Bermuda domiciled reinsurer PartnerRe has announced net income of $216 million for the third-quarter of 2019 compared with a net loss of $106 million for the same period in 2018, supported by net realised and unrealised gains and an improved property and casualty (P&C) performance.
The reinsurer has announced net realised and unrealised gains of $41 million on fixed maturities and short-term investments, and $39 million net foreign exchange gains, for Q3 2019. This compares with net realised and unrealised investment losses on fixed maturities and short-term investments of $73 million, and $17 million of net foreign exchange losses, in Q3 2018.
Also supporting the firm’s significantly improved net income in the quarter was PartnerRe’s non-life segment, which recorded underwriting profit of $49 million and a combined ratio of 96.4% in Q3 2019, compared with an underwriting loss of $87 million and a combined ratio of 107.8% a year earlier.
PartnerRe notes that the improvement in non-life was driven by its P&C segment, which reported a combined ratio of 99.4% versus 114.7% a year earlier. The reinsurer attributes this improvement to a reduction in the attritional loss ratio and a decline in losses from large catastrophe events.
Catastrophe losses in the quarter came from hurricane Dorian and typhoon Faxai and totalled $93 million, pre-tax, net of retrocession and reinstatement premiums, contributing 11.5 points on the P&C combined ratio. This compares with losses of $120 million or 17.9 points on the combined ratio in Q3 2018.
Non-life premiums written grew 17% year-on-year, driven by a 12% increase in P&C premiums and a 25% increase in specialty premiums.
The Bermuda-based reinsurer also reveals that its specialty segment recorded an improved combined ratio of 91.7% in Q3 2019 versus 97.4% in the prior year quarter, driven by lower attritional losses on the current accident year.
PartnerRe’s President and Chief Executive Officer (CEO), Emmanuel Clarke, said: “Our third quarter results were highlighted by improved year-on-year profitability in the Non-Life and Life & Health segments, increased Investments contribution from both net investment income and realized gains and a lower expense ratio. We achieved double digit growth in net premium written in both the Non-Life and Life & Health segments, benefiting from an improved pricing and underwriting environment in NonLife and from the continued execution of our Life & Health growth strategy.
“We are very focused on delivering further underwriting margin improvement in 2020, helped by a Non-Life pricing environment we expect to continue to firm. With our capital and book value up 9.9% and 14.2% respectively for the year, we are well positioned to capitalize on selective growth opportunities with improved margins and attractive returns, while reducing our exposure to underperforming segments.”
The reinsurer’s life and health segment recorded net premium growth of 19% for the third-quarter of 2019 when compared with a year earlier, while the allocated underwriting result hit $31 million for Q3, versus $18 million a year earlier.
Turning to investments, and PartnerRe has recorded a net investment return of $225 million for the third-quarter of 2019, driven by net investment income of $109 million, net realised and unrealised gains of $114 million and interest earnings of equity method investments of $2 million.