Munich Re has posted a consolidated profit of €3.2 billion ($4.2 billion) for 2012, a significant boost from the €710 million ($926 million) figure it achieved in 2011. 

Gross written premium for the group rose by over 5% to €52 billion ($68 billion), while the investment result also improved by 25% to €8.4 billion ($11 billion).

“This very pleasing profit is founded on our rigorous risk management, disciplined underwriting policy and the realisation of profitable business opportunities,” Munich Re CFO Jorg Schneider said.

The company says its core reinsurance and insurance businesses are performing well, with only the Munich Health division performing below expectations due to losses and writedowns in its US division, Windsor Health Group.

Major claims for the year were described as “slightly below average,” with natural catastrophe losses coming in at €1.3 billion ($1.7 billion), enabling the group to post a combined operating ratio in its property/casualty reinsurance business of 91%.

The year’s biggest loss event was Superstorm Sandy, which cost Munich Re around €800 million ($1.04 billion) before tax.

Commenting on the January 1 reinsurance renewals, Munich Re says it is “satisfied” with its renewals, “despite the unrelentingly competitive environment”.

Around half of Munich Re’s property/casualty book renewed on January 1, with the reinsurer dropping some unprofitable business, resulting in a 1.5% overall reduction in business volumes.

The company’s Reinsurance CEO, Torsten Jeworrek, says prices, terms and conditions were all fairly stable at renewal, with the price level across its portfolio up by just 0.5%.

The company says that in the absence of any “exceptional” loss events, it expects largely stable prices, terms and conditions to continue at the April 1 and July 1 renewals.