Reinsurance News

PartnerRe falls to loss for Q3 & 9M 2022 on catastrophes, unrealised losses on investments

10th November 2022 - Author: Luke Gallin

Bermuda-based PartnerRe has reported a net loss of $387 million for the third quarter of 2022 as the firm records a non-life underwriting loss of $100 million on the back of losses related to Hurricane Ian of $300 million, and unrealised losses on fixed maturities and short term investments of $499 million.

PartnerReThe Q3 2022 loss compares with net income of $70 million a year earlier, when PartnerRe posted a non-life underwriting profit of $4 million amid catastrophe losses of $297 million.

For this year’s quarter, the non-life combined ratio has deteriorated year-on-year to 106.9%, compared with 99.8% last year.

Across the group, the operating performance also suffered this year and fell to a loss of $62 million, which the firm attributes to the $300 million of Hurricane Ian losses, net of retrocession and reinstatement premiums.

Group-wide, gross written premiums (GWP) increased by 3% for the quarter and net premiums written (NPW) by 6%.

Tremor - The modern way to place reinsurance

Within its non-life business, NPW increased by 5% for the quarter on the back of growth of 10% in the property and casualty (P&C) segment.

Within P&C, PartnerRe has reported a combined ratio of 112% for the quarter compared with 105.9% a year earlier. The firm notes that as well as catastrophe losses, the higher combined ratio was driven by an increase in the acquisition cost ratio resulting from a change in business mix.

The specialty segment produced a combined ratio of 93.3% for the quarter, which is up on the 86.6% posted a year earlier. The carrier says that excluding the impact of catastrophes and man-made disasters, the combined ratio was stable.

In its life and health (L&H) business, NPW for Q3 were up 7% on the back of growth in long-term protection and longevity business.

The L&H allocated underwriting profit reached $48 million for Q3 2022, up on the $22 million from a year earlier, driven by an improvement in year-over-year experience related to the COVID-19 pandemic, and improvements in the short-term protection and longevity business.

Turning to the reinsurer’s performance for 9M 2022, and operating income across the group totalled $439 million, although the firm has posted a net loss for the period of more than $1.5 billion, due to unrealised losses on fixed maturities and short term investments of over $1.9 billion.

For 9M 2022, GWP increased by 8% and NPW 9%. Non-life NPW increased by 11% in 9M 2022, again driven by the P&C segment which experienced growth of 17% in the period.

The non-life underwriting result was better for the nine month period, coming in at a profit of $381 million with a combined ratio of 90.7%, compared with profit of $194 million and a combined ratio of 95% a year earlier.

In terms of large losses, PartnerRe has booked a cost of $434 million for 9M 2022, driven by Hurricane Ian, the ongoing war in Ukraine, the Natal floods, and the Australian floods.

The P&C division has produced a combined ratio of 91.9% for 9M 2022 compared with 99.4% in 9M 2021. Excluding large losses, the firm attributes the improved 9M combined ratio to lower current accident year attritional losses by rate increases and reductions in less profitable lines of business, as well as prior years’ reserve development.

The specialty unit’s combined ratio was 88% for 9M 2022 compared with 86.7% a year earlier, driven by an improvement in the current accident year attritional loss ratio.

Within L&H, NPW increased 4% for the first nine months of the year, as the allocated underwriting profit increased from $65 million to $92 million.

On the asset side of the balance sheet, net realised and unrealised investment losses were $432 million for the quarter and $2.2 billion for 9M 2022.

Jacques Bonneau, the company’s President and Chief Executive Officer (CEO), commented: “Our thoughts are with those impacted by the quarter’s catastrophic activity. Hurricane Ian was a significant industry event, and the strength and resilience of our balance sheet allows us to remain a trusted business partner to our clients in times of need.

“Despite such a significant industry event, our continuous focus on portfolio optimisation enable us to deliver strong operating income of $439 million for the first nine months of the year, with an annualised operating return on equity that has nearly doubled to 9.1%. As we head into renewal season, our capital base remains strong, reinforced by the scale and capital strength of the Covéa group, and we are positioned to further increase the value that we provide to our clients, distribution partners, capital partners and other stakeholders.”

Print Friendly, PDF & Email

Recent Reinsurance News