PartnerRe enjoys life & health growth despite capacity woes

PartnerRe, the Bermudian reinsurer, has reported considerably improved results and solid growth in the second quarter of 2014, despite worries about excess market capacity.

Gross written premiums increased to $1.46 billion in the second quarter of 2014 compared with $1.34 billion in the same period of 2013, an increase of almost 9 percent. For the first six months of 2014, the firm’s gross written premiums increased by 7.7 percent to $3.34 billion.

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

However, its catastrophe reinsurance unit contracted by 9 percent in the quarter, possibly due to very competitive market conditions in the segment caused by the flow of excess capital into the space, as the company’s chief executive describes.

Partner Re’s profitability also improved distinctly compared with the previous year, generating a net profit of $257.7 million in the second quarter of 2014 compared with a net loss in the prior year quarter of $190.4 million.

The firm’s net income for the first six months of 2014 was $553.3 million compared with $20.2 million in the same period in 2013, and its combined ratio in Q2 2014 also improved to 91.5 percent compared with 97.8 percent a year earlier.

Costas Miranthis, chief executive of PartnerRe, says: “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 adds: “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.”