PartnerRe, 2Q2020: Net income stood at USD 229 million despite pandemic challenges

29 July 2020 — press.release
For the second quarter of 2020, PartnerRe reported a net income available to common shareholder of USD 229 million, 19.6% lower year-on-year. This figure includes net realized and unrealized investment gains of USD 238 million on fixed maturities and short-term investments, primarily due to decreases in worldwide credit spreads, and USD 35 million of net foreign exchange losses.


PartnerRe 2Q2020 preliminary figures, y-o-y changes


  • Gross written premiums: USD 1,558 million (-18.4%)
    • GWP P&C: USD 769 million (-13.0%)
    • GWP Specialty: USD 413 million (-34.4%)
    • GWP Life & Health: USD 376 million (-4.8%)
  • Total revenue: USD 2,207 million (+9.6%)
  • Losses and loss expenses: USD 1,500 million (+23.7%)
  • Total expenses: USD 1,957 million (+14.9%)
  • Combined radio: 121.3% (+28.5 pp.)
  • Underwriting result: USD -324 million (2Q2019: USD 45 million)
  • Net income: USD 229 million (-19.6%)


Non-life

Non-life net premiums written were down 30% for the second quarter of 2020, reflecting premium exposure adjustments resulting from the current economic downturn and the Company's focus on portfolio optimization throughout 2020. The Non-life underwriting loss was USD 260 million (2Q2019: profit of USD 95 million) and the combined ratio 121.3% (2Q2019: 92.8%), driven by COVID-19 related losses.

In the second quarter of 2020, the Specialty segment reported an underwriting loss of USD 161 million and a combined ratio of 132.8%, driven by COVID-19 related losses, net of retrocession and reinstatement premiums. The P&C segment reported an underwriting loss of USD 99 million and a combined ratio of 113.5%, driven by COVID-19 related losses, net of retrocession and reinstatement premiums.


Life and Health

Net premiums written were down 5% for the second quarter of 2020, compared to the same period of 2019. Allocated underwriting result was a profit of USD 5 million, compared to USD 14 million for the second quarter of 2019, driven by COVID-19 related losses and adverse experience in the Company's short term life business, partially offset by a favorable impact in the guaranteed minimum death benefits (GMDB) line of business following increases in equity markets.


Investments

Net investment return in the second quarter of 2020 was a gain of USD 627 million (2Q2019: USD 317 million), or 3.5% (2Q2019: 1.8%), and included net investment income of USD 72 million (2Q2019: USD 121 million), net realized and unrealized investment gains of USD 549 million (2Q2019: USD 182 million), and interest in earnings of equity method investments of USD 6 million (2Q2019: USD 14 million).

Net investment return for the half year 2020 was USD 124 million (2Q2019: USD 917 million), or 0.7% (2Q2019: 5.3%), which included net investment income of USD 175 million (2Q2019: USD 231 million) and interest in earnings of equity method investments of USD 2 million (2Q2019: USD 35 million), partially offset by net realized and unrealized investment losses of USD 53 million (2Q2019: USD 231 million).

Net investment income was down USD 49 million for the second quarter of 2020, primarily due to the sales of higher yielding bank loan investments and the impact of lower reinvestment rates.


Regarding these results, the company mentioned:

"The COVID-19 pandemic is unprecedented and the related economic downturn is ongoing. There continues to be significant uncertainty surrounding the full extent of the impact. Despite the recent market conditions, the Company's solvency position has remained strong and showed an improvement during the second quarter of 2020. The Company also maintains ample liquidity, with cash and cash equivalents of USD 1.4 billion at the end of the second quarter of 2020."



More financial information about PartnerRe can be found at partnerre.com


Source: partnerre.com

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