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PartnerRe swings back to $4mn non-life UW profit, despite $297mn in cat losses

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PartnerRe’s non-life business returned to underwriting profit in Q3, recording a $4mn gain that was an improvement from the $20mn loss a year earlier, as top line growth and premium adjustments helped to offset cat losses in the period.

The Bermudian reinsurer grew non-life net written premiums by 14% to $1.5bn, but reported $188mn losses attributed to Hurricane Ida and $60mn from floods that hit central Europe last summer.

PartnerRe’s P&C segment booked most of Ida’s losses ($172mn) while the specialty lines unit registered $16mn.

The carrier didn’t change its estimates from Winter Storm Uri, which hit Texas earlier this year, but said that large catastrophic losses, net of retrocession and reinstatement premiums, were $297 million for the third quarter of 2021.

Overall, the carrier posted an operating profit of $54mn for the third quarter of the year, rising from the $18mn operating profits a year earlier.

Growth: Net premiums at PartnerRe’s P&C business soared by 32% to $825mn in Q3, year-on-year.

The reinsurer reported that current year’s results included favorable premium adjustments from prior underwriting years, compared to the prior year which included adverse premium exposure adjustments related to the economic downturn. Specialty net premiums fell by 11%, to $407mn.

Underwriting: The P&C segment’s combined ratio remained almost unchanged at 105.9%. However, the firm said that the current accident year attritional loss ratio showed improvement as a result of portfolio reshaping in prior periods and better rates.

The carrier’s specialty lines’ combined ratio improved to 86.6% in Q3 from 96.1% the same quarter of 2020, driven by favorable prior years' reserve development of 7 points compared to 0.4 points the previous year.

Investment: Q3 net investment income at Partner Re climbed 1.5% to $102mn from $100mn a year earlier, propelled mostly by the performance of the company's US TIPs portfolio and the impact of re-allocations to investment grade corporate bonds.

Commentary: “Despite an active quarter for catastrophic activity, we delivered positive operating income during the third quarter of 2021, demonstrating the continued positive financial impacts of our portfolio optimization, especially on the current accident year attritional loss ratio,” said the company’s president and CEO, Jacques Bonneau.

“With a profitable underwriting result across all of our segments for the first nine months of 2021, and the strength of our capital and liquidity positions, we are well positioned for the renewal season,” he continued.

“As we look forward to 2022, our strong capital base along with over $1 billion in third party capital assets under management leaves us poised to remain a valuable, responsive reinsurance partner,” he added.

The reinsurer's parent company Exor announced late last month that it had agreed sell PartnerRe to French mutual insurer Covea for $9bn, under virtually identical terms as a deal scrapped last year.

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