News Summary: Fewer disasters a boon for Munich Re

News Summary: Few disaster losses, improved investment results lift reinsurer Munich Re income

Associated Press

PROFIT JUMPS: Reinsurer Munich Re said second-quarter net income rose 10 percent to 812 million euros ($1.0 billion). The company, which provides backup insurance for primary insurers so they can cover claims, benefitted from fewer claims due to natural disasters during the period.

GREEK DEBT: Munich Re also did not have to write down Greek government bonds during the quarter, as it did last year. The company reduced its investment risk by shifting some holdings to safer investments such as U.S. Treasuries and German government bonds.

LOW INTEREST RATES: The low returns on those safer investments could weigh down profit in the future, Munich Re said. Central banks including the U.S. Federal Reserve, the Bank of England and the European Central Bank have cut interest rates to record lows, leading to tiny or even negative returns on some extra-safe government bonds.

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