Munich Re exceeded profit expectations last calendar year, but warns it expects soft pricing to continue at the July renewals.

The company renewed half its non-life reinsurance at January 1 and says the price fell 1.5%.

Reinsurance CEO Torsten Jeworrek says the April and July renewals include a greater proportion of natural catastrophe business, and he expects pricing to remain under pressure unless any extraordinary loss events occur.

The group increased profit by 3% to €3.3 billion ($5.08 billion) last year, above its guidance of €3 billion ($4.6 billion).

Fewer claims offset a 2% fall in gross written premium to €51.1 billion ($79.25 billion) and an 8% drop in investment earnings to €7.7 billion ($11.85 billion).

The group was also able to release provisions and had a lower tax bill.

Reinsurance contributed €2.8 billion ($4.27 billion) to the profit, down 19% on 2012, with the Australian life reinsurance business causing an adverse impact in the third quarter.

Life reinsurance profit fell €100 million ($153.88 million) to €400 million ($615.54 million) for the year.

Property and casualty reinsurance profit fell 8% to €2.4 billion ($3.69 billion) and the combined ratio was 92.1%.

Munich incurred natural catastrophe losses of €764 million ($1.17 billion), down 40%, but other catastrophe losses grew 80% to €925 million ($1.41 billion).

Primary insurance doubled profit to €400 million ($615.54 million) and Munich Health contributed €200 million ($305.12 million), turning around a 2012 loss.