Failed merger with Axis causes dip in Q3 profits for PartnerRe

Bermuda-based PartnerRe has reported a net loss of $243.3 million for the third quarter of 2015, mainly due to a $315 million termination fee and reimbursement of expenses it paid to Axis Capital after breaking off the proposed merger between the two firms.

This loss also included net after-tax realised and unrealised losses on investments of $121.8 million. It compares with a profit of $182.2 million in the third quarter of last year.

Gross written premiums (GWP) for Q3 2015 were also down to $1.27 billion, compared with $1.36 billion in Q3 2014.

The company’s non-life combined ratio was 82.8 percent in the quarter benefitting from favourable prior year development of 22.2 points or $246 million.

“Our results this quarter reflect a number of factors, most notably the amalgamation termination fee paid to Axis Capital, and continued difficult financial and investment markets, both of which had a negative impact on our book value,” said David Zwiener, PartnerRe interim chief executive officer.

“Despite the noise, and the impact of the Chinese Tianjin loss in August, our underlying results remain strong.”

Emmanuel Clarke, president, PartnerRe, added: “As we look ahead to the important January renewal season, which accounts for more than 60 percent of our non-life treaty premium, reinsurance markets remain competitive across the board.

“In addition, mergers and acquisition activity is continuing to be a distraction for some market participants. At PartnerRe, however, we continue to distinguish ourselves with our clients as a stable and focused partner with long-term financial flexibility, and a proven track record of reliability.”