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Bushfires add to reinsurers’ first-quarter misery

Victoria’s Black Saturday bushfires have helped depress the first-quarter results of two major German reinsurers.

Munich Re says it has made a €65 million ($115 million) provision for the claims burden from Victoria’s February disaster, and Hannover Re says its first-quarter losses include a €12.5 million ($22 million) provision for the event.

Munich Re says its profit for the three months to March 31 fell by 45.9% to €420 million ($741.2 million) compared with last year’s first-quarter result.

Europe’s Winter Storm Klaus also pushed the profit down, with provisioning for €80 billion ($141 million).

Investment income dropped 18.5% to €1.4 billion ($2.5 billion) over the 12 months, although the value of investments was up 1.2% on year-end 2008 at €177 billion ($312.3 billion).

Gross written premium rose 5.3% to €10.4 billion ($18.3 billion).

Major losses in the first quarter were “manageable”, with natural catastrophes contributing 5.6 points to the reinsurance combined ratio of 97.3%, down from last year’s 103.7% to which natural catastrophes added 10.7%.

At Hannover Re, first-quarter investment income was down 24.5% from the corresponding period last year, at €198 million ($349 million).

Profit was up 24.5% at €305.8 million ($539 million), boosted by the one-off profit contribution of €80 million ($141 million) from acquiring ING’s US life reinsurance portfolio.

The acquisition also contributed to a 17% rise in gross written premium to €2.7 billion ($4.76 billion).

Catastrophe losses and major claims came in at €98.8 million ($174.38 million), up from €68.1 million ($121 million). Losses included €12.5 million ($22 million) from the Victorian bushfires and €63.3 million ($112 million) from Winter Storm Klaus.