UPDATE 1-Munich Re warns on outlook despite good Q1

* Q1 net 482 mln eur after minorities vs poll avg 387 mln

* 2010 goal “increasingly ambitious” due damage claims

* Q1 reinsurance combined ratio 109.2 vs 97.3 year-earlier

(Adds detail, background)

FRANKFURT, May 7 (BestGrowthStock) – Munich Re (MUVGn.DE: ) warned on
Friday that high payouts for natural catastrophe claims made its
goal of delivering over 2 billion euros ($2.68 billion) in net
profit this year look “increasingly ambitious”.

The world’s biggest reinsurer beat expectations with a
surprise 11 percent rise in net profit to 482 million euros in
the first quarter, helped by surging investment income.

The first-quarter result, which reflected high damage
payouts, was above the 387 million euro average expectation in a
Reuters poll of 17 banks and brokers, and also up from 433
million euros in the year-earlier quarter.

Damage claims in the first three months from a devastating
8.8 magnitude earthquake in Chile and a wind storm in Europe
pushed it to an underwriting loss in the first quarter, which
was offset by a 80 percent surge in investment income on the
back of buoyant financial markets.

Munich Re, in which star U.S. investor Warren Buffett owns a
stake of nearly 8 percent, has seen its share fall by 4.2
percent so far this year, compared with a drop of nearly 9
percent in the Stoxx Europe 600 Insurance Index (.SXIP: ).

Data from Thomson Reuters StarMine, which weights analysts’
forecasts according to their track record, shows Munich Re
trading at 8.6 times 12-month forward earnings, a slight premium
to global No. 2 reinsurer Swiss Re’s (RUKN.VX: ) multiple of 8.3.

The company also said on Friday that it planned spend up to
1 billion euros to buy back up to 15 million of its own shares,
equivalent to about 5 percent of its share capital, by the time
of its next annual shareholder meeting on April 20, 2011.

Investment Research

UPDATE 1-Munich Re warns on outlook despite good Q1