Munich Re’s first-quarter profit fell 4.7% to €924 million ($1.36 billion) amid lower premium income, strong reinsurance competition and higher catastrophe losses.

It expects price erosion on natural catastrophe covers to decrease at the July renewals compared with April, and forecasts this cover will again account for about 25% of premium volume.

“With customised solutions and a rising number of private placements, we can limit the impact of the negative market trend on our own portfolio,” Reinsurance CEO Torsten Jeworrek said.

Despite price erosion, Munich Re’s portfolio profitability remains good, above return expectations, he says.

Group gross written premium fell 2.7% to €12.92 billion ($19.09 billion) in the quarter.

Property and casualty reinsurance premium volume was pushed up by new large-volume treaties concluding and increased shares in treaties in the Australian and Chinese motor businesses.

Appreciation of the euro had a negative effect on Munich Re’s premium income, but investment earnings grew 3.1% to €2.07 billion ($3.05 billion).

Group reinsurance profit fell 9.4% to €750 million ($1.1 billion) and life reinsurance profit dropped 40.5% to €103 million ($152.23 million) in the quarter.

Property and casualty reinsurance profit was down 1.2% to €647 million ($956.5 million).

Catastrophe losses were up 50% to €36 million ($53.22 million).