Rising interest rates cause PartnerRe loss
Newly released figures from PartnerRe show that the company lost more than $1.1 billion in the first half of the year.
According to the latest report, the net loss was driven by unrealised losses on fixed maturities of $591 million and $1,413 million for the second quarter and half year, respectively, owing to increasing interest rates.
As of June 30, reinvestment rates were on average 4.7 per cent compared with the firm’s fixed-income investment portfolio yield of 2.5 per cent for the second quarter.
But a spokesman said that PartnerRe continued to show strong progress on its operating results.
Operating income was $328 million for the second quarter and $502 million for the half year, which provided an operating income return on equity of 15.0 per cent through the first six months.
There was also a non-life underwriting profit of $282 million (combined ratio of 79.3 per cent and a 9.3 point improvement) for the second quarter and $481 million (combined ratio of 81.9 per cent and a 10.5 point improvement) for the half year
Life and health had an allocated underwriting profit of $60 million for the second quarter and $44 million for the half year.
The news comes after Covéa Coopérations S.A. completed the acquisition of PartnerRe Ltd from Exor Nederland N. V. last month.
PartnerRe president and chief executive officer Jacques Bonneau said: “With the completion of Covéa’s acquisition of PartnerRe in early July, we are excited to join a group with such an established history, strong brand and robust financial strength.
“As our financial results for the half year demonstrate, with an annualised operating return on equity of 15.0 per cent, an improvement in our non-life combined ratio of 10.5 points year over year, and our growing life operations and third-party capital management, we believe we can make an immediate contribution to the Covéa group.”
He was thankful for PartnerRe’s relationship with Exor, which he hoped to continue through their meaningful contribution to their third-party capital platform.
“We look forward to our future with Covéa and to further increasing the value that we provide to all of our clients, distribution partners, capital partners and other stakeholders,” he said.
PartnerRe reported net loss attributable to common shareholder of $606 million for the second quarter of this year compared with income of $314 million for the same period of 2021.
Net loss attributable to common shareholders was $1,146 million for the half year 2022 compared with income of $248 million for the same period in 2021.
Operating income was $328 million for the second quarter of 2022 compared with $151 million for the same period in 2021. Operating income for the half year 2022 was $502 million compared with operating income of $192 million for the same period in 2021.
Operating income for the second quarter and the half year 2022 improved over the same periods in 2021 as a result of improvements in the underwriting results for all three segments.