At €579m ($630m), Munich Re's operating result in the third quarter was well below the €908m posted in the same quarter last year. "Overall, the result for the third quarter was marked by one-off effects that were negative on balance, particularly with regard to investments," the reinsurer said.
With a carrying amount of €235.4bn, total investments (excluding insurance-related investments) at 30 September 2015 were almost unchanged from the year-end 2014 figure of €235.8bn.
For the period July to September 2015, the group's investment result (excluding insurance-related investments) showed a year-on-year decrease of 8.3% to €1.5bn (€1.7bn). The investment result represents an overall return of 2.6%.
Changes in the value of derivatives had an adverse impact of €160m in the third quarter, which was significantly more negative than in the second quarter of the year (€133m).
Munich Re commented that, owing to the decline in commodity prices and decreased inflation expectations, the third quarter saw high losses posted on commodity and inflation derivatives, especially in reinsurance. By contrast, in primary insurance the decline in interest rates in the third quarter had a positive impact on interest-rate hedging instruments, and equity-based derivatives also saw a price-related increase in value.
The balance of gains and losses on disposals excluding derivatives was €514m in the third quarter. Because of temporarily sharp setbacks in prices on the stock exchanges, gains on the disposal of equities were relatively low in the third quarter, according to Munich Re. Gains realised on fixed-interest securities were also lower than in the previous quarters.
With a share of around 88% at market value, fixed-interest securities, loans and short-term fixed-interest investments continued to make up the largest portion of Munich Re's investments.
CFO Jörg Schneider said: "In view of the low-interest-rate environment, we are very satisfied with the 3.3% return on our investments for the first nine months of the year."
The group's asset manager is MEAG, whose assets under management at 30 September 2015 included not only group investments but also segregated and retail funds totalling €13.8bn (€13.9bn).
As a result of the negative factors experienced in the third quarter, Munich Re has amended its investment forecast for the full year and now projects a return on investment of around 3.0% instead of around 3.3%.