Munich Re said full-year net income (before minority interests) grew from 3.9 billion euros ($5.8 billion) from 3.5 billion euros in 2006, beating the firm’s profit projections.
What Munich Re didn’t have was a huge amount of subprime-related losses. The firm reduced its subprime-exposed investments to less than 0.2 percent of its overall investment portfolio in September. As a result, it posted losses of less than 10 million euros in the fourth quarter.
Munich Re CFO Joerg Schneider said, “Our restraint with regard to credit risks in recent years, because risk spreads were completely inadequate, is now paying off for us.”