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PartnerRe reports Q3 net loss of US$229 million, 1.4-point improvement in combined ratio


October 27, 2015   by Canadian Underwriter


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PartnerRe Ltd. released Monday its financial results for the three months ending Sept. 30, reporting a 1.4-point improvement in its Q3 combined ratio and a 7% drop, on a constant foreign exchange basis, in net premiums written in non-life.

Pembroke, Bermuda-based PartnerRe writes reinsurance and specialty commercial primary insurance worldwide. It has a Toronto branch office.

Insurance carrier PartnerRe Ltd. reported $1.268 billion in non-life premiums in Q3 2015

PartnerRe reported gross written premiums, in non-life, of $1.268 billion during the three months ending Sept. 30, down 6.8% from $1.361 billion during the same period in 2014. All figures are in United States dollars.

Its underwriting result, in non-life, was $190 million in Q3 2015, down from $192 million in Q3 2014.

The combined ratio was 82.8% in Q3, down 1.4 points from 84.2% in Q3 2014.

“The combined ratio benefited from favorable prior year development of 22.2 points (or $246 million) and included 5.4 points (or $60 million) of large losses related to the Tianjin explosion,” Partner Re stated in a release, referring to an incident Aug. 12 when a warehouse containing sodium cyanide exploded at a port in China, killing more than 170 and damaging property.

PartnerRe was ranked ninth, by A.M. Best Company Inc., on a list of the top 50 global reinsurance groups. In its segment review on global reinsurance released Sept. 2, Oldwick, N.J.-based A.M. Best ranked the reinsurance groups by gross reinsurance premiums written, in life and non-life, in 2014.

PartnerRe said its total revenue in Q3 was $1.4 billion, up from $1.361 billion in Q3 2014). The carrier reported a net loss of $229 million in the latest quarter, compared to net income of $201.3 million in Q3 2014.

For the three months ending Sept. 30, PartnerRe reported gross written premiums, in non-life, of $954 million, down 6.9% from $1.025 billion in Q3 2014.

“For the third quarter, the Non-life segment’s net premiums written were down 12%,” PartnerRe stated. “On a constant foreign exchange basis, net premiums written were down 7%. For the first nine months of 2015, the Non-life segment’s net premiums written were down 10%. On a constant foreign exchange basis, net premiums written were down 4%.”

For North America, PartnerRe reported non-life gross written premiums of $351 million in Q3, compared to $372 million in the same period in 2014. In global non-U.S. P&C, gross written premiums were $153 million in the most recent quarter, down from $162 million in Q3 2014. Gross written premiums in global specialty were $393 million in Q3 2015 (compared to $432 million in Q3 2014) while gross written premiums in catastrophe were $57 million in the latest quarter (down from $59 million in Q3 2014).

Insurance carrier PartnerRe Ltd. reported global specialty premiums of $393 million in Q3 2015

“For the third quarter, the Global Specialty sub-segment’s net premiums written were down 9%,” PartnerRe stated. “On a constant foreign exchange basis, net premiums written were down 2% primarily due to downward premium adjustments in multiple lines of business and the impact of cancellations in prior periods across multiple lines of business. These decreases in net premiums written were partially offset by new business written in prior periods across multiple lines of business.”

PartnerRe shareholders are scheduled to vote Nov. 19 on a proposed US$6.9 billion acquisition by EXOR S.p.A.

EXOR originally offered this past April to buy PartnerRe, two months after PartnerRe’s board of directors recommended a merger with Axis Capital Holdings Ltd. Like PartnerRe, Axis is also based in Pembroke, Bermuda, writes reinsurance and commercial primary insurance worldwide and has a branch office in Toronto. Had the merger been approved, it would have created a global top 5 reinsurer, Axis said last January.

EXOR, a Turin, Italy-based investment firm controlled by the Agnelli family, is the controlling shareholder of Fiat Chrysler Automobile and CNH Industrial N.V. a manufacturer of power trains as well as heavy equipment under the Case and New Holland brands.

As recently as July, PartnerRe’s board was recommending shareholders approve the merger with Axis rather than an acquisition by EXOR. However, after EXOR improved its offer several times, PartnerRe announced Aug. 3 it had reached a definitive agreement to be bought by EXOR and terminated the merger agreement with Axis.

PartnerRe’s financial results for Q3 include “the amalgamation termination fee and reimbursement of expenses paid to Axis Capital of $315.0 million,” PartnerRe said Oct. 26.

For the nine months ending Sept. 30, PartnerRe reported gross written premiums of $4.449 billion, down 5.2% from $4.695 billion in Q3 2014. The combined ratio for the first nine months of this year was 85.3%, up 0.7 points from 84.6% during the first nine months of 2014.

PartnerRe’s principal offices are in Hamilton, Bermuda, Dublin, Greenwich, Conn., Paris and Zurich.

Last January, when PartnerRe announced the proposal to merge with Axis, Costas Miranthis stepped down as chief executive officer of PartnerRe and was replaced on an interim basis by David Zwiener, former chairman of the audit committee of PartnerRe’s board of directors.

Although it ranked ninth on A.M. Best’s list of global reinsurance groups, it ranks 10th when ranked by non-life reinsurance premiums in 2014, behind Munich Re, Swiss Re, Berkshire Hathaway, Hannover Re, SCOR, the Lloyd’s market, Everest Re, China Reinsurance Corp. and Korean Reinsurance Company.