Annual Report 1997/1998 - Munich Re

Munich Re Report of the Board of Management
The change in the balance sheet date will enable us to inform our
shareholders about the past business year significantly earlier and also
let them participate in the profit at an earlier date. The next annual
report will be published in June 1999 (instead of November); the AGM
will take place on 22nd July 1999, over four months earlier than
hitherto.
Group premium income for 1998 around DM 50bn
We will consolidate the VICTORIA Group fully for the first time, in
contrast to its inclusion on a pro rata basis with five twelfths in our
consolidated accounts as at 30th June 1998. After its sale to CGU,
Berlinische Leben will no longer be consolidated in the 1998 accounts.
Torino Ri, for which the relevant acquisition was completed in July
1998, will be consolidated for the first time.
On this basis, at unchanged currency parities, we expect our
premium income for 1998 to be around DM 50bn. This is an increase
of about 12% on last year. The premium will derive almost equally
from the direct insurers and the reinsurers.
Another satisfying Group result in prospect
As things stand at present, the result will again be very good. Owing
to the full consolidation of the VICTORIA Group and the expected
improvements in the results of the reinsurance subsidiaries, the Group
profit for the year should reach at least the same level as in 1997/98,
even though the parent company will only be included for a short
business year. However, this forecast presupposes that we are not
affected by exceptional developments in the remainder of 1998,
especially by heavy claims burdens from natural catastrophes or
other very large losses.
Parent company
Competition among insurers is increasing, so that original rates
are falling. In addition, our cedants are significantly raising their
retentions. At the same time, the supply of capacity in reinsurance is
growing. Nevertheless, the parent company will succeed in more or
less maintaining its premium volume in the risk period 1998.
Premium income to stay at last year’s level
The premium income from German business – despite the successful
defence of our market share – is showing a marked decrease; this
applies especially to motor business and industrial fire insurance. By
contrast, our premium volume will show further pleasing expansion
abroad, especially in life business but also in agricultural insurance and
in fire.
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