* Q4 net profit 0.48 bln eur vs poll 0.43 bln
* Q4 operating profit 1.6 bln vs poll 0.87 bln
* Storm Sandy cost reinsurer 800 mln eur
* Shares rise 1.8 percent, outpace insurance index
(Adds analyst comment, detail, background, shares)
FRANKFURT, Feb 5 Munich Re, the
world's biggest reinsurer, raised its dividend more than
expected after below-average damage claims and surging
investment income bolstered 2012 profit.
The company said on Tuesday it planned to raise its dividend
for 2012 to 7 euros per share from 6.25 euros, exceeding
consensus for 6.76 euros.
"That Munich Re increases the dividend even more than we had
expected is clearly a sign of confidence in the capital base and
future earnings power," said DZ Bank analyst Thorsten Wenzel in
a research note.
Munich Re's share rose 1.8 percent to 136.05 euros by 0821
GMT, outpacing a 0.3 percent rise in the STOXX Europe 600
"Our core business in insurance and reinsurance is healthy,
while the claims burden from major losses was slightly below
average," Chief Financial Officer Joerg Schneider said in a
Natural catastrophe losses totalled about 1.3 billion euros
($1.76 billion) for the full year. Superstorm Sandy in the
United States alone cost it around 800 million euros.
Net profit for 2012 rose to 3.2 billion euros from 0.7
billion euros in 2011, when major losses such as an earthquake
in Japan hit results, beating the 3.13 billion euro average of
seven estimates in a Reuters poll.
Investment income rose by one fourth to 8.4 billion euros,
well above the average expectation of 8.1 billion in the poll.
Munich Re made no mention of intensifying competition among
reinsurers to win business from insurance companies, saying that
demand for reinsurance cover was relatively constant and supply
Munich Re rival and the world's third-largest reinsurer,
Hannover Re, said on Monday pressure was mounting
from competitors amid decisions by insurance companies to keep
more risk on their own books, rather than passing it to
"In general, it has been more competitive also with the
incumbent reinsurers than it was a year ago," Hannover Re Chief
Executive Ulrich Wallin said of the negotiations on reinsurance
contracts that were renewed in January, adding that this could
make further premium growth more difficult.
Munich Re said the volume of its property-casualty
reinsurance business decreased by 1.5 percent when it renewed
contracts with its customers at the start of the year.
Prices, however, rose marginally by 0.5 percent, it said.
"Munich Re expects the trend towards largely stable prices,
terms and conditions to continue, unless there are any
exceptional loss events," the company said of contract renewals
due in Asia and the Americas in the coming months.
($1 = 0.7376 euros)
(Reporting by Jonathan Gould; Editing by Maria Sheahan and