Munich Re is braced for earnings to decline further after net profit fell 1.4% to €3.1 billion ($4.6 billion) last year, hit by negative currency movements and impairment charges.

The reinsurance giant expects net profit this year to be €2.3-€2.8 billion ($3.4-$4.1 billion).

“On account of continuing low interest rates and intensive competition in reinsurance, this is an ambitious target, especially because we cannot expect to see a repeat of the below-average expenditure for natural catastrophe claims we had [last year],” CEO Nikolaus von Bomhard said. “Thanks to our capital strength and conservative underwriting and reserving policies, we are able to post gratifying results even in a difficult market environment.”

Gross written premium increased 3.1% to €50.4 billion ($74.6 billion) last year, and the combined operating ratio for reinsurance improved to 89.7% from 97.2% in 2014.

The reinsurer suffered negative currency movements of €213 million ($315 million) and its Ergo primary insurance unit made a loss of €227 million ($335 million), compared with a profit of €169 million ($250 million) in 2014.

Overall expenditure for major losses fell to €1.05 billion ($1.55 billion) from €1.16 billion ($1.72 billion), and natural catastrophe losses declined sharply to €149 million ($220.4 million) from €538 million ($795.8 million).

The Tianjin warehouse blasts in China accounted for the biggest individual man-made loss last year, at €175 million ($258.9 million).

The German reinsurer has also announced Joachim Wenning – board member responsible for international life reinsurance business – will take over as CEO next year from Mr von Bomhard, who has requested to step down.