Reinsurance News

Typhoon losses push PartnerRe to $188mn Q4 underwriting loss

3rd March 2020 - Author: Matt Sheehan

Bermuda-based reinsurance firm PartnerRe has posted a non-life underwriting loss of $188 million for the fourth quarter of 2019, driven by Japanese typhoon losses and attritional losses on agriculture business.

PartnerReThe company incurred catastrophic losses of $133 million from Typhoon Hagibis and $39 million of adverse development on Typhoon Faxai, as well as a $82 million technical loss in the agriculture line of business from higher attritional losses.

This compared to Q4 2018, when PartnerRe reported a $67 million non-life underwriting loss.

PartnerRe’s non-life combined ratio for the quarter was 113.8%, compared with 108.7% for the same period in the prior year.

Looking at the full year, the company reported a non-life underwriting loss of $20 million and a combined ratio of 100.3%, compared with a loss of $47 million and a combined ratio of 101.9% in 2018.

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The improvement in combined ratio was attributed to the P&C segment, which had a combined ratio of 98.7% in 2019 compared to 108.7% previously, reflecting an improvement in the attritional loss ratio and a decrease in losses related to large catastrophic events.

PartnerRe’s P&C segment incurred a total of $258 million of losses related to Typhoons Hagibis and Faxai and Hurricane Dorian in 2019, contributing 8.4 points to the combined ratio,

For comparison, in 2018 losses related to Typhoons Jebi and Trami, Hurricanes Florence and Michael, and California wildfires contributed 15.1 points to the combined ratio.

This performance was partly offset by the Specialty segment, which recorded a combined ratio of 103.0% for 2019 compared to 91.9% in 2018, driven by net adverse prior years’ reserve development and a large loss on Ethiopian Airlines and Boeing of $42 million.

PartnerRe noted that the non-life combined ratio also continues to reflect net favorable prior years’ reserve development of $75 million (5.5 points) and $57 million (1.1 points) for the fourth quarter and full year 2019, respectively.

The reinsurer also reported an underwriting loss of $3 million for its Life and Health business in Q4, but managed to turn a profit of $73 million for the full year.

That said, profits were still lower than in 2018, reflecting adverse experience in PartnerRe’s short-term life business, higher expenses to support growth in the business and higher annual incentive bonus payment to employees.

Commenting on the results, PartnerRe President and Chief Executive Officer Emmanuel Clarke said, “In the fourth quarter of 2019, our Non-Life combined ratio was impacted by losses related to Typhoon Hagibis and in the agriculture line of business, whose impact on book value has been mitigated by strong investment performance.”

“Notwithstanding challenging Non-Life performance in the fourth quarter, the Company reported solid net income to common shareholder in 2019, driven by investments results and contribution from our Life and Health segment,” Clarke continued.

“PartnerRe has taken actions to improve its Non-Life underwriting performance in 2020, leveraging improved Non-Life market conditions at the January renewal and ongoing portfolio optimization actions.

He added: “With further margin improvement expected in our Non-Life portfolio during the course of the year, and continued growth in Life and Health, I am confident we will be able to deliver in 2020 solid growth in book value for our shareholder.”

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