German reinsurance giant Munich Re reported Wednesday net profits six times higher in 2018 than the year before, offering shareholders a higher dividend despite a year marked by natural disasters.
The Munich-based group, whose main business is cushioning other insurers against risk, booked net profits of 2.3 billion euros ($2.6 billion) last year — up from just 375 million in a catastrophe-plagued 2017.
Its result was slightly lower than forecast by analysts surveyed by Factset.
“We increased our profit and achieved our result target — despite the volatile capital markets and high losses from natural catastrophes in the fourth quarter,” chief financial officer Christoph Jurecka said in a statement.
Munich Re paid out around 440 million euros for losses in the devastating wildfires that struck California in the autumn, and 430 million after Typhoon Jebi struck Japan in September.
In total, the group paid out almost 1.3 billion euros for natural disaster damage in 2018, with 2.2 billion overall reimbursements compared to 4.3 billion the previous year.
Elsewhere in the group’s results, gross premiums written — the equivalent of revenue for an insurance firm — were close to flat year-on-year, at 49.1 billion euros.
Looking ahead to 2019, Munich Re said it had signed 10 billion euros of new contracts on January 1, up from 9.4 billion euros that had been due for renewal.
The group expects “that the market environment will improve in the next round of renewals in April” as contracts in countries like Japan that suffered most from last year’s disasters are rolled over.
Munich Re added that it plans to offer shareholders a dividend of 9.25 euros for last year, up from 8.60 for 2017.