German reinsurer Munich Re has reported a net profit of €710m ($933m) for 2011, down from €2.43bn in 2010, on gross premiums written of €49.6bn, up from €45.5bn. A solid performance from primary insurance – where there was a gain of €760m compared with €660m the previous year – could only partly counterbalance a significant deterioration in the reinsurance result, where profit fell to €770m from €2.10bn. The combined ratio in reinsurance rose to 113.6% from 100.5%, while the primary insurance combined ratio rose to 97.8% from 96.8%. The investment result declined to €6.8bn, from €8.6bn the previous year. Shareholders' equity rose over the year to €23.3bn, from €23.0bn at the beginning of the year, helped by a €550m tax gain that was mainly due to the tax deductibility of the natural catastrophes in 2011 and the relief effect of earlier losses in the US. Writedowns on Greek sovereign debt were €1.2bn for the year and €200m for Q4. The company is maintaining its dividend at €6.25 a share. Munich Re's primary operation Ergo recorded a combined ratio of 93.1% in Germany, up from 89.8% in the previous year; the insurance operation improved its international combined ratio to 105.0% from 107.8%. Munich Re said that this was still "too high", but that progress was being made. Munich Re's small but growing third sector – Munich Health, booked a gain of €50m, down from €60m in 2010, on income up 19% year on year to €6.1bn. The short-term health business had a combined ratio of 99.4% for 2011, down from 99.7% the previous year. For 2012 the reinsurer expects a net result at about the level achieved prior to 2011, with a significantly improved technical result.