Ergo Posts $271M Q1 Net Loss on Investment Writedowns
Germany’s Ergo Group, the primary insurance division of Munich Re, followed its parent in announcing a first quarter net loss of 231 million euros ($271 million), compared to a profit of 106 million euros ($124.5 million) for the same period of 2002. Munich Re announced a $280 million Q1 net loss yesterday. (See IJ Website June 2)
The losses in both cases were largely caused by lower investment returns, combined with declines in equity values. Ergo decreased the value of its securities holdings by 539 million euros ($633 million) during the period and also posted 799 million euros ($939 million) in losses on securities it sold.
The losses came despite increases in premium volume. The Ergo group’s gross premiums written rose to 4.2 billion euros ($4.94 billion) in the first quarter of 2003, compared to 3.9 billion ($4.58 billion) in the same period last year.
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