Bermuda-based PartnerRe Ltd. today announced that the Company expects to record a net after-tax charge of approximately $63 million related to losses within its North American Agriculture portfolio primarily the result of the severe drought conditions in the U.S. during 2012.
This net charge, which equates to a pre-tax charge of $85 million, includes premiums, losses, commissions, brokerage and fees related to all agriculture business written in the Company’s North American sub-segment, and also reverses any prior profit recognition during the year.
The net loss is driven primarily by the result of the Company’s US proportional and non-proportional MPCI portfolio. The Company expects full year 2012 underwriting year premiums for this portfolio to be approximately $200 million with losses of $255 million. The Company also expects to record no net profit or loss during the fourth quarter related to this portfolio, assuming current ultimate loss estimates remain unchanged.
The Company noted that loss estimates are subject to uncertainty as crop yields are not finalized given the harvest is not yet completed. Estimates are further uncertain given commodity prices that will be used for calculating loss of revenue products will be established in the future and may differ from current estimates.
The Company also said that there were no other individual loss events that occurred during the third quarter which were in excess of $35 million and, in the aggregate, other large loss experience was below average expectations.
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