Munich Re stands by forecasts after difficult third quarter

German reinsurance giant Munich Re said Thursday it is sticking to its full-year profit target even though the recent turbulence on financial markets hit earnings in the third quarter.

"For the current financial year, Munich Re is still aiming for a profit of at least 3.0 billion euros" ($3.3 billion), the company said in a statement.

In 2014, net profit amounted to 3.2 billion euros.

In the period from July to September, bottom-line profit fell by 28.7 percent to 525 million euros.

Underlying or operating profit was down 36.2 percent at 579 million euros on 3.6-percent increase in gross premium income to 12.481 billion euros.

"With a quarterly profit of 525 million euros, we remain on course for another gratifying result for the year," said chief financial officer Joerg Schneider.

"The capital market turbulences have left their mark on the investment result" in the third quarter, Schneider cautioned.

Divestments had generated below-average gains, the reinsurer was compelled to write down its equity holdings and it had sustained losses from derivative hedging instruments.

Global financial markets have been hit recently by concerns about the fallout from an economic slowdown in China.

Overall expenditure for major losses totalled 386 million euros in the third quarter, Munich Re said, with natural catastrophe losses amounting to 62 million euros, down from 100 million euros in a year earlier.

By contrast man-made major losses increased to 324 million euros from 158 million euros.

The highest natural catastrophe loss resulted from a severe earthquake off the coast of Chile in mid-September, for which Munich Re said it was anticipating net expenditure of 45 million euros.

Munich Re said it expected net expenditure of 175 million euros for the largest man-made loss, the explosion disaster in the port of Tianjin, China.