PartnerRe Ltd. joined the growing list of companies, reporting sharp fourth quarter and full year net income decreases. The Bermuda-based reinsurer posted Q4 net income of $95.3 million, compared to the $180.6 million it earned in the same period of 2007. For the full year PartnerRe’s net income was $46.56 million, compared to $717.8 million in 2007, a 94 percent decline.
It’s becoming evident from the earnings reports that have been released so far that insurers and reinsurers have been heavily impacted by investment losses. While operating earnings, which excludes investment gains and losses, have remained fairly steady in relation to 2007, the investment losses have taken their toll.
PartnerRe is no exception. It posted a relatively benign $16.5 million loss on investments in the fourth quarter, but a whopping $531.36 million for the full year. The Company also reported declines in operating earnings, which fell to $53.9 million in the fourth quarter from $257.4 million in Q4 2007, while operating earnings for the full year were down over 40 percent to $469.3 million from $822.4 million.
President and CEO Patrick Thiele commented: “2008 was an extraordinary year on two fronts. The year was highlighted by the worst global financial crisis we have experienced in recent history and it was the third worst year in recorded history for natural catastrophes.
“Despite this, we delivered a 12 percent operating return on beginning equity for the year, maintained a strong balance sheet, and achieved a positive total return on our investment portfolio. More importantly, over a longer period, which we believe is a better measure of a company’s success, we exceeded our long term targets, with a 15 percent average operating return on beginning equity and 11 percent compounded GAAP book value per share growth over the last six years.
“We believe the results we have delivered over the past several years, as well as our continued strong capital position during this most recent period, clearly demonstrate the value and effectiveness of our integrated risk management framework. They also underscore our commitment to PartnerRe’s stakeholders: our clients in terms of providing secure capacity, and our shareholders in terms of continued value generation.”
Just how badly investment losses and loss events, primarily Hurricane Ike, impacted the Company is evident from the fact that for the full year PartnerRe posted a 6 percent gain in net premiums written to $3.99 billion from $3.75 billion in 2007.
The non-life combined ratio, however, rose to 102.2 percent in Q4 and to 94.1 percent for the full year, compared to 80.4 percent in 2007
The full report, additional information and details concerning the Company’s earnings conference call may be obtained on its web site at: www.partnerre.com.
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