vs. EUR 2.03 billion), while the FY2017 combined ratio amounted to 114.1% (95.7%) of net earned premiums, and totalled 103.9% (101.9%) for the fourth quarter. "MUNICH Re was able to release loss reserves (adjusted for commissions) of approximately EUR 870 million for the full year; the figure for the fourth quarter was around EUR 130 million. This corresponds to 5.2% of the combined ratio for the full year, and 3.1% for the fourth quarter. MUNICH Re still aims to set the amount of provisions for newly emerging claims at the top end of the estimation range, so that profits from the release of a portion of these reserves are possible at a later stage".

Total major-loss expenditure for 2017 amounted to EUR 4.31 billion (vs. EUR 1.52 billion), of which EUR 493 million ( vs. EUR 622 million) was attributable to the fourth quarter. "The major-loss burden amounted to 25.8% (9.1%) of net earned premiums, and was thus well above the average expected figure of 12% for the full year; it totalled exactly 12% in the fourth quarter".

Natural catastrophe losses amounted to EUR 3.68 billion (vs. EUR 929 million) for the full year, while the figure for the fourth quarter was EUR 492 million (EUR 460 million). Hurricanes Harvey, Irma and Maria - with a total loss of EUR 2.7 billion - were the most expensive loss events of the year.

Man-made major losses were slightly above the level of the previous year, and totalled EUR 636 million (vs. EUR 613 million) - which is equivalent to 3.8% (3.6%) of net earned premiums. In the fourth quarter, expenditure for new major losses and the release of provisions for major losses in prior years balanced each other out.

In primary insurance field - ERGO reported a profit of EUR 273 million (vs. EUR 41 million in 2016). MUNICH Re said ERGO "exceeded the profit guidance raised in August to a range of EUR 200-250 million. A significantly improved technical result in Germany and abroad and lower expenditure contributed to this gratifying result".

In terms of GWP, ERGO increased slightly to EUR 17.5 billion from EUR 17.4 billion in 2016. The combined ratio for German property-casualty insurance was 97.5% (97.0%) for the full year, and amounted to 100.3% (100.0%) in the fourth quarter. The combined ratio for the ERGO International segment improved to 95.3% (98.0%) for the full year, mainly on account of good developments in Poland, and 94.7% (100.2%) for the fourth quarter.