Bermuda-based PartnerRe Ltd. reported net income of $79.7 million, or $0.85 per share on a fully diluted basis for the first quarter of 2010; the figure includes net after-tax realized and unrealized gains on investments of $110.6 million, or $1.33 per share. Net income for the first quarter of 2009 was $141.5 million, or $2.32 per share on a fully diluted basis.
However, the reinsurer posted an operating loss, which excludes capital gains/losses, of $41.8 million, or $0.50 per share on a fully diluted basis, for the first quarter of 2010, compared to operating earnings of $155.7 million, or $2.72 per share, for the first quarter of 2009.
President and CEO Patrick Thiele commented: “As a global, diversified reinsurer, we assume volatility that our insurance company clients don’t want and, consequently, we expect to occasionally show that volatility in our own quarterly financial results. This quarter was an example of that with approximately $334 million in catastrophes causing a small operating loss.
“Nevertheless, we reported positive net income, as our capital markets risks more than offset those losses, and GAAP book value per share was essentially flat with year-end 2009.”
He also indicated that the Company is “progressing well with the integration of PARIS RE into PartnerRe, and expects to meet its goal of “operating as one entity at the July 1, 2010 renewals. There have been no surprises in the business or the balance sheet we purchased and we remain pleased with this acquisition and the business and talent it has added to PartnerRe,” he added.
In addition PartnerRe’s statement noted that, “net premiums written for the first quarter of 2010 were $1.8 billion, compared to $1.3 billion in the first quarter of 2009. Total revenues for the first quarter of 2010 were $1.5 billion, compared to $1.0 billion in the first quarter of 2009, and included $1.2 billion of net premiums earned, up 33 percent from the first quarter of 2009; net investment income of $173.1 million, up 30 percent when compared to $133.1 million in the first quarter of 2009; pre-tax net realized and unrealized investment gains of $145.5 million as compared to pre-tax net realized and unrealized investment losses of $70.1 million and a pre-tax gain of $88.4 million from the purchase of the CENts in the first quarter of 2009. Net premiums written, net premiums earned and net investment income were all positively impacted by foreign exchange, amounting to increases of 6 percent, 6 percent and 3 percent, respectively.”
The first quarter’s natural catastrophes nonetheless had an effect. In PartnerRe’s non-life sector the combined ratio for the first quarter of 2010 was 116.9 percent, compared to 87.0 percent for the first quarter 2009.”
The bulletin noted that “this year’s first quarter was impacted by significant catastrophes, totaling $329 million or 33 points on the Non-life technical ratio, primarily in the Global (Non-U.S.) P&C, Global (Non-U.S.) Specialty, Catastrophe and PARIS RE sub-segments. The Non-life technical result was a loss of $89 million for the first quarter of 2010, compared to a gain of $147 million for the prior year period.”
Commenting on the future, Thiele stated: “The current reinsurance market remains stable, and looking forward we see no significant changes in either pricing or loss trends in most of our markets with the exception of South American earthquake exposures where pricing is responding to the losses. In this environment, we will continue to optimize our larger, more diversified book of business, with the combined book priced at a low double digit return on deployed underwriting capital.”
The full report, including the first quarter 2010 financial supplement, is available on the Company’s web site at: www.partnerre.com in the Investor Relations section on the Financial Reports page under Supplementary Financial Data.