PartnerRe Operating Profit Falls 6.7%
27 October 2015 - 8:40AM
Dow Jones News
PartnerRe Ltd. said third-quarter operating earnings fell 6.7%
as the reinsurer was hurt by lower premiums.
Operating earnings are a widely watched benchmark for the
insurance industry because they exclude realized capital gains and
losses from companies' investment portfolios, among other items
that aren't considered recurring on a quarterly basis.
PartnerRe is in the process of being acquired by Exor SpA of
Italy, which reached a $6.9 billion deal for the reinsurance group
in August, ending months of tense negotiations. Under the deal,
PartnerRe agreed to terminate its separate merger agreement with
Axis Capital Holdings Ltd. and pay Axis a $315 million termination
fee.
The deal between Exor and PartnerRe continues the consolidation
trend among reinsurers, which take on some or all of the risk of
policies sold by primary insurers to individuals and businesses.
Reinsurers have faced falling prices because of unusually low
catastrophe losses in recent quarters and competing money coming
from hedge funds, pension plans and other big investors.
However, in the latest three-month period, international
insurers such as PartnerRe were exposed to a wide range of costly
events, including explosions at China's Tianjin port. PartnerRe
recently estimated losses of $50 million to $70 million related to
the disaster.
Chief Executive David Zweiner said in prepared remarks Monday
that the results reflected factors including the deal termination
fee paid to Axis and continued difficult financial and investment
markets.
PartnerRe reported operating earnings of $211.6 million, or
$4.42 a share, down from $226.7 million, or $4.47 a share, a year
earlier.
Net premiums written decreased 11% to $1.19 billion. Excluding
currency impacts, the decline was 5%.
Analysts polled by Thomson Reuters expected per-share operating
profit of $2.55 and net premiums written of $1.33 billion.
The latest period included net realized and unrealized
investment losses of $133 million, while the year-earlier period
included net realized and unrealized investment losses of $34.4
million.
Overall, PartnerRe reported a loss of $229.1 million, or $5.08 a
share, compared with a year-earlier profit of $196.4 million, or
$3.60 a share, a year earlier. The latest period also included
$6.58 a share for the termination fee and reimbursed expenses to
Axis.
The combined ratio—a measure of premiums used to cover
claims—fell to 82.8% from 84.2%. The latest period reflected losses
of 5.4 percentage points related to the Tianjin explosion.
Write to Tess Stynes at tess.stynes@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 26, 2015 17:25 ET (21:25 GMT)
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