* Targets 3 bln net profit in 2013 vs consensus 2.8 bln
* Sees net profit rising further in 2014
* Won't renew contract of health business board member
* Shares rise 0.8 pct, outpace insurance index
(Adds quotes, analyst comment, background, shares)
By Alexander Hübner and Jörn Poltz
MUNICH, March 12 Munich Re on Tuesday
raised the prospect of buying back its own shares, saying it had
achieved a degree of profitability that was hard to plough back
into the business.
The world's biggest reinsurer said it aimed to earn close to
3 billion euros ($4 billion) this year, after unusually low
damage claims and strong investment gains helped it beat
expectations in 2012.
"We are hardly able to put to work the kind of capital that
we are generating at the this level of profitability," Chief
Executive Nikolaus von Bomhard told a news conference.
"That's why the dividend is not a burden and the question of
share buybacks will certainly be asked in the course of time,"
Von Bomhard left open the timing of a decision to buy back
shares, however, saying low capital market interest rates and
uncertainties over insurance regulation were reasons for
Munich Re was also likely to refrain from takeovers to
expand its book of business, as only one in four acquisitions
tended to work, von Bomhard said.
"We don't want to buy growth," he said.
Munich's 2013 net profit goal is slightly down from the 3.2
billion euros it earned in 2012, but that result was favoured by
lower-than-expected payouts for big damage claims and a one
fourth rise in the income from investments.
Analysts on average expect Munich Re to post net profit of
2.8 billion euros this year, according to Thomson Reuters data.
"We believe the outlook from Munich Re is somewhat on the
conservative side," said DZ Bank analyst Thorsten Wenzel in a
note, adding that consensus estimates were likely to rise.
Munich Re's shares rose 0.8 percent by 1204 GMT, outpacing a
0.5 percent rise in the STOXX Europe 600 insurance index
and a slightly negative index of German blue chip companies
The reinsurance business contributed more than 3 billion
euros of 2012's net profit, with primary insurance kicking in
247 million euros and the health business posting a loss of 92
Munich Re said it could not rule out a further loss in the
health business in 2013, as the unit struggles with problems in
the U.S. market. It added it would not renew the contract of the
board member responsible for the business, Wolfgang Strassl.
Management was working to turn around the U.S. health
business but was also looking at all options and expected to
take a decision on the unit by the end of this year, von Bomhard
Munich Re on Feb. 5 unveiled preliminary earnings for 2012
and said it would raise its dividend to 7 euros per share,
exceeding consensus for 6.76 euros.
($1 = 0.7684 euros)
(Additional reporting by Jonathan Gould; Editing by Alison
Birrane and Paul Casciato)