Partner Re‘s first quarter results have been hit by a net loss of $807m which was “significantly in excess” of expectations.
The Bermuda-based reinsurer recorded an operating loss of $735.6m for the first quarter of 2011. This compares to an operating loss of $50.4m for the first quarter of 2010.
PartnerRe president & CEO Costas Miranthis said, "During the first quarter, we witnessed an exceptional frequency of catastrophic events in international markets. As PartnerRe underwrites a globally diversified portfolio, the losses in Japan, New Zealand and Australia together led to catastrophe losses significantly in excess of our quarterly expectations.”
Despite the heavy net losses, Miranthis said: “The strength of our balance sheet has enabled us to absorb these losses and maintain a strong capital position."
The reinsurers total direct losses related to the 2011 catastrophic events are estimated to be $1.07bn million pre-tax, net of reinstatements, reinsurance and commission adjustments.
The non-life combined ratio was 193.7% and included 115.8 percentage points related to catastrophe events during the quarter, including the Japan earthquake and resulting tsunami, the New Zealand earthquake, and the Australian cyclone and flood events.
The company defended an 18% drop in net premiums written to $1.5 billion primarily because it had decided to cancel and non-renew business in order to reposition its portfolios following the integration of Paris Re.
Partner Re added the drop in net written premiums reflects a continued competitive pricing environment in most lines.
Miranthis added that while the pricing reaction in loss affected areas is predictable, the broader re-evaluation of catastrophe risk is beginning to change the pricing dynamics in all property catastrophe markets.
“While clearly we are at an early stage in this process, the initial indications we've received are encouraging. For longer tail lines, we do not have the same pricing momentum, but we have seen a bottoming out in rate levels and encouraging signs that opportunities will arise as economies begin their recovery," Miranthis said.