PartnerRe suffers millions of losses in Q1 2022

According to PartnerRe’s Q1 2022 report, the Bermuda-based business widened its loss from US$66 million in the same quarter last year. The US$539 million beating was largely due to unrealised losses of US$821 million on fixed maturities and short-term investments resulting from interest rate increases.

In terms of underwriting result, here’s how the reinsurance group fared in the three-month span:

Segment

Q1 2022 underwriting result

Q1 2021 underwriting result

Non-life

US$199 million

US$40 million

Life & health (L&H)

US$(34 million)

US$1 million

Operating income, meanwhile, grew from 2021’s US$42 million to US$174 million this time around. The result was attributed to the higher underwriting figures for non-life units property & casualty (P&C) and specialty. The latter’s underwriting result in the first quarter rose from US$22 million to US$34 million, while P&C saw its underwriting result surge from US$18 million to US$165 million.

As for L&H, the segment was hit by losses related to COVID-19 (US$9 million), as well as losses on the long-term protection business and impacts from less favourable equity market activity on the guaranteed minimum death benefits line of business.

In non-life, PartnerRe recorded US$86 million in large losses. The sum included US$50 million related to the ongoing conflict between Russia and Ukraine, and US$36 million related to the floods in Australia.

Commenting on the numbers, president and chief executive Jacques Bonneau said: “On the back of a successful January 01 renewal and benefitting from our disciplined focus on profitable growth, we had an improved underwriting result for the first quarter of 2022, which led to the strong improvement in operating income.

“We continued to grow our premium base where rates are attractive, particularly in casualty and professional lines. With an annualised operating return on equity of 9.9% and an improvement in our non-life combined ratio of 12 points year-over-year, it is clear that our continuous focus on underwriting profitability provides PartnerRe the stability that our clients, capital partners, and shareholders expect, despite a challenging macroeconomic and geopolitical backdrop.”

The CEO added: “The industry continues to be impacted by increases in interest rates. While mark-to-market investment losses on fixed maturities, which we include in net income, were the sole driver of our net loss for the quarter, management’s approach of holding most of our fixed maturity investments to their maturity means that changes in interest rates do not immediately put our capital at risk.”

As of March 31, PartnerRe’s total capital stood at US$8.7 billion.