Munich Re feels pinch of low interest rates

German reinsurance giant Munich Re said Thursday that its profits were hit by the low-interest rate environment in the first quarter, but it is standing by its full-year targets.

"Munich Re has started off 2015 with a pleasing quarterly profit," the company said in a statement.

Net profit for the period from January to March declined by 15.6 percent to 790 million euros ($898 million).

Underlying or operating profit fell by 25 percent to 995 million euros while gross premium income inched 0.9 percent higher to 13.038 billion euros.

Chief financial officer Joerg Schneider said he was satisfied with the first-quarter figures.

"We have started off well, although investment has again been made more difficult by the expansive policies of the central banks. We are well on track to achieve our result target of 2.5–3.0 billion euros for the year as a whole," he said.

Munich Re said it expects full-year gross premiums to amount to 49–51 billion euros, more than previously anticipated as a result of positive currency translation effects.

The profit forecast was "subject to large losses being within normal bounds and to its profits not being affected by severe movements in exchange rates or the capital markets, significant changes in fiscal parameters, or other exceptional factors," it said.

"Our good capital position allows us to continue making targeted use of opportunities for profitable growth in individual regions and lines of business. In the long term, above all we want to grow profitably with innovative business," said Schneider.