Munich Re Group: quarterly and half-yearly figures

• Still very pleasing development in underwriting business; combined ratio for the first half year down to 95.9% in reinsurance and 96.0% in primary insurance
  
  
• Funds increased by Euro 6bn over previous quarter, or 50% to over Euro 18bn
  
  
• Excellent result before tax of Euro 737m in the second quarter after Euro 40m in the first quarter. High provision for taxation leads to half-yearly result of -Euro 603m
  
  
• Agricultural losses due to drought hardly affect insurance industry

Group premium income increased from Euro 20.4bn in the first half of 2002 to Euro 20.8bn. Despite the stronger euro, premium income thus maintained last year's high level. The operating result before tax amounts to Euro 777m in the first half year, compared to Euro 3,486m in the same period last year. Given the current legal uncertainty regarding the tax treatment of writedowns on and losses on the sale of shares in equity funds and the taxation of life and health insurers, Munich Re has made provision in the second quarter for the anticipated tax liabilities. This taxation provision is reflected in the half-yearly result of -Euro 603m, as are the after-effects of the stock-market slumps in previous quarters.

The favourable performance of underwriting business and the rise in the price of shares and fixed-interest securities have substantially improved our equity capital base: shareholders' equity rose to Euro 15.1bn, following Euro 12.5bn in the first quarter. In addition to this, the successful placement in mid-April of the subordinated bonds with a total volume of Euro 3.4bn also substantially contributed to the increase of our funds to Euro 18.5bn. These funds rose by Euro 6bn over the first quarter and by Euro 4.6bn as against the end of 2002.