S&P Comments on Munich Re Group’s Q1 2003 Results

June 19, 2003

Standard & Poor’s Ratings Services issued an announcement indicating that Munich Re’s first quarter results and those of its subsidiary companies are “broadly in line” with its expectations.

S&P currently rates the group ‘AA-‘ with a “negative” outlook. It does, however, expect “further improvement in the operating performance” during 2003 as the impact of price increases and tighter terms and conditions take effect. “Consequently, the reinsurance and primary insurance combined ratios should be well below 100%, and ROR of more than 10% should be achieved for the year,” S&P added.

“Following the successful hybrid debt issuance earlier this year, Standard & Poor’s also expects risk-based capitalization to continue to improve both quantitatively and qualitatively through retained profits,” the bulletin continued. “Furthermore, Standard & Poor’s expects to see improvements to the balance sheet, including further substantial capital-raising initiatives. Standard & Poor’s expects that Munich Re will restore its capital adequacy to at least a strong level by the end of this year, a level more consistent with the ratings on the group operating companies.”

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