(Bloomberg) -- Munich Re, the world’s biggest reinsurer, reported a bigger-than-expected drop in fourth-quarter earnings as claims from natural disasters rose while prices continue to fall.
Net income declined to about 500 million euros ($530 million) from about 700 million euros a year earlier, according to a statement Tuesday. That missed the 630 million-euro estimate of nine analysts surveyed by Bloomberg. The company proposed a dividend of 8.60 euros a share for 2016, after paying out 8.25 euros for the prior year.
Reinsurers, which help primary insurers shoulder risks, are returning cash to shareholders as years of low claims from natural catastrophes reduce demand for coverage. Renewed premium volume declined by 4.9 percent and prices fell by about 0.5 percent in January, when Munich Re renews about half of its non-life reinsurance business. That’s even after Hurricane Matthew, which battered the U.S. East Coast in October after devastating parts of the Caribbean, pushed up claims during the fourth quarter.
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