It used to be that the only reinsurers which made a loss were those on their way out, but that’s no longer the case, with Munich Re posting its first loss in 102 years and everyone breathing a sigh of relief. The reason for the $715 million loss – which puts Munich Re into the No 2 position against Swiss Re for the first time – wasn’t attributable to reinsurance. Blame it on a $3 billion tax bill and a $492 million reserves boost for American Re Corporation, its US subsidiary.

In fact, the group’s shares rose on news of the operating results, which included: a fall in the combined ratio from 122.4% in 2002 to 97.6% last year; a pre-tax profit of $406 million; premium income rising 6.3% to $29 billion; and investments, after several years of writedowns, increasing in value to $462 billion.

Board member Jorg Schneider said the loss signifies “drawing a line under three difficult years impacted above all by the bear market on the stock exchanges. We are gearing our operations closely and consistently to profitability in all fields of business.”