Swiss Re said today the insurance sector stood to lose $4-$7 billion (€2.9-€5.1 million) from the earthquake in Chile, a sum unlikely to bring the long hoped-for increase in reinsurance prices.
The world's second-biggest reinsurer estimated its own losses from the Chile disaster, one of the most powerful earthquakes in a century, at around $500 million.
The company said it would also lose around $100 million from winter storm Xynthia which caused widespread damage in northern Spain and France at the end of February.
Meanwhile, Munich Re said it expects to earn a net profit of more than €2 billion this year.
"For 2011, Munich Re anticipates an increase in results," it added in a statement in which it confirmed it achieved net profit of more than €2.5 billion in 2009, when it had no big losses for natural disasters and financial markets rebounded.
The world's biggest reinsurer said it expected its loss burden from last month's 8.8 magnitude earthquake in Chile and European windstorm Xynthia at around 500 million euros, with the storm accounting for 100 million euros of the claims.
US investor Warren Buffett has amassed a stake of more than 5 per cent in the reinsurer, which analysts say is probably financial rather than strategic and may reflect an appreciation that Munich Re came through the financial crisis relatively unscathed.
"Munich Re will carefully consider further buy-backs, weighing up the benefit against the advantages of comfortable capitalisation - also with a view to opportunities for organic and possibly external growth," it said.
Its shares were indicated firmer in an overall flat German market before trading begins at 8am.
"These are some solid numbers from Munich Re today," said one Frankfurt-based trader.
In May 2007, Munich Re unveiled a €5 billion share buyback programme, of which €4 billion is expected to have been purchased by April this year.
Reuters