MUNICH (dpa-AFX) - The world's largest reinsurer Munich Re is expecting rather more profit this year than before, despite devastating earthquake damage in Turkey. "The probability that we will exceed 4 billion has of course increased," Chief Financial Officer Christoph Jurecka said when presenting the final figures for the first quarter on Wednesday. That's because with a net profit of 1.3 billion euros in the first quarter of the year, the Munich-based Dax group has already achieved almost a third of its target for the year. However, Jurecka believes it is still too early to raise the forecast.

On the stock exchange, Munich Re shares rose after an initial slide. At midday, they were up 0.5 percent at 324.20 euros and were among the strongest stocks on the Dax. Since the turn of the year, it has thus gained around almost seven percent in value.

Munich Re had already published its most important profit figures for the first quarter in advance at the end of April and clearly exceeded analysts' expectations. Industry expert Philip Kett from analyst firm Jefferies wrote of an impressive development with regard to the detailed figures from Wednesday.

The fact that the Board of Management is not aiming for a higher profit in 2023 was explained by Chief Financial Officer Jurecka as a result of cautious planning. This year, large insurance companies must calculate their figures for the first time according to the new accounting standards IFRS 17 and IFRS 9. The previous year's figures have been adjusted as far as possible.

Whereas Munich Re had reported a surplus of €3.4 billion for 2022 under the old accounting rules, this would have been significantly higher at €5.3 billion under the new rules, according to Jurecka. However, this was due to positive special effects, including high currency gains and the reversal of a loss component in property and casualty business.

Without such special effects, profit would have been 3.9 billion euros, according to the manager. According to him, the target of around 4 billion euros for 2023 thus corresponds to a slight increase on a comparable basis.

In fact, Munich Re already earned less in the first quarter than a year earlier. At that time, high currency gains and low major losses had given the Group a quarterly profit of 1.5 billion euros. This time, currency losses and expensive major losses led to a decline to just under 1.3 billion euros. The devastating earthquake in Turkey on the border with Syria cost Munich Re around 600 million euros.

While profit in reinsurance business as a whole slumped by more than a fifth to 1.05 billion euros due to unexpectedly high major losses, the primary insurance subsidiary Ergo increased its profit by a good 40 percent to 219 million euros. The Group's investments also yielded significantly more thanks to higher interest rates.

Meanwhile, Munich Re was able to significantly increase its income. Insurance revenue grew by just under eight percent year-on-year to 14.3 billion euros. In the new accounting system, this key figure replaces premium income, which was previously the norm. For the full year, management continues to target insurance sales of around 58 billion euros.

The Board of Management continues to expect tailwind from higher prices in property-casualty reinsurance: In the treaty renewals at April 1, Munich Re obtained 4.7 percent higher prices from its clients here and expanded its business volume by 11.1 percent./stw/mne/mis