Munich Re announces provisional IAS figures for 1999:

Group profit holds up well at EUR 1.1bn despite high claims costs in reinsurance. Supervisory Board and Board of Management will propose a dividend of EUR 0.95, which would more than double the overall amount distributed. High allocation to reserves. Signs of a turnaround in reinsurance market. Continued growth and good results again in primary insurance.

After publishing figures on the basis of International Accounting Standards for the first time on 6th December 1999 (as calculated for the business year 1998), Munich Re is now announcing the key provisional figures for the business year 1999 on this basis, following today's Supervisory Board meeting.

The reinsurers in the Group had to deal with an exceptional accumulation of small and medium-sized losses from natural catastrophes in 1999. Besides the December winter storms Lothar and Martin in Europe, these included the Sydney hailstorm, Typhoon Bart in Japan, and the earthquakes in Turkey, Greece and Taiwan. Total claims costs for natural catastrophes trebled compared with the previous year. In addition, an extremely unsatisfactory market situation had a significant impact on results. Thus American Re, like its main competitors in the USA, had to record substantial losses in 1999. Altogether, as far as the reinsurers in the Group were concerned, 1999 was the worst year ever for Munich Re in terms of claims costs. However, thanks especially to an outstanding investment result, the reinsurers were still able to make a contribution of EUR 1.2bn (1.5bn)* to the result before tax, amortization of goodwill and minority interests.

The gross premiums written by the reinsurers in the Group, which contribute just under 51% of the Group's total premium income, increased altogether by 8.6% to EUR 15.4bn*, partly owing to changes in exchange rates; the biggest contributor to this growth was life reinsurance.

The development of the primary insurers' premium income and results was again very satisfactory. Premiums rose by 6.5% to EUR 13.5bn in 1999. Especially the life insurers in the Group, benefiting from tax plans of the German government that have since been shelved, succeeded in writing an exceptionally large amount of new business and achieved growth of 9.8%. In health insurance, growth amounted to 3.1%. The property-casualty insurers increased their premium income by 4.7%.

Altogether, the primary insurers contributed an excellent EUR 0.9bn (0.8bn)* to the result (before tax, amortization of goodwill and minority interests).

The Group's investments increased in 1999 by 11% to EUR 151bn. The profit on investments, which is incorporated in the segment results, increased by 12% to EUR 9.5bn; it includes realized capital gains of EUR 1.7bn (1.6bn).

In accordance with IAS rules, a substantial portion of the investments are measured at fair value; there are nevertheless significant valuation reserves of around EUR 20bn.

Further significant progress was made in the development of the asset management company MEAG, which takes over management of a large portion of the Group's investments as at 1st April 2000. In addition, MEAG will gradually expand its asset management for third parties.

In the current year Munich Re expects results to be considerably better. The positive effect of this should more than equal the one-off effect of the reduction in the corporation tax rate, which benefited the 1999 result, and yield a higher profit for the year. Unless there are any unpleasant surprises, it should therefore be possible to emulate the very good 1998 result.