Munich Re has warned of an 8% drop in first-quarter profit due to strong competition in the reinsurance market.

The company reports its first-quarter results on Wednesday, but Chairman and CEO Nikolaus von Bomhard told last week’s annual general meeting it will report a profit of about €900 million ($1.34 billion).

Munich Re is still aiming for a full-year profit of €3 billion ($4.47 billion), but he admits this is “definitely ambitious given the prospect that the return on our investments will fall further and our tax burden will revert to normal”.

Mr von Bomhard says the year has started well, with hardly any major losses, but this year’s reinsurance renewals have reflected keener competition.