Munich Re has reported a 5% fall in its 2010 net profit to €2.43 billion ($3.26 billion), down from €2.56 billion ($3.43 billion) in 2009. This is despite a 10% rise in gross written premium to €45.5 billion ($61 billion).

Its reinsurance business posted a net profit of €2.1 billion ($2.8 billion), down 19% from €2.58 billion ($3.46 billion) in the previous year due to “high claims costs for major losses”. Reinsurance premium income, excluding the effects of currency translations, grew 1.5% to €23.6 billion ($31.6 billion) in 2010. Its reinsurance combined ratio rose to 101% in 2010, up from 95% in 2009.

CFO Jörg Schneider says the company is anticipating a “somewhat better” technical result this year and a net profit “of around the same level”.

Catastrophe losses amounted to €1.56 billion ($2.1 billion) for the year, with the Chilean earthquake its largest loss. For September’s Christchurch earthquake, Munich Re has updated its claims costs to €340 million ($456 million).

It says that the flooding in northeastern Australia was its largest individual loss in the fourth quarter of 2010, with claims costs of around €270 million ($361.8 million), and is predicting claims expenses “of a similar amount in the first quarter of 2011”.

Munich Re renews roughly two-thirds of its global property and casualty business at January 1, and says price pressure in most lines of business and regions is persisting.

But the company believes the 2010 claims experience had a “stabilising” influence on those lines of business and regions affected.

“Thus, prices increased markedly for natural catastrophe covers in Australia/NZ and in offshore energy business.”

Despite the overall pricing pressure, Munich Re reported its premium volumes at the January 1 renewals increased by 4% to €8.2 billion ($11 billion), with profitability “slightly improved”, as the price level rose by 0.1% over the previous year.