PartnerRe posts $520m full-year loss
PartnerRe Ltd announced yesterday that it made a net loss of $520 million last year as it suffered $1.79 billion in net catastrophe losses.
The Bermuda reinsurer revealed last night that it made a fourth-quarter net loss of $17.6 million, or 49 cents per share, to round off what CEO Costas Miranthis called “a challenging year”.
The $520.3 million net loss for 2011 amounted to $8.40 per share and compared to a profit of $852.6 million, or $10.46 per share, in 2010.
PartnerRe’s fourth-quarter operating loss of $137.7 million amounted to $2.06 per share and was narrower than the $2.09 per share expected by analysts polled by Bloomberg.
“The industry experienced a number of significant catastrophe events during the year, and as a leading global catastrophe reinsurer, we were impacted by these events,” Mr Miranthis said in a statement.
“While the 2011 catastrophic events resulted in a significant operating loss for PartnerRe, our strong capital base enabled us to withstand this series of catastrophe losses. With total capital in excess of $7 billion, we are well-positioned to benefit from opportunities as the reinsurance market improves.”
The company said it had seen a broad increase in rates during January 1 renewals.
“Chronic premium rate erosion appears to have been halted nearly everywhere, and risk-adjusted premium rates increased in several areas some significantly and some more modestly,” Mr Miranthis said. “In this environment, we are pleased with the outcome of the January renewal. We achieved a better balanced risk profile to optimise risk adjusted returns and we added a number of new client relationships.”
Despite the net loss, the Class of ‘93 reinsurer increased its common share dividend for the 19th consecutive year.
The non-life combined ratio was combined ratio was 121.7 percent, which included 12.4 points (or $120 million) of fourth-quarter catastrophe losses related to the Thailand floods, 21.6 points (or $210 million) of net losses on prior-quarter events, namely the Japanese earthquake and tsunami and the New Zealand earthquakes.
PartnerRe has included in the total $50 million gross of additional catastrophe reserves above the sum of current estimates for all 2011 catastrophes “given the uncertainty surrounding these complex and volatile events”.
The reinsurer’s book value per diluted share took a battering from the catastrophe losses, falling around 10 percent to $84.82 compared to $93.77 at the end of 2010, while total capital fell nine percent to $7.3 billion at December 31, 2011 from $8 billion 12 months earlier.
Total shareholders’ equity was $6.5 billion at the end of 2011 compared to $7.2 billion at December 31, 2010.
For the fourth quarter, net investment income was down four percent to $156 million primarily reflecting lower reinvestment rates, which was partially offset by the positive impact of foreign exchange of one percent. For the full year 2011, net investment income was down six percent to $629 million primarily due to lower reinvestment rates.
PartnerRe repurchased approximately 2.6 million common shares at a total cost of approximately $170 million. For the full year 2011, the company repurchased approximately 5.4 million common shares at a total cost of approximately $396 million. Approximately 5.3 million common shares now remain under the current repurchase authorisation.