German reinsurance giant Munich Re said on Tuesday that net profit rose to 557 million euros ($608 million) in the first quarter of this year, which it said kept it on track to meet its profit target for the full year.
Ergo, Munich Re`s troubled primary insurance division, contributed 91 million euros in profit, up from a slight loss a year ago.
Munich Re said the result was in line with expectations, but the unit`s recuperation could help ease the concerns of disgruntled shareholders who worry that Ergo is a drag on the core reinsurance business.
For the full year, Munich Re expects a profit between 2.4 billion euros, it affirmed on Tuesday. That would mark a fifth consecutive year of declining profit.
Low interest rates and sliding reinsurance prices have eroded profits in recent years. Munich Re suggested light was at the end of the tunnel.
"We welcome the turnaround in interest rates in the USA, and hope that the ECB will also return to sustainable monetary policy," Chief Financial Officer Joerg Schneider said in a statement. "Pressure on prices in reinsurance has eased off considerably.
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