German reinsurer Munich Re raised its dividend for 2014 by more than expected to 7.75 euros per share, returning surplus cash to shareholders that it did not need to pay out for big disasters.
The world's largest reinsurer said preliminary net profit for 2014 was around 3.2 billion euros ($3.6 billion), down slightly from 3.3 billion the previous year but in line with the average expectation in a Reuters poll of banks and brokerages.
Payouts for major losses fell to 1.2 billion euros from 1.7 billion the year before, but a deterioration in reinsurance market prices is making it increasingly difficult for Munich Re and peers like Swiss Re or Hannover Re to sell reinsurance cover at a price commensurate with the risk.
That trend continued in January, when Munich Re renewed more than half of its property casualty reinsurance business with insurance companies. The volume of business dropped by 9.5 percent to around 8.5 billion euros as of Jan. 1, while prices fell by 1.3 percent, Munich Re said.