Hot! Munich Re's Q1 Net Loss Narrower Than Expected Reuters

Mon May 9, 2011 6:56am EDT

* Q1 net impairment 947 mln eur vs poll avg 1.06 bln loss

* Op impairment 1.35 million euros versus f'cast 1.2 thousand loss

* Expects to check out full-year profit, regardless of Q1 major claims

* Sees climbing rates with normal catastrophe, business lines

* Shares lower 1.4 pct, European insurance index lower 1.6 pct

(Adds analyst comment, background)

By Jonathan Gould

FRANKFURT, May on the lookout for (Reuters) - Munich Re (MUVGn.DE) submitted a smaller-than-expected net reduction from the initial fraction as it's levy charge dropped within the wake with devastating earthquakes throughout Japan and also New Zealand.

The the planet's most significant reinsurer acquired undoubtedly primed sales that is expected a "clearly negative" quarterly result, once pencilling with 2.7 billion euros ($3.9 billion) pertaining to healthy devastation insurance statements through disasters such as the two earthquakes in addition to flooding along with your cyclone in Australia.

"Despite these kind of devastating normal catastrophes, you can even now obtain a profit for the year or so for a whole," Chief Financial Officer Joerg Schneider said, reiterating the most recent outlook.

Munich Re experienced ditched its full-year target connected with getting about 2.4 thousand euros with online income inside wake with the really bad problems along with on Monday rejected in order to place a determine on envisioned gain the following year.

"It can be inappropriate align a lessen target," Schneider explained to a conference phone having journalists.

Reinsurers ordinarily face their major damage states inside the following 1 / 2 belonging to the year, should the North Atlantic hurricane season, which usually works from June in order to November, is in whole swing.

A worrisome group of hurricanes in fact veered off harmlessly on the Atlantic, causing U.S. coastal properties, plus insurers, unscathed. This season may just be different.

Big ruin affiliate marketer payouts in addition keep a silver precious metal lining for reinsurers and his or her insurance broker clients, simply because allow it to be better for you to justify bigger prices for guaranteeing next to risks.

Munich Re explained that injury already endured in 2010 might placed trending up pressure with costs for pure disaster plus commercial insurance, knowning that a broad increase in reinsurance charges ended up being for being predicted for any entire year.

"Altogether, (price rises) will likely end up inside the low single-digit proportion range," reported Torsten Jeworrek, Munich Re board member liable with regard to reinsurance business.

"But I are deprived of a crystal ball," he or she added.

Jeffries analyst James Shuck claimed Munich Re's prediction associated with double-digit price boosts in contract reveals for U.S. normal devastation reinsurance within the forthcoming weeks had been encouraging.

"Management created a few pretty optimistic remarks related to that history view specially on world wide lines," Schuck said within a observe to clients.

Munich Re gives you were decrease 1.4 p'cent to be able to 110.45 euros from 1052 GMT, whilst the STOXX Europe nine hundred insurance plan list .SXIP appeared to be along 1.6 percent.

PAINFUL QUARTER

The freak fraction of pure disasters this season includes criticized reinsurers inside their bread-and-butter company with delivering some sort of financial backstop for you to insurance companies struggling with large claims.

Munich Re's quarterly net reduction appeared to be 947 million euros, which was scaled-down compared to 1.06 thousand euros average associated with eight quotes in a Reuters poll of banks and brokerages.

The outcome ended up being favoured by just a taxes achieve with 612 million euros from the quarter caused from the quarterly loss. Group yucky premiums additionally rose 11.3 percentage to be able to almost 13 billion euros.

Global No. 2 gambler Swiss Re (RUKN.VX) a week ago claimed a $665 million quarterly loss, even though No. several reinsurer Hannover Re HRNGn.DE mastered to switch a wonder profit, made it simpler for with a tax kickback plus that freeing up connected with reserves accrued to pay previous claims.

The Japan, New Zealand and Australia cases as well dented profits with Warren Buffett's conglomerate Berkshire Hathaway Inc, that is certainly also a major reinsurance player.

Munich Re shares possess decreased simply by over 9 percent since Feb. 21, the morning before a new 6.3 specifications earthquake struck Christchurch, New Zealand, and also have dropped by means of 4.8 percent because the magnitude 9.0 earthquake as well as tsunami in Japan.

Data from StarMine, which will weight load analysts' forecasts in accordance with their course record, show Munich Re investing from 12.8 moments 12-month frontward earnings, a new low cost to competing Swiss Re (RUKN.VX) with a numerous associated with 14.8 but your premium for you to Hannover Re (HNRGn.DE), which will sells from your several associated with 8.4. (Editing by way of David Holmes and Mike Nesbit) ($1=.6953 euros)