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Munich Re weathers natural disasters to deliver profits

German re-insurance giant Munich Re posted Thursday a 2010 net profit of €2.43 billion ($3.35 billion) despite heavy losses from natural disasters and promised shareholders an improved dividend.

Munich Re weathers natural disasters to deliver profits
The aftermath of Chile's devastating earthquake in April 2010. Photo: DPA

The result represented a slide of five percent from the 2009 figure of €2.56 billion but was in line with an average analyst forecast of €2.46 billion compiled by Dow Jones Newswires.

Shares in the re-insurance group showed a slight gain in early trading.

Total losses from natural catastrophes last year amounted to roughly €1.56 billion, more than seven times the 2009 figure of €200 million, a statement said.

“Despite weighty major losses, which also affected us at the end of the year, we are presenting a good result,” finance director Joerg Schneider said. “Our shareholders are to benefit without delay.”

Munich Re’s board will recommend an increased dividend of €6.25 per share, up from with €5.75 in 2009, he said.

The group also planned to buy back shares worth €500 million before its annual general meeting in 2012, the statement said.

Gross premiums written by the group last year gained almost 10 percent to €45.5 billion.

But the world’s biggest re-insurance company in terms of gross premiums was hit like its rivals by a series of natural disasters in 2010, the largest of which for Munich Re was “the devastating earthquake in Chile,” it said.

An earthquake in New Zealand and flooding in northeastern Australia lead to respective claims of €340 million and €270 million. Looking ahead, Munich Re said only that in 2011, it “expects a somewhat better technical result than in 2010 and a consolidated result of around the same level.”

Digging into the data, Munich Re’s income from investments showed a gain of almost 10 percent last year to €8.6 billion.

And the ERGO insurance group, in which Munich Re has concentrated its primary insurance activities, reported a profit of €355 million, more than double the 2009 figure of €173 million.

Shares in the group edged 0.13 percent higher to €117.50 in opening trading on the Frankfurt stock exchange, while the DAX index of German blue-chips was flat overall.

AFP/rm

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PROPERTY

How to ensure your French property is insured for storm damage

Storm Ciaran’s property-wrecking passage through France - with another storm forecast for the weekend - may have many people wondering how comprehensive their insurance cover is. 

How to ensure your French property is insured for storm damage

In the wake of Storm Ciaran, thousands of property owners in France are preparing insurance claims – with initial estimates of the bill for damage between €370 million and €480 million.

Home insurance is compulsory in France, whether you own the property you live in or you rent – and it must include some level of storm damage cover. 

Check also to see if your insurance provides cover in case of a declaration of a catastrophe naturelle.

The garantie tempête (storm guarantee) covers damage caused by violent winds. What constitutes a ‘violent wind’ varies from contract to contract, but there appears to be a widespread consensus of agreement on wind speeds over 100km/h.

In most insurance contracts, this covers damage caused by the storm and within the following 48 hours – so you’re covered if, for example, a tree weakened by the storm comes down within that period and damages your property.

Be aware that, while the storm guarantee automatically covers the main property, it generally only covers any secondary buildings and light constructions – such as a veranda, shed, solar panels, swimming pool or fence – if they are specifically mentioned in the contract. 

The same is true of any cars damaged by debris. A basic insurance contract might not include storm damage, so it is always worth checking.

Damage must be reported to your insurer as quickly as possible. The deadline for making declarations is usually five days after any damage is noticed. This is especially important for second home owners, who may not be at the property when the damage occurs. 

In some cases – such as in the aftermath of Storm Ciaran – insurers may extend the reporting period. But under normal circumstances, it’s five days after the damage has been discovered.

What happens next

To make a claim, the first thing to do is contact your insurer by phone or email. Your insurer will take you through the next steps, but usually you have to send in a declaration – which should include an estimate of any losses and for any repairs, with evidence where possible, such as photographs and any receipts for purchases. 

Your insurer may also request proof of wind intensity, which can be provided for example by a nearby weather station.

The insurance company may appoint an expert to come and assess the damage, so make sure to keep damaged property safe until they arrive, as well as all invoices for any urgent repair work. 

What if you’re a tenant?

If you rent your property, you must report any damage inside the accommodation to your insurer and also notify your landlord so that they can file their own claim. 

In the case of a co-propriete, you must declare damage inside the accommodation to your insurer, while the trustee sends his own declaration to the collective insurance (which sometimes covers the private areas) .

How long does it take for claims to be settled?

Payment of the compensation provided for by the “storm guarantee” depends your home insurance contract. After the insurer has estimated the amount of damage, compensation is generally paid between 10 and 30 days following receipt of the insured’s agreement.

What if we got flooded?

In the case of flooding, you may have to wait for a natural disaster order to be issued. 

Catastrophe naturelle

The ‘state of natural disaster’ is a special procedure that was set up in 1982 so victims of exceptional natural events, such as storms, heavy rain, mudslides and flooding, as well as drought, can be adequately compensated for damage to property.

The government evaluates each area and deems whether it qualifies for the status of catastrophe naturelle (natural disaster). 

Essentially once a zone is declared a natural disaster, victims can claim from a pot of funds created by all insurers. If the zone is not declared a disaster, insurance companies are under no obligation to pay out. 

Under a “state of natural disaster” residents are covered for all those goods and property that are directly damaged by the phenomenon, in this case storms.

It applies to residential or commercial buildings, furniture, vehicles and work equipment that are already covered by insurance policies.

Homes must be already covered by a multi-risk insurance policy for the status of natural disaster to count.

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