Munich Re AG expects further write-downs on Greek sovereign debt holdings in the third quarter, but these will be lower than in the second quarter, when it already wrote such holdings down to market value, Chief Financial Officer Joerg Schneider said Monday.
In the second quarter, Munich Re had write-downs of EUR703 million on Greek sovereign debt. Its after-tax profit took a hit of EUR125 million from that.
Speaking to reporters on the sidelines of an insurance conference, Schneider also said Munich Re still expects a profit for the year, noting though that U.S. hurricane season isn’t over yet. Munich Re’s profit target is that of an after-tax profit, including minorities.
The company’s after-tax profit was EUR738 million in the second quarter. For the first six months, however, it made an after-tax loss of EUR210 million, after an after-tax profit of EUR1.19 billion in the comparable year-earlier six-month period.
Munich Re aims to pay a stable dividend, but it is too early to specify the level in the current market environment, Schneider said. The company, along with the entire insurance sector, wants to continue to be a financier of banks, he added. Munich Re competes with peers like Swiss Reinsurance Co. (RUKN.VX) and Hannover Re AG (HNR1.XE) for insurance customers, which buy reinsurance protection as they aim to take more risks on their books.
Berlin, October 17, 2011 (Dow Jones)
