Profits tumble at PartnerRe but CEO highlights positives
Profits plummeted at PartnerRe in the first quarter of the year as it blamed a number of factors including changes to the Ogden discount rate in the UK, a decline in favorable prior year reserve development and lower profitability in its health line of business.
The company made a profit of $38 million in the first quarter, a fall of 82 percent on the $201 million that it reported over the same period of 2016. PartnerRe said that it had been hit by a combination of factors that had impacted its bottom line results.
“Our annualised adjusted operating ROE of 3.4 percent in the first quarter of 2017 reflects prudent underwriting, de-risked investment portfolio, the impact of the change in the Ogden discount rate in the UK, a decline in favorable prior year reserve development and lower profitability in our health line of business,” said PartnerRe president and CEO Emmanuel Clarke.
“We reported a non-life combined ratio of 96.4 percent and an improved accident year combined ratio compared to the first quarter of 2016 driven by a lower level of mid-sized loss activity in P&C and reduced operating expenses.”
Gross premiums written over the period came to $1.5 billion a fall from the $1.63 billion it wrote over the same period of the previous year.
PartnerRe said that non-life net premiums written were down 14 percent in the first quarter of 2017 compared to the same period of 2016, primarily as a result of cancellations and non-renewals, the timing of renewal of a significant agricultural contract and higher premiums ceded.
In addition, the non-life combined ratio of 96.4 percent was 2.1 points higher than the ratio reported in the first quarter of 2016, primarily due to lower favorable prior years' reserve development, partially offset by lower other operating expenses, acquisition costs and mid-sized loss activity. The prior years' reserve development was impacted by a $35 million charge related to the change in the Ogden discount rate in the UK.
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