Global reinsurer PartnerRe Ltd has reported a net loss of US$120 million for the first quarter of 2018, compared to a net income of US$38 million in the same period last year.
According to a statement by the company, the loss includes net unrealised investment losses of approximately $222 million, mainly driven by an increase in risk-free rates, predominantly in the US. Around US$50 million of these losses was attributed to a widening of credit spreads in the US and Europe.
“We had solid underwriting profits this quarter in both our non-life and life & health segments with improved pricing margins, a 14% increase in net premium earned to last year’s first quarter and improved combined ratio across various lines of business,” commented Emmanuel Clarke, president and CEO of PartnerRe. “These results, alongside positive April 01 renewals, where we continued to see increases in business margins, position the company well to deliver improved underwriting results during the course of 2018. Interest rate increases recorded during Q1 are positive news for our business longer-term, yet their accounting impact translated into a net loss.”
The company’s non-life business saw its combined ratio improve to 94.7% for the first quarter of 2018, compared to 96.4% the previous year. The improvement was credited to both the specialty and P&C segments experiencing net favourable reserve development.
While P&C’s combined ratio worsened to 100.4% from 97.5% due to significant losses in North America and a higher acquisition cost ratio, it was offset by the specialty segment’s improvement to 86.9% from 95.2%.
Life and health net premiums written increased 28% in the first quarter of 2018, primarily driven by the acquisition of life reinsurer Aurigen. This brought in premiums of US$36 million, or 12% of the increase in net premiums written, in the first quarter of 2018. The segment’s allocated underwriting result improved to US$30 million, from US$8 million a year ago.
In the fourth quarter of 2017, PartnerRe posted another US$120 million in losses, mostly due to the massive wildfires in California and numerous other disasters worldwide throughout the year.
