French insurance group Covea reported a significant increase in profits for 2023, bolstered by the performance of its recently acquired reinsurer, PartnerRe, and offsetting the losses from its UK affiliate’s reserve development.
The group’s net income surged to €1.48 billion ($1.57 billion) from €896 million in the previous year, with earned premiums climbing 17.9% to €26.8 billion. The group’s combined ratio also improved, moving from 98.2 to 97.3.
Thierry Derez, Covea’s CEO, noted in a statement that the group fully implemented its strategy in 2023, achieving strong results in France despite facing higher repair costs and claims related to social unrest and climate-related events.
“Our reinsurance business, through PartnerRe, helped make Covea more robust in both financial and technical terms,” Derez said in an AM Best report.
Reinsurance operations saw a notable increase, with earned premiums jumping 69.3% in 2023 due to the full-year integration of PartnerRe, contributing €8.43 billion to the group.
PartnerRe turned a profit in 2023, with net income attributable to common shareholders at $2.31 billion, a stark contrast to a net loss of $949.5 million in the previous year, boosted by strong underwriting gains, investment income, and a one-time benefit from a Bermuda tax law change.
Meanwhile, earned premiums in the international segment decreased by 33.8% following the sale of the group’s subsidiaries in Italy in July 2022. In the UK, Covea Insurance plc reported a net loss of £87.3 million ($108.5 million), an improvement from the £145.6 million loss recorded the previous year.
Gross written premiums in the UK also dropped to £711.3 million from £855.0 million, with non-core businesses seeing a significant reduction in gross premiums written from £223 million to £105 million.
Covea UK has been actively restructuring, exiting unprofitable schemes and focusing on an intermediated strategy around core products. Amid high inflation and market uncertainty, the UK branch strengthened its reserving position for 2022 and earlier years, impacting the 2023 results negatively.
Additionally, it secured a loss portfolio transfer reinsurance agreement to guard against significant deterioration in claims reserves from 2022 and prior.
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