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

Mon May 9, 2011 6:56am EDT

* Q1 online damage 947 mln eur as opposed to poll avg 1.06 bln loss

* Op reduction 1.35 billion euros vs f'cast 1.2 billion loss

* Expects in order to find full-year profit, despite Q1 significant claims

* Sees climbing prices in herbal catastrophe, industry lines

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

(Adds analyst comment, background)

By Jonathan Gould

FRANKFURT, May in search of (Reuters) - Munich Re (MUVGn.DE) created a new smaller-than-expected net loss while in the initial quarter since it's levy costs chop down inside wake of damaging earthquakes throughout Japan and also New Zealand.

The world's most important reinsurer experienced already primed the particular current market that is expected a "clearly negative" quarterly result, once pencilling with 2.7 billion euros ($3.9 billion) intended for natural accident insurance coverage claims from really bad problems like the not one but two earthquakes as well as flooding as well as a cyclone in Australia.

"Despite these disastrous natural catastrophes, we can continue to achieve a revenue for that year as being a whole," Chief Financial Officer Joerg Schneider said, reiterating the latest outlook.

Munich Re possessed ditched it is full-year aim for associated with generating concerning 2.4 billion euros in net benefit within the wake associated with that disasters as well as on Monday rejected to put a new physique on predicted profit this specific year.

"It will end up being wrong setting some sort of lower target," Schneider advised a seminar call with journalists.

Reinsurers usually face their most important damage cases within the second fifty percent of the year, if the North Atlantic hurricane season, which often owns from June to be able to November, is in entire swing.

A a worry group of hurricanes in 2010 veered out of harmlessly into the Atlantic, causing U.S. seaside properties, and insurers, unscathed. This year may very well be different.

Big harm payment odds in addition keep a magical coating with regard to reinsurers and their particular insurance broker clients, all around health allow it to become simpler to be able to rationalize greater price ranges to get guaranteeing towards risks.

Munich Re reported the actual damage witout a doubt suffered this coming year would decide to put upward difficulty about rates intended for natural catastrophe along with conventional insurance, thinking that a wide-ranging increase throughout reinsurance prices ended up being for being envisioned for your entire year.

"Altogether, (price rises) will most likely end up inside your very low single-digit percentage range," mentioned Torsten Jeworrek, Munich Re mother board member responsible regarding reinsurance business.

"But I do not have your crystal ball," he / she added.

Jeffries analyst James Shuck reported Munich Re's prediction connected with double-digit price heightens in contract shares pertaining to U.S. herbal disaster reinsurance within the approaching months was encouraging.

"Management made quite a few fairly constructive comment forms around the standing outlook especially on world-wide lines," Schuck explained inside a take note to clients.

Munich Re stock shares had been along 1.4 percent to 110.45 euros at 1052 GMT, insurance policy coverage STOXX Europe six hundred insurance policy directory .SXIP was straight down 1.6 percent.

PAINFUL QUARTER

The freak one fourth connected with normal unfortunate occurances this year possesses slammed reinsurers in their bread-and-butter business of giving a financial backstop to insurance agencies struggling with large claims.

Munich Re's quarterly internet reduction was 947 million euros, that has been smaller compared to 1.06 million euros average associated with 10 rates with some sort of Reuters poll of banks plus brokerages.

The end result was favoured by way of your taxes gain associated with 612 million euros inside the one fourth producing in the quarterly loss. Group gross premiums as well went up by 11.3 p'cent to be able to nearly tough luck million euros.

Global No. 2 participant Swiss Re (RUKN.VX) continue full week reported a $665 million quarterly loss, when No. three reinsurer Hannover Re HRNGn.DE maintained that will flip a astonish profit, aided by way of duty rebate as well as clearing up regarding reserves added up to cover earlier claims.

The Japan, New Zealand in addition to Australia statements furthermore dented gains with Warren Buffett's conglomerate Berkshire Hathaway Inc, which is also a major reinsurance player.

Munich Re stock shares include fallen by over hunting for p'cent considering that Feb. 21, your day prior to a 6.3 degree earthquake struck Christchurch, New Zealand, and get gone down by 4.8 percent because size 9.0 earthquake and also tsunami with Japan.

Data through StarMine, which will loads analysts' estimates based on their observe record, demonstrate Munich Re stock trading at 12.8 moments 12-month frontward earnings, your discounted that will that will make Swiss Re (RUKN.VX) with a numerous associated with 14.8 nonetheless a high quality to help Hannover Re (HNRGn.DE), which often investments in the multiple regarding 8.4. (Editing by David Holmes as well as Mike Nesbit) ($1=.6953 euros)