(Bloomberg) – Munich Re, the world's second-biggest reinsurer, revised its full-year profit target to include restructuring charges at its primary insurance unit and losses on equity investments that hit first-quarter earnings. The shares fell to the lowest in more than eight months.
Munich Re's new profit target of 2.3 billion euros ($2.6 billion) now includes restructuring costs at the Ergo primary-insurance unit, the company said in a statement on Tuesday. The previous target ranged from that figure to as much as 2.8 billion euros. First-quarter net income fell to 430 million euros from 790 million euros a year ago, missing the 634 million-euro average of seven analyst estimates compiled by Bloomberg.
"We had to cope with significant strains on our investment result," Chief Financial Officer Joerg Schneider said in the statement. "The decrease in profits in the first quarter has dampened our optimism with regard to the annual result. It is looking more and more likely that there will be high costs for implementing the strategy program at Ergo."
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