Munich Re can still achieve its result target for 2005

Estimates for hurricane losses updated / Munich Re can still achieve its result target for 2005, despite large volume of delayed claims notifications for Katrina, and aims to increase its dividend by 55% to EUR 3.10.

The 2005 hurricane season (including the storms Dennis, Emily, Katrina and Rita in the 3rd quarter and Wilma in the 4th quarter) involved exceptionally heavy losses. These have also hit Munich Re harder than previously foreseeable. Following the receipt of further claims notifications from clients and reports from loss adjusters since the middle of the 4th quarter, the Group now anticipates that its total burden from the hurricanes will amount to almost EUR 2.3bn after retrocession: of this, Wilma accounts for EUR 330m, Rita for over EUR 250m and Katrina for EUR 1.6bn. The impact of these storms on the consolidated result after tax is nearly EUR 1.5bn (in the ad-hoc announcement of 28 September 2005, prior to Wilma, the estimate of the net burden after retrocession and tax was around EUR 650m for Hurricanes Katrina and Rita).

Despite record losses from this series of natural catastrophes, the Munich Re Group can still achieve its result target for the year, not least due to substantial capital gains from measures taken for further derisking in its investments. The exchange of HVB shares into UniCredit stock produced a net gain of around EUR 1.15bn. In addition, the results of the Group's basic reinsurance business have been good and its primary insurers have continued to build on their positive development.

The markedly improved overall result for the year would enable the Company to pay a higher dividend. Therefore, the Board of Management intends to propose to the Supervisory Board and the AGM that an increased dividend of EUR 3.10 per share be paid, EUR 1.10 more than for 2004.

For further details, please refer to the press release.