Munich Re, the world’s second-biggest reinsurer, revised its full-year profit target to include restructuring charges at its primary insurance unit and losses on equity investments that hit first-quarter earnings. The shares fell to the lowest in more than eight months.

Munich Re’s new profit target of 2.3 billion euros ($2.6 billion) now includes restructuring costs at the Ergo primary-insurance unit, the company said in a statement on Tuesday. The previous target ranged from that figure to as much as 2.8 billion euros. First-quarter net income fell to 430 million euros from 790 million euros a year ago, missing the 634 million-euro average of seven analyst estimates compiled by Bloomberg.

“We had to cope with significant strains on our investment result,” Chief Financial Officer Joerg Schneider said in the statement. “The decrease in profits in the first quarter has dampened our optimism with regard to the annual result. It is looking more and more likely that there will be high costs for implementing the strategy program at Ergo.”

Munich Re dropped as much as 3.1 percent to 158.15 euros in Frankfurt, the lowest since Aug. 26. The shares traded at 158.55 euros at 1:30 p.m., bringing this year’s decline to about 14 percent. The Bloomberg Europe 500 Insurance Index has lost 15 percent during the same period.

Market Turmoil

Chief Executive Officer Nikolaus von Bomhard last month told shareholders that first-quarter profit will be lower than a year earlier, missing the company’s expectations, after market turmoil caused the company to write down equity investments. He also called Munich Re’s profit target for the year “ambitious,” while saying he was confident of keeping a stable dividend payout.

CFO Schneider said in an interview on Bloomberg Television on Tuesday that “there are no doubts that we can continue with the current dividend at least.”

The results “should not be a surprise. Underlying underwriting results were strong, with low weather related losses and higher than expected reserve releases, but this was more than offset by weaker investment income,” Barclays Plc analysts Alan Devlin and Aayushi Pabari wrote in a note to clients.

Commenting on Ergo’s restructuring costs, Schneider said that “the amount is not yet definitive, but it is unlikely that Ergo will post a positive annual result this year.” Ergo CEO Markus Riess will present details on the expenses by the end of June.

Restructuring Costs

“We are absolutely committed to Ergo, the integrated business model of reinsurance and primary insurance makes a lot of sense,” Schneider said in the interview. “Ergo restructuring costs are not definitive at the moment but we expect that there will be a lot of investments which will give us good prospects for the future. It’s worth the price.”

Von Bomhard, 59, will hand over the top post to management board member Joachim Wenning in April 2017. Reinsurers help primary insurers shoulder disaster claims. As losses from natural catastrophes remain below average, prices for their coverage have declined since 2013, according to the Guy Carpenter World Property Catastrophe Rate on Line Index. Industry earnings also face pressure from record-low interest rates.

First-quarter investment income declined to 1.57 billion euros from 1.82 billion euros a year ago as gains from disposals dropped to 218 million euros from 998 million euros. The company wrote down 150 million euros on its equity holdings after a 31 million-euro charge a year earlier.