Munich Re’s first-quarter net profit grew 27.7% to €557 million ($822.63 million) as improved results from its reinsurance arm and Ergo’s return to profitability offset higher major-loss expenditure.

The German reinsurer remains on course to achieve its €2-€2.4 billion ($2.95-$3.54 billion) profit forecast.

“We achieved a gratifying quarterly result despite a significant increase in major losses… we continue to focus on our disciplined underwriting policy, responsiveness to clients’ needs and the systematic tapping of new business opportunities in primary insurance and reinsurance,” CFO Jorg Schneider said.

Group-wide gross written premium increased 3.3% to €12.93 billion ($19.1 billion) and net earned premium grew 4.4% to €11.84 billion ($17.49 billion).

The property and casualty reinsurance unit suffered a 19.9% drop in profit to €340 million ($502.18 million) as major-loss expenditure before tax grew to €403 million ($595.23 million) from €100 million ($147.7 million). Its combined operating ratio worsened to 97.1% from 88.4%.

Cyclone Debbie cost the reinsurer about €100 million – the largest natural catastrophe loss for the March quarter. The total natural catastrophe bill was €156 million ($230.47 million), while man-made losses amounted to €247 million ($364.92 million).

The Ergo primary insurance unit recorded a €91 million ($134.44 million) profit, following a €12 million ($17.73 million) loss in the first quarter last year.