Bermuda domiciled reinsurer PartnerRe has reported a non-life underwriting profit of $40 million and a combined ratio of 96.7% for the first quarter of 2021, despite $104 million of net losses from Winter Storm Uri.
The non-life underwriting performance represents a marked improvement from the loss of $46 million and combined ratio of 103.8% reported for the same period in 2020.
Within PartnerRe’s non-life business, the P&C segment reported a combined ratio of 97.7% for Q1 2021 against 94.3% for the prior year quarter.
During the opening quarter of the year, the firm says that there was no change to its non-life net loss estimate of $371 million established for COVID-19 in 2020.
The reinsurer notes that despite improvements in the technical ratio from business mix changes, the loss ratio increased, year-on-year, on the back of $97 million of losses related to Uri, net of reinsurance and reinstatement premiums.
The company’s Specialty segment has reported a combined ratio of 94.8% for Q1 2021 versus 121.1% for the prior year quarter. PartnerRe attributes the improvement to lower adverse prior years’ reserve development. Additionally, the technical ratio declined owing to a reduction in the acquisition cost ratio, as well as a decline in catastrophe losses.
First quarter 2021 cat losses in the Specialty division included $7 million of losses related to Uri, against $18 million of pandemic-related losses in the first quarter of 2020.
All in all, non-life net premiums written increased by 8% for Q1 2021, driven by a 12% increase in the P&C division and was supported by improved pricing conditions during the period.
Turning to the carrier’s Life & Health (L&H) business, and net premiums written increased by 11% for Q1 2021, when compared with the prior year quarter.
The L&H unit has produced an underwriting profit, including allocated net investment income, of $20 million for Q1 2021, compared with profit of $18 million a year earlier.
PartnerRe attributes the increase primarily to favorable movements in the guaranteed minimum death benefits line of business, partially offset by higher claims in the long-term protection business and $12 million of COVID-19 related losses incurred in Q1 2021.
PartnerRe’s net investment return for Q1 2021 was a loss of $19 million, and included net realized and unrealized investment losses of $136 million, which were partially offset by net investment income of $87 million and interest in earnings of equity method investments of $30 million.
Across its operations, PartnerRe has reported a net loss of $66 million for the first quarter of 2021, driven by $344 million of net unrealized losses on fixed maturities due to risk free rate movements which are recorded at fair value. The company says that this mark to market volatility was somewhat offset by $83 million of realized gains on private equities and $107 million of net unrealized gains on equities and other invested assets.
Jacques Bonneau, PartnerRe President and Chief Executive Officer (CEO), commented: “The 2021 underwriting year started on a positive note from a pricing perspective, and we have seen continued momentum throughout our April 1 non-life renewals, while remaining focused on the execution of our strategy to improve profitability.
“We are seeing positive rate movement in most, if not all, of our lines of business while achieving price improvements in new and renewal business of approximately 9% for our non-life portfolio through April 1. We were also able to reduce our exposures on poorly performing lines and programs as we continue to drive for increased margins.
“The underwriting improvements in the first quarter were masked by Winter Storm Uri. The favorable pricing conditions, combined with the benefits we are seeing from our re-underwriting actions and significant growth in third party capital, position us well to deliver improvements in our underwriting and financial results during the remainder of 2021.”