Munich Re says it remains on target to increase profit to €2.5 billion ($3.1 billion) this year after a relatively benign start to the catastrophe season and improving global markets.

After earlier this year unveiling its worst profit result for nearly a decade, Munich Re says it has made a “good start” to 2012 and expects reinsurance demand to rise after the introduction of new European capital adequacy benchmarks, Solvency II.

CEO Nikolaus von Bomhard says gross written premium for 2012 was tracking between €48 billion ($59.6 billion) and €50 billion ($62.16 billion), on par with €49.5 billion ($61.5 billion) received last year. Combined ratios are expected to be around 96% at a group level.

“After major losses of the kind we experienced in the past financial year, risk awareness is heightened,” Mr von Bomhard said.

In February, Munich Re lodged its worst profit result in nearly a decade as natural disasters and declining investments undermined strong growth in gross written premium.

Consolidated profit in 2011 for the German group plummeted 70.7% to €712 million ($885.31 million) – its lowest result since lodging a loss of €434 million ($539.4 million) in 2003 – as claims from the New Zealand and Japan disasters cost a combined €1.5 billion ($1.86 billion).

Flooding in Thailand was expected to cost Munich Re around €500 million ($621.5 million).

Munich Re has recently joined other insurers in using capital markets as a means of transferring risk. The German reinsurer established a $US75 million ($93.2 million) catastrophe bond through Bermuda-based special purpose insurer Queen Street V Re last month as insulation against hurricane exposure in the US and windstorms in Europe.