Munich Re posted year-over-year declines in second-quarter and first-half profits but said it is on track to reach its full-year profit guidance of €2.0 billion to €2.4 billion.
The company reported second-quarter consolidated profit attributable to equity holders of €729 million under International Financial Reporting Standards, down 25.1% from a year ago.
EPS dropped to €4.71 from €6.05 a year earlier. The S&P Capital IQ consensus normalized EPS estimate for the quarter based on four analysts' reporting was €4.31.
The company said the "sound" result was driven by a high investment result and a below-average random incidence of major losses, which were offset by currency translation losses resulting from the increase in the value of the euro.
Munich Re's reinsurance business booked a second-quarter result of €629 million, compared to the year-ago €991 million. The property and casualty reinsurance unit contributed €517 million to the total, down from €778 million a year earlier, while the life and health reinsurance division's result declined to €112 million from €213 million.
The combined ratio in the P&C reinsurance division was 93.9% for the quarter, compared to 99.8% a year earlier; for the first half, the figure was 95.5%, compared to the year-ago 94.3%. The group is targeting a combined ratio in the P&C reinsurance division of approximately 97% for the full year.
The group's gross premiums written for the quarter dipped on a yearly basis to €11.80 billion from €11.93 billion. Net earned premiums also ticked down, to €11.77 billion from €11.81 billion.
Net expenses for claims and benefits amounted to €9.51 billion, down from €10.07 billion in the second quarter of 2016.
The group's investment result fell year over year to €1.89 billion from €2.75 billion, while the technical result came in at €762 million, up from the year-ago €529 million.
Insurance arm ERGO Group AG, meanwhile, recorded a "higher than-expected" second-quarter result of €104 million, compared to the year-ago loss of €17 million, on the back of a tax credit.
For the first half, attributable profit declined 8.6% to €1.28 billion from €1.40 billion a year earlier.
"Both the quarterly result and the half-year result are very pleasing overall," said Joachim Wenning, chairman of the management board. "We have the right strategy, and we can concentrate on implementing that strategy by writing profitable new business."
The company noted that the 2016 figures have been adjusted owing to a change in the composition of the reporting segments.