Life & health growth boosts PartnerRe in tough market

Bermudian reinsurer PartnerRe has posted substantially improved results including solid growth in the second quarter of 2014, despite warning on the challenges created by excess capacity in the market.

The company’s gross written premiums increased to $1.46 billion in the second quarter of 2014 compared with $1.34 billion in the second quarter of 2013, an increase of almost 9 percent. For the first six months of this year, its gross written premiums increased by 7.7 percent to $3.34 billion.

The majority of its growth was generated on the life & health side. The net premiums written by this unit in the second quarter increased by 34 percent largely driven by its accident and health line of business.

Its catastrophe reinsurance unit shrank by 9 percent in the period, possibly because of what the company’s chief executive described as very competitive conditions in this segment caused by excess capital flowing into the market.

The company’s profitability also improved markedly compared with the year before. It made a net profit of $257.7 million in the second quarter of 2014 compared with a net loss in the second quarter of 2013 of $190.4 million.

Its net income for the first six months of 2014 was $553.3 million compared with $20.2 million in the same period a year earlier.

Its combined ratio in the second quarter of 2014 also improved to 91.5 percent compared with 97.8 percent a year earlier.

Costas Miranthis, chief executive of PartnerRe, said: “We had a good second quarter, on the back of the strong results we posted in the first quarter. Our seasonal earnings pattern for catastrophe premium resulted in lower cat premiums earned during the second quarter.

“In addition, we experienced a higher than average number of mid-sized individual non-catastrophe losses, an area where we expect some quarterly volatility. We are pleased however that the underlying loss ratio on attritional losses continues to be healthy. We also had very strong investment performance during the quarter. All together, this culminated in us growing our dividend-adjusted tangible book value per share by 10.8 percent for the first six months of 2014.”

Miranthis added: “Market conditions remain very competitive and excess reinsurance capacity is putting pressure on premium rates as well as on terms and conditions. While this is a difficult market, I am confident that our experienced teams coupled with the strength of our franchise will enable us to tackle the challenges ahead.”