Munich Re has posted a loss of €948 million ($1.3 billion) for the first quarter of 2011, down from a €485 million ($648 million) profit for the same quarter last year.

Overall gross written premium increased by 11.3% to €13 billion ($17.4 billion), with its fall into the red due to the “exceptionally high costs for natural catastrophes”, the company says.

But it maintains it is on track to post a profit for the full year, even in the event of “further major losses within the statistically expectable range”, Munich Re CFO Jörg Schneider says.

Munich Re left its loss estimates for the first-quarter disasters unchanged at €2.7 billion ($3.6 billion), with €1.5 billion ($2 billion) attributable to Japan and €1.1 billion ($1.5 billion) to Australia and New Zealand.

The reinsurance division reported an operating loss of €1.3 billion ($1.7 billion) for the quarter, compared to a €605 million ($808 million) profit the previous year.

The reinsurance combined ratio for the first quarter was 159.4%, up from 109.2% for the corresponding period last year.

The company is still talking up the market, with reinsurance division CEO Torsten Jeworrek saying that prices in loss-affected regions such as Australia and New Zealand are likely to rise “considerably”.

“In the current financial year, Munich Re expects price increases in global lines such as natural catastrophe or industrial business as a result of the recent loss events,” Mr Jeworrek adds. 

It says the recent US tornadoes will cost it “in the region of €100-150 million ($133.6-200.5 million)”.

Compared with its 2010 year-end result, its shareholder equity fell 11% to €20.5 billion ($27.4 billion), although this was also partly due to rising interest rates, a relatively strong euro and share buybacks.