(Bloomberg) -- Munich Re, the world’s biggest reinsurer, will continue buying back shares as declining prices and lower investment income undermine earnings.
Munich Re plans to repurchase an additional 1 billion euros ($1.1 billion) of its own shares before its 2016 shareholder meeting, it said in a statement Wednesday. That comes on top of a 1 billion-euro program ending in April. Net income will probably decline to a range of 2.5 billion euros to 3 billion euros this year, compared with 3.2 billion euros reported for 2014, the Munich-based reinsurer said.
The company, led by Chief Executive Officer Nikolaus von Bomhard, is buying back stocks and raising its dividend as it contends with declining prices for reinsurance coverage, down in 7 of the past 10 years. Pressure on interest rates on fixed income investments and on insurers’ investment returns is increasing as the European Central Bank embarks on a bond-buying program worth at least 1.14 trillion euros.
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