NU Online News Service, Feb. 3, 3:00 p.m. EST

Munich Re reported its fourth-quarter 2010 profit was down 63 percent from the previous year's fourth quarter, while profit for the year was down 5 percent despite major losses during the fourth quarter.

The Munich, Germany-based reinsurer reported 2010 fourth-quarter profit of €480 million ($655 million at the current exchange rate), down €300 million ($410 million) from the same period during the prior year.

Profit for the year dropped €130 million ($177 million) to €2.43 billion ($3.32 billion).

“Despite weighty major losses, which also affected us at the end of the year, we are presenting a good result,” said Chief Financial Officer Jörg Schneider in a statement.

The company reported gross premiums written increased €4.1 billion ($5.6 billion) to €45.5 billion ($62 billion) for the year and €1.1 billion ($1.5 billion) in the quarter to €11.5 billion ($16 billion).

Munich Re's combined ratio rose 3.7 points in the quarter to 96, while on the year, the combined ratio increased 5.2 points to 100.5.

Munich Re said natural hazard events, such as the long winter extending into spring, and damage from flooding were responsible for “considerably higher claims expenditure” last year, especially on the company's international business, in its primary insurance.

Reinsurance also had high claims counts from major losses on the year but was still able to contribute a profit.

In its life reinsurance business, Munich Re said gross written premiums rose 16 percent compared to the previous year, reaching €7.9 billion ($10.8 billion).

Munich Re said its largest loss event last year was the earthquake in Chile, with natural catastrophe losses coming in at €1.56 billion ($2.13 billion) compared to €200 million ($273 million) the previous year.

Losses from the New Zealand earthquake stand at €340 million ($464 million). The largest fourth-quarter loss was flooding in northeastern Australia where claims stand at around €270 million ($269 million).