PartnerRe crushes Wall Street expectations
Bermuda-based PartnerRe last night reported its earnings for the first three months of the year, posting a net income of $210.5 million, easily beating Wall Street estimates.
The company’s first-quarter profit of $3.39 a share on $1.76 billion of revenues far exceeded the estimates of the 18 analysts polled by Yahoo Finance who expected earnings of $2.36 a share on revenues of $1.54 billion.
The quarterly result compares to a net income of $344.7 million for the same period of 2012.
“We began 2013 with a very good first quarter result,” said PartnerRe president and CEO Costas Miranthis.
Mr Miranthis said the results were driven by growth in the company’s underlying portfolio and strong underwriting performance, which generated a combined ratio of 81.7 percent compared to a combined ratio of 84.7 during the first quarter of 2012.
“This, combined with modest gains in our investment portfolio resulted in book value growth of more than two percent for the quarter,” Mr Miranthis said.
The company’s book value was $102.96 per share at the end of the first quarter, compared to $100.84 per-share at year-end 2012.
The company wrote more business in the first three months of this year with net premiums up 11 percent over the first quarter of 2012. PartnerRe reported its net premiums written were $1,6 billion compared to $1.5 billion last year.
The company attributes the increase primarily to agricultural business in the North America sub-segment and, to a lesser extent, the increase in net premiums written was due to new business in the Global (Non-US) P&C sub-segment, and the inclusion of Presidio’s business in the Life and Health segment.
PartnerRe’s total capital was $7.7 billion at the end of the quarter, down modestly from the end of 2012.
Just two weeks ago, the company announced it planned to cut 140 jobs, or nearly 12 percent of its global staff, in a restructuring effort. Mr Miranthis said the move should put the company in a more competitive position moving forward.
“Reinsurance markets are evolving rapidly and present challenges. While underlying primary pricing continues to improve, reinsurance competition has intensified in recent months. As always our underwriting decisions over the coming months will be guided by careful evaluation of risks and returns.” Mr Miranthis added.
“The recently announced organisational changes position us to effectively and efficiently focus on markets that continue to provide opportunities to generate attractive returns.”
The company expects the restructuring effort to result in a pretax charge of $60 million to $70 million, primarily recorded in second-quarter results. No charges were recorded in the first quarter.
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