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PartnerRe grows book at 1/1 after delivering positive 2017 returns

22nd February 2018 - Author: Steve Evans

Reinsurance firm PartnerRe saw double-digit growth in its non-life book at the January 2018 renewals in the wake of a year characterised by catastrophe losses, but one in which the company delivered a positive return to its shareholders.

PartnerRe logoThe EXOR owned reinsurer from Bermuda, PartnerRe reported net income of $72 million for the fourth-quarter of 2017, compared to a net loss of $191 million for Q4 2016, and net income of $218 million for the full year 2017 compared to $387 million for 2016.

In the fourth-quarter PartnerRe was hit by losses from the California wildfires, which cost the firm $120 million during that period.

For the full-year and taking into account losses from hurricanes Harvey, Irma and Maria, as well as the wildfires in California, PartnerRe said that its losses came to $569 million in aggregate, adding 15.4% to its combined ratio.

The reinsurer said that it paid out $148 million of losses for the hurricanes and wildfires in Q4 alone.

On an operating basis the reinsurer fell to a $28 million loss for Q4 and a $1 million loss for the year, with a combined ratio of 100.7% for Q4 and 99.3% in non-life, but across the business the company managed a positive return for its investors.

In specialty lines, PartnerRe delivered an 85.7% combined ratio for the year and 92.5% for Q4. The life and health business fell to a loss though, after an increase in the frequency of large claims from underwriting years 2015 to 2017 primarily in Affordable Care Act related programs in the health business. The life business was positive at a $67 million gain for the year though.

PartnerRe is making good progress in its strategy since the EXOR acquisition and performance, despite the impacts of catastrophes, will have pleased its backers.

PartnerRe President and Chief Executive Officer Emmanuel Clarke, explained, “In 2017, in the face of industry insured losses in excess of $100 billion, we delivered solid financial results with adjusted net income of $250 million and an adjusted ROE of 4.2%. This remarkable performance demonstrates the value of our underwriting discipline, our portfolio construction with highly diversified and profitable business segments and our gross-to-net strategy. Together these have enabled us to deliver positive returns to our shareholders in a year marked by high frequency of severe catastrophes.”

The reinsurer took advantage of higher pricing at the January 2018 renewals, which allowed the firm to expand its book.

Clarke commented on pricing at the renewal, “We have started 2018 on a very positive note, with strong execution at the January renewals where we benefited from pricing improvements across a broad span of our portfolio with a double- digit rate increase in North America Property Cat rates along with improving profit margins in most of our Specialty lines and other P&C segments globally.”

As a result of these increases seen the company has an enlarged portfolio for 2018, through which it hopes to deliver a higher return for its shareholders over the year ahead.

“We have leveraged opportunities to expand our business relationships with our clients and brokers and further improve our portfolio, with double digit year-on-year growth in Non-Life renewable treaty premium. I am very confident that we will continue to build on these achievements to deliver great results in 2018,” Clarke said.

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