Canadian Underwriter

Non-life premiums down 4% at PartnerRe

October 28, 2016   by Canadian Underwriter

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PartnerRe Ltd., which writes commercial insurance and reinsurance worldwide, reported this week a 4% drop in Q3 non-life premiums while the combined ratio was essentially unchanged at 82.7%

PartnerRe, which is based in Pembroke, Bermuda and has a Toronto office, reported net premiums written, in non-life, were $860 million during the three months ending Sept. 30, 2016, down 4% from $892 million during the same three months of 2015. All figures are in United States dollars.

PartnerRe breaks down its non-life by specialty and property & casualty.

The 4% drop “was driven” buy P&C, PartnerRe stated, adding the P&C segment “reported decreases due to cancellations and non-renewals across all lines of business, higher premiums ceded under retrocessional contracts in the catastrophe line of business and the impact of foreign exchange. These decreases were partially offset by new business across all lines of business.”

Of Q3 2016 non-life net premiums written, PartnerRe reported $439 million were from P&C (compared to $481 million in Q3 2015) and $421 million in specialty (up from $411 million in Q3 2015).

PartnerRe reported its combined ratio was 82.7% in Q3 2016, down 0.1 points from was 82.8% in the same quarter of 2015.

“The Non-Life combined ratio continued to benefit from strong favorable prior year development of 16.7 points (or $173 million) with both Non-Life segments experiencing net favorable development from prior accident years as actual reported losses from cedants were below expectations,” PartnerRe reported. “The combined ratio for the third quarter of 2015 included favorable prior year development of 22.2 points (or $246 million) and 5.4 points (or $60 million) of large losses related to the Tianjin explosion.”

Loss ratios in the latest quarter were 45.5% in the P&C segment (down from 47.4% in Q3 2015) and 61.2% in the specialty segment (up from 53.8% in Q3 2015). Total net premiums written at PartnerRe, including life and health, were $1.31 billion in the most recent quarter, compared to $1.19 billion in Q3 2015.

PartnerRe reported an underwriting result of negative $50 million in non life in Q3 2016, compared to an underwriting results of $190 million in Q3 2015. Net investment income was $179 million in the latest quarter, compared to $190 million in Q3 2015.

For the nine months ending Sept. 30, 2016, net premiums written – in both life and non-life – were $3.866 billion.

PartnerRe is owned by Turin, Italy-based EXOR S.p.A., which completed the acquisition in March, 2016. Before, it was publicly traded. Shareholders approved the $6.9-billion deal in November, 2015.

Originally, PartnerRe was going to merge with Axis Capital Holdings Ltd., which is also based in Pembroke, Bermuda. Both firms announced Jan. 25, 2015 that their boards were recommending a merger. Had it been completed, a combined firm would have formed a global top 5 reinsurer, Axis said at the time. However, EXOR announced in April, 2015 its offer to acquired PartnerRe.

“Although the Axis Capital deal originally was accepted by PartnerRe management, Exor SpA made several increasingly lucrative hostile offers eclipsing the monetary value of the Axis Capital offer,” wrote A.M. Best Company Inc. in a report – titled Return of the Mega Deal During First Half of 2015 – released in September, 2015. “The final offer from Exor was ultimately accepted after a proxy advisory company recommended shareholders vote in favor of the Exor offer.”