Annual Report 1997/1998 - Munich Re

Munich Re Report of the Board of Management
Gross premiums in DM bn
28.6
29.0 29.0
32.2
44.5
1993 1994 1995 1996 1997
Board of Management’s report
for the Munich Re Group
and the Munich Reinsurance Company
The business year 1997/98 was again a very successful one for the
Munich Re Group. We were able to achieve a marked increase in
premium income and further improve the Group profit. This was
especially due to the changes in the group of consolidated companies.
Pleasing business performance
The premium income of the companies consolidated in the Group
accounts rose by 38% to DM 44.5bn (32.2bn). Without the changes in
the consolidated group, the increase would have been approximately
8%. Net premiums totalled DM 40.5bn (28.9bn) or 40% more than in
the previous year. Around 56% (60%) of the premium income derived
from the reinsurers and 44% (40%) from the direct insurers.
Gross premiums 1993 1994 1995 1996 1997
DM m % DM m % DM m % DM m % DM m %
Reinsurers 19,059 66.6 18,848 65.1 18,507 63.8 19,329 60.1 24,944 56.0
Direct insurers 9,579 33.4 10,126 34.9 10,482 36.2 12,852 39.9 19,578 44.0
Total 28,638 100.0 28,974 100.0 28,989 100.0 32,181 100.0 44,522 100.0
Group profit for the year in DM m
300
325
595
699
1,149
93/94 94/95 95/96 96/97 97/98
The Group’s underwriting profit fell to DM 596m (776m), as results
in reinsurance deteriorated due to keener competition. By contrast,
the investment result improved markedly to DM 13.3bn (9.4bn); in
accordance with accounting regulations, DM 9.4bn (7.1bn) of this is
incorporated in the underwriting result.
Further substantial strengthening of reserves
The claims equalization provision and similar provisions have once
more been increased by a very large amount, totalling DM 1.3bn
(1.2bn). In addition, we have again been able to make large special
allocations, amounting to DM 270m (200m), to the provision for
outstanding claims, especially in liability business.
Marked increase in overall result
The Group profit for the year is substantially higher than in the
previous year. It shows an increase of 64% to DM 1,149m (699m).
The Munich Reinsurance Company’s profit for the year is DM 303m.
After allocation of DM 150m to the revenue reserves, the balance sheet
profit remaining is DM 153m. This has been earmarked for distribution
to shareholders in the form of an increased dividend of DM 1.80 per
share.
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