COVID-19 pandemic a test for re/insurance industry, says PartnerRe CEO Emmanuel Clarke
PartnerRe's chief executive Emmanuel Clarke says the company is "well-positioned" for the hardening of reinsurance pricing and to weather the COVID-19 storm as it expects to see a positive impact of the actions it took throughout 2019 to improve its profitability and portfolio performance.
The Bermuda-based reinsurer reported a net loss of $433 million for the first quarter of 2020, driven by $610 million of unrealised losses on investments. This compared to a net income of $497 million in the first quarter of 2019.
Gross premiums written for the quarter was $2.041 billion, compared with $2.117 billion in Q1 2019.
PartnerRe incurred $18 million of pre-tax losses from event cancellation claims associated with COVID-19 in the first quarter of 2020. It is exposed to COVID-19 related claims across its non-life and life & health segments.
The company is also exposed to investment risk and the first quarter results reflect $610 million of unrealized investment losses driven by the economic impacts of widening credit spreads and declines in equity markets.
PartnerRe posted a combined ratio of 103.8 percent in the non-life segment, 94.3 percent in property/casualty, and 121.1 percent in the specialty segment.
Clarke said: “The COVID-19 pandemic is a test for our industry and a reminder of the potential severity of systemic events, and the value of strong reinsurance partnerships. Our priorities in responding to the rapidly expanding COVID-19 pandemic through the first quarter have been the safety of our staff and the continuous, seamless servicing of all our business partners. I have been impressed by the speed and agility with which the PartnerRe organization worldwide has adapted to a full work from home mode, while maintaining highly responsive interaction with our business partners.”
Commenting on the first quarter performance, Clarke said: “In our first quarter, we delivered positive underwriting results in our P&C and Life & Health segments, which was offset by loss activity in our Specialty segment. I am confident that the actions we have taken throughout last year to improve our portfolio performance, combined with strong underlying rate increases in the loss affected classes, will start to show a positive impact. We continue to execute on our growth strategy for Life & Health to maintain a well-diversified and profitable book of business.”
He added: “With the strength of our balance sheet and our high quality investment portfolio, we have the resilience to weather this pandemic and changed economic cycle, and we are well-positioned for the hardening of reinsurance pricing.”
