The FINANCIAL — Munich Re is aiming for a profit of €3bn in 2014. CEO Nikolaus von Bomhard is optimistic about the further development of the Group’s business in 2014. Munich Re closed 2013 with a profit of €3.3bn – the third-best result in the Company’s history, according to Munich Re.
Subject to approval by the Annual General Meeting, the shareholders are to participate in this via an increased dividend of €7.25 (7.00) per share. In addition, Munich Re announced another share buy-back: shares with a volume of up to €1bn are again to be repurchased before the Annual General Meeting in 2015.
“The result for 2013 is an indication of how we have positioned ourselves competitively – we have strategically prepared Munich Re for foreseeable challenges which we can now tackle from a position of strength,” said Nikolaus von Bomhard, CEO. These challenges included the lingering low-interest-rate environment, increasing competition in reinsurance, and changes in demand from clients in primary insurance.
“We have done our homework in recent years. Our capital base is more than solid, in reinsurance we are committed to solution-finding competence, and in primary insurance we are bringing a visionary concept to the German market with our new generation of life insurance products. We want our shareholders to participate in Munich Re’s success. The Board of Management and Supervisory Board will thus propose to the Annual General Meeting to increase the dividend to €7.25 per share," said von Bomhard.
“We are aiming for a consolidated result of €3bn in 2014,” he said. This is an ambitious objective, he indicated, given the parameters: Munich Re is reckoning in particular with a continuation of the low interest-rate levels in 2014 and hence with somewhat lower regular income from investments. In addition, a normal tax burden is expected again for 2014, after Munich Re posted a very low effective tax rate in 2013 due to the recalculation of tax for prior years and the utilisation of loss carry-forwards. “The quality of our core business allows us to formulate this ambitious result target,” said von Bomhard.
Munich Re has announced a further share buy-back programme: before the Annual General Meeting on 23 April 2015, shares with a volume of up to €1bn are to be repurchased. The buy-back is conditional on no major upheavals occurring on the capital markets or in underwriting business. On the basis of the current share price, the buy-back would involve around 6.6 million shares or approximately 3.7% of the share capital. “With this share buy-back, we are again paying out currently unneeded earned capital to shareholders,” said von Bomhard. “Our good capitalisation enables us to continue taking selective advantage of opportunities for profitable growth in individual regions and classes of business. At the same time, it supports the discipline which is so important to us when underwriting risks,” he added. The currently ongoing buy-back is to be concluded by the Annual General Meeting on 30 April 2014; to date, around 5.2 million shares worth approximately €810m have been bought back. Since November 2006, Munich Re has thus carried out share buy-backs with a total volume of €6.8bn, according to Munich Re.
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