Debt crisis, earthquakes slam into Munich Re profits

Munich Re, the world's biggest reinsurer, said its profits plummeted last year due to heavy losses from both the eurozone debt crisis and a string of natural catastrophes. Munich Re said in a statement on Thursday it booked bottom-line net profit of 710 billion euros ($935 million) in 2011, a drop of 71 percent from a year earlier. "The year was marked by a series of severe earthquakes and many weather-related catastrophes. In addition, there was the worsening of the sovereign debt crisis in the eurozone," the statement said. "We have never experienced a year like 2011 before -- extreme burdens from natural catastrophes combined with the financial crisis, which flared up again after the slight recovery in 2009 and 2010," said chief financial officer Joerg Schneider. "Given the huge strains these placed on results, it is a notable achievement that we still posted a profit of 710 million euros," Schneider said. Gross premiums for the year rose by 8.9 percent to 49.6 billion euros, while investment earnings dropped 21.8 percent to 6.8 billion euros. Taking the fourth quarter alone, Munich Re's net profit rose by 33.1 percent to 630 million euros, beating analysts' expectations. In the wake of the results, Munich Re said it planned to pay shareholders an unchanged dividend of 6.25 euros per share.