But chief executive Miranthis hails ‘strong’ third-quarter performance
PartnerRe’s nine-month 2013 profit dropped 64% after the company was hit by investment losses.
Profit after tax at the top 10 reinsurer fell to $392.2m (£242.5m) in the first nine months of 2013 from $1bn in the same period last year after it suffered $219m of realised and unrealised investment losses.
By contrast, PartnerRe made $399.4m of investment gains in the first nine months of 2012.
The third-quarter results were also hit. Profit after tax fell 31% to $333.4m (Q3 2012: $486.7m) following $1.3m of investment losses. The company made investment gains of $221.8m in the third quarter of 2012.
Good underwriting performance
The poorer results come despite a solid underwriting performance at PartnerRe at both the nine-month and third-quarter stage.
For the first nine months of 2013, PartnerRe reported a combined ratio of 84.2%, an improvement of 0.9 percentage points on the 85.1% it reported in the same period of 2012.
In the third quarter alone, the combined ratio improved by 5.8 points to 74.9% from 80.7%. The third quarter combined ratio was given a boost by $238m of reserve releases, which offset the $55m PartnerRe expects to pay in claims from the hailstorms in Germany in July.
PartnerRe also expanded. Gross written premiums (GWP) in the first nine months of 2013 were $4.4bn, up 16% on the $3.8bn reported in the same period last year.
In the third quarter of 2013, GWP increased 21% to $1.3bn (Q3 2012: $1.1bn).
The third-quarter increase mainly related to new business in PartnerRe’s North American segment, as well as the inclusion of business from Presidio, the accident and health underwriting agency PartnerRe bought in December 2012.
PartnerRe chief executive Costas Miranthis said: “We had very strong third-quarter results reflecting a low level of large loss activity and strong core performance for most of our businesses, culminating in a 74.9% combined ratio and a 22.6% operating return on equity.
““We are encouraged by these strong results in the current economic reinsurance pricing environment.”
He added: “Against a backdrop of improved underlying primary pricing, reinsurance remains a competitive market.
“The market dynamics are similar to what we experienced in prior quarters, but our teams have demonstrated that we can leverage the strength of our worldwide franchise to identify attractive business opportunities in all lines, and particularly in diversifying lines, where we have had the most success.”