Munich Re expects A$1.5bn hit from 2011 cats

German reinsurance group Munich Re has reaffirmed its €2.4bn (US$3.3bn) profit target for 2011, but said this will only be achievable if major losses for the rest of the year are below expectations.

The announcement comes as the reinsurer expects a combined loss of A$1.5bn (US$1.5bn) from the New Zealand Earthquake, Brisbane floods and Cyclone Yasi, which have hit so far this year. The New Zealand earthquake alone will count for A$1bn of this total.

Munich Re has confirmed preliminary figures released in February that it has made a profit for 2010 of €2.43bn, beating its €2bn target.

Risk-adjusted return on capital for the year was 13.5%, slightly below Munich Re’s target of 15%.

“It was not an easy year given the high burdens from major losses, but we were nevertheless able to bring it to a successful close,” Munich Re chief executive Nikolaus von Bomhard said in a statement.

Munich Re’s reinsurance operating result fell 28.2% to €2.9bn in 2010 from €4bn in 2009 and the combined ratio increased to 100.5% from 95.3%. Natural catastrophe losses for the year amounted to €1.56bn, adding 11 percentage points to the combined ratio.