PartnerRe Reports Q4 & Full Year 2018 Results
Bermuda-based PartnerRe Ltd. reported a net loss attributable to common shareholder of $32 million for the fourth quarter which was largely driven by losses related to Hurricane Michael and California wildfires of $282 million, partially offset by net realized and unrealized investment gains on fixed maturities and short-term investments of $31 million and net foreign exchange gains of $66 million.
This compared to net income of $72 million for the fourth quarter of 2017, which included losses related to California wildfires of $120 million, net realized and unrealized investment gains on fixed maturities and short-term investments of $13 million and net foreign exchange losses of $1 million.
Net loss attributable to common shareholder was $132 million for 2018 which was driven by losses related to Typhoons Jebi and Trami, Hurricanes Florence and Michael, and California wildfires of $386 million and net realized and unrealized investment losses on fixed maturities and short-term investments of $376 million, partially offset by net foreign exchange gains of $119 million.
This compared to net income of $218 million for 2017, which included losses related to Hurricanes Harvey, Irma and Maria and California wildfires of $569 million, net realized and unrealized investment gains on fixed maturities and short-term investments of $153 million and net foreign exchange losses of $108 million.
The net realized and unrealized investment gains on fixed maturities and short-term investments for the fourth quarter of 2018 included net unrealized gains of $207 million, which were largely offset by net realized losses of $176 million, primarily due to changes in the investment portfolio mix aimed at increasing yield and decreasing duration. The net realized and unrealized investment losses on fixed maturities and short-term investments for the full year 2018 included net unrealized losses of $151 million, driven by increases in U.S. risk-free rates and the widening of U.S. and European investment grade corporate spreads, and net realized losses of $225 million, primarily due to changes in the investment portfolio mix. The Company’s fixed maturities and short-term investments are accounted for at fair value with changes in the fair value recorded in the Consolidated Statements of Operations.
Commenting on results, PartnerRe President and Chief Executive Officer Emmanuel Clarke said, “The third and fourth quarters of 2018 were active periods of catastrophic loss events which impacted the Company’s Non-life combined ratio.
“In the face of another year of above normal insured catastrophic loss activity for the industry, PartnerRe was able to deliver once again a profit, excluding the volatility of our investment grade fixed income portfolio and the foreign exchange impact, thanks to our diversified and profitable book of business and our gross-to-net strategy.”
Mr. Clarke also added: “We are seeing increasing opportunities to deploy our capital at our target return across our portfolio and the 2019 year has started on a positive note, with strong execution at the January renewals where we reported double-digit year-on-year growth in Non-Life premium production with improved margins across several classes and geographies.
“With further improvement in margins expected throughout the year, I am confident that we will continue to build on these achievements, alongside our expected continued growth in Life and Health and improved income generation in our Investments portfolio, to deliver solid returns to our shareholder in 2019.”
