Reinsurance News

PartnerRe falls to net loss as investment result offsets improved underwriting in 1H22

4th August 2022 - Author: Luke Gallin

Bermuda-based reinsurer PartnerRe has reported a loss of more than $1.1 billion for the first half of 2022, driven by unrealised losses on fixed maturities as a result of rising interest rates, while the firm’s underwriting performance improved year-on-year.

PartnerReThe reinsurer’s H1 net loss includes a loss of $606 million in the second-quarter of the year, and comes on the back of unrealised losses on fixed maturities of $591 million and $1.4 billion for Q2 and H1 2022, respectively. PartnerRe’s net investment return in Q2 2022 was a loss of $891 million, rising to a loss of $1.5 billion for H1 2022.

While the investment result has significantly dented the company’s performance so far in 2022, on the underwriting side, PartnerRe has reported some notable improvements in both periods.

Starting with non-life operations, net premiums written increased by 8% for Q2 and by 13% for H1 2022, driven by the P&C division, which saw increases of 13% and 19%, respectively. PartnerRe attributes this to growth in the current underwriting year and additional premiums from prior underwriting years.

Overall, the non-life underwriting profit increased from $150 million in Q2 2021 to $282 million in Q2 2022, and from $190 million in H1 2021 to $481 million in H1 2022. The better underwriting result is reflected in a stronger combined ratio for both periods, at 79.3% for Q2 and 81.9% for H1 2022.

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In terms of large losses, the Bermudian has reported that, net of retrocession and reinstatement premiums, these reached $45 million in Q2 2022, and included $41 million related to the Natal floods, and $4 million related to the flooding in Australia. For the first six months of the year, large losses, net of retrocession and reinstatement premiums, hit $131 million and included $41 million related to the Natal floods, $40 million related to the flooding in Australia, and $50 million related to the ongoing war in Ukraine.

Within non-life, PartnerRe has reported that the P&C segment produced a combined ratio of 79.2% and 80.2% for Q2 and H1 2022, respectively, which is an improvement on the prior year for both periods. In the Specialty segment, the firm reports a combined ratio of 79.6% for Q2 2022 and 85.5% for H1 2022, compared with 79.5% and 86.9% in 2021, respectively.

Turning to Life and Health (L&H), and PartnerRe has reported that net premiums written increased by 6% for Q2 and by 3% for H1 2022, which reflects growth in long-term protection and longevity business.

This part of the business has produced a positive underwriting result of $60 million for Q2 and $44 million for H1 2022, compared with $23 million and $43 million a year earlier, respectively.

PartnerRe says that the higher underwriting profit is a result of an improvement in year-over-year experience related to COVID-19 and improvements in the short-term protection and longevity business, partly offset by higher losses on the long-term protection business.

PartnerRe’s President and Chief Executive Officer (CEO), Jacques Bonneau, commented: “With the completion of Covéa’s acquisition of PartnerRe in early July, we are excited to join a group with such an established history, strong brand and robust financial strength. As our financial results for the half year demonstrate, with an annualized operating return on equity of 15.0%, an improvement in our non-life combined ratio of 10.5 points year-over-year, and our growing life operations and third party capital management, we believe we can make an immediate contribution to the Covéa group.

“I am thankful for our relationship with Exor, which we will continue through their meaningful contribution to our third-party capital platform. We look forward to our future with Covéa and to further
increasing the value that we provide to all of our clients, distribution partners, capital partners and other stakeholders.”

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