(Bloomberg) -- Munich Re more than doubled profits last year as the German reinsurer bounced back from the Covid-19 crisis with the highest gross premiums in its history.
Net income rose to 2.9 billion euros ($3.3 billion) from 1.2 billion euros the previous year, according to a statement from the Munich based company on Wednesday. It had forecast profit of 2.8 billion euros. Just hours before, it announced plans to return 2.5 billion euros to its shareholders through a buyback program and an increased dividend.
The company also said it aims to increase profit to 3.3 billion euros this year, which factors in Covid-19 losses before taxes of about 300 million euros in the life and health reinsurance area.
Munich Re is recovering from pandemic insurance payouts and profiting from higher prices. Fallout from Covid-19 has been a major challenge for reinsurers as they dealt with simultaneous claims across multiple business lines. The German company was particularly hit hard by event cancelations, a segment in which it was a market leader.
In response, Chief Executive Office Joachim Wenning rewrote policies to exclude pandemics and halted share buybacks in 2020. The company said Tuesday it will resume buybacks of as much as 1 billion euros in shares and propose a dividend increase to 11 euros a share.
Easing pandemic costs in 2021 were partially offset by claims stemming from natural disasters. Munich Re had previously warned of high costs from floods in Germany last July, which were the costliest natural disaster on record in the company's home market.
Fitch Ratings said late last year it expects the reinsurance sector's financial performance to continue to improve in 2022, “driven by rising prices in a hardening market environment and a higher economic activity”.
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