MUNICH RE HIKES DIVIDEND DESPITE RISE IN STORM LOSSES

German reinsurer Munich Re has raised its dividend by 455% to 3.10 euro, despite revealing that last year’s storms caused it losses of 1.5bn euro, nearly twice the previous estimate. The reinsurer attributed the increase to hurricane Wilma, which was not included in the previous estimates, and to a large number of delayed claims as a result of hurricane Katrina. Munich Re said that it was able to achieve its profit target for the year because substantial capital gains counterbalanced the heavier-than-normal storm losses. Earnings also benefited from a 1.15bn euro gain via a swap of HVB shares into UniCredito Italiano stock, plus a 552m euro gain through the sale of a stake in Allianz. The company also sold a stake in Commerzbank in June. Munich Re said that industry natural catastrophe losses in 2005 were more than $75bn, nearly twice the level of 2004 — itself a poor year. Of the losses in 2005, $60bn were attributable to the US hurricanes, with Katrina alone making up $45bn — $15bn more than Munich Re’s previous estimate.