Cat losses hit PartnerRe’s Q3 results but it eyes better rates ahead
PartnerRe made a big loss in the third quarter of 2017 because of cat losses related to the hurricanes Harvey, Irma and Maria. But the company also enjoyed continued steady growth and said it anticipates improving pricing conditions.
The reinsurer made a net loss of $84 million in the third quarter of 2017 compared with net income of $240 million for the same period of 2016. Operating losses were $113 million for the third quarter of 2017 compared to operating gains of $185 million for the same period of 2016.
This was almost entirely driven by hurricane-related losses of $472 million, pre-tax, net of retrocession and reinstatement premiums, which added 44.7 points on the combined ratio which reached 109.8 percent.
For the first nine months of the year, the company made a net profit of $145 million compared with $578 million in the same period of 2016.
The company also enjoyed steady growth in the third quarter. Its non-life net premiums increased by 7 percent compared with the same period of 2016, primarily as a result of new business written and reinstatement premiums, partially offset by cancellations and non-renewals.
In its life and health book, net premiums were up by 22 percent in the third quarter of 2017 compared to the same period of 2016, primarily driven by the inclusion of the Aurigen life premiums and growth in health business.
Emmanuel Clarke, chief executive of PartnerRe, said: “The third quarter of 2017 was a very active period of severe catastrophe events, with a series of hurricanes impacting the Caribbean and the US and two earthquakes in Mexico. Our first thoughts go to the victims of these catastrophes. PartnerRe is paying losses promptly and continue to provide coverage to our clients, demonstrating the value of our reinsurance product, which ultimately contributes to fund reconstruction efforts in devastated regions.
“Despite the impact of these losses on the catastrophe exposed lines in our portfolio, PartnerRe book value declined by only 0.9 percent during the quarter, thanks to discipline in deploying capital in Catastrophe exposed classes, solid performance in our Specialty portfolio, an improvement in our P&C non-CAT accident year technical ratio compared to the third quarter of 2016 and good investments performance. These results highlight our underwriting discipline and the quality and diversification of our underwriting portfolio. We are approaching the January 1 renewals season with a strong capital position which will allow us to benefit from improving pricing conditions in the market."
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