PartnerRe takes $539m net loss but underwriting improves
PartnerRe Ltd today reported a net loss attributable to common shareholders of $539 million for the first quarter of 2022, compared with a net loss of $66 million for the same period last year.
PartnerRe said the insurance industry continued to be impacted by increases in interest rates.
According to the company, market-to-market investment losses on fixed maturities which were included in net income were the sole driver for their net loss for the quarter.
But a company spokesman said: “Management’s approach of holding most of their fixed-maturity investments to their maturity means that changes in interest rates do not immediately put our capital at risk.”
Operating income was $174 million for the first quarter of 2022, compared with $42 million for the same period of 2021. Operating income for the first quarter of 2022 improved over the same period of 2021 as a result of improvements in the underwriting results for both non-life segments.
“On the back of a successful January 1 renewal and benefiting from our disciplined focus on profitable growth, we had an improved underwriting result for the first quarter of 2022, which led to the strong improvement in operating income,” PartnerRe president and chief executive officer Jacques Bonneau said.
Mr Bonneau said they continue to grow their premium base where rates are attractive, particularly in casualty and professional lines.
“With an annualised operating return on equity of 9.9 per cent and an improvement in our non-life combined ratio of 12 points year-over-year, it is clear that our continuous focus on underwriting profitability provides PartnerRe the stability that our clients, capital partners and shareholder expect, despite a challenging macroeconomic and geopolitical backdrop,” he said.
▪ Operating income improved by $132 million to $174 million for an annualised operating return on equity of 9.9 per cent, an increase of 7.4 points compared with the first quarter of 2021.
▪ Net loss attributable to common shareholder of $539 million, driven by unrealised losses of $821 million on fixed maturities and short-term investments resulting from increases in interest rates
▪ Non-life saw a 12.0 point improvement year over year, with a combined ratio of 84.7 per cent and an underwriting profit of $199 million
▪ Cash provided by operating activities for the first quarter was $383 million, an increase of 3.8 per cent compared to the first quarter of 2021
▪ Strong solvency position at December 31, 2021 with a Bermuda Solvency Capital Requirement ratio of 301 per cent for the group