PartnerRe Ltd. Reports Fourth Quarter and Full Year 2017 Results

February 21, 2018

  •  Q4 2017 Net income available to common shareholder of $72m and FY 2017 of $218m, driven by strong results in the Specialty segment and Investment portfolio
  • FY 2017 Non-life combined ratio of 99.3% (Q4 2017 combined ratio of 100.7%), impacted by 15.4 points on the combined ratio for Hurricanes Harvey, Irma and Maria and California wildfire losses ($569 million in aggregate). FY 2017 Specialty combined ratio of 85.7% (92.5% in Q4 2017)
  • FY 2017 total net investment return of $720 million, or 4.2%, driven by strong performance in corporate credit, public and private equity and real estate

PEMBROKE, Bermuda, February 21, 2018 – PartnerRe Ltd. (“the Company”) today reported a net income available to common shareholder of $72 million for the fourth quarter of 2017 compared to a net loss of $191 million for the same period of 2016. Net income available to common shareholder was $218 million for the full year 2017 compared to $387 million for 2016.

Operating losses were $28 million for the fourth quarter of 2017 compared to operating earnings of $125 million for the same period of 2016. Operating losses for the full year 2017 were $1 million compared to gains of $289 million for the full year 2016. Operating losses for the fourth quarter of 2017 and the full year were driven primarily by large catastrophic losses.

Operating earnings or losses is a non-GAAP financial measure calculated with net income or loss available to common shareholder and excludes certain after-tax net realized and unrealized investment gains and losses, foreign exchange gains and losses, certain interest in results of equity method investments, income tax expense related to the enactment of the Tax Cuts and Jobs Act (TCJA) in the U.S., and loss on redemption of preferred shares.

Net income (loss) available to common shareholder, operating (losses) earnings  and the associated annualized return on average common shareholder’s equity (ROE), for the fourth quarters and the full years 2017 and 2016 include certain non-recurring costs, which impact period over period comparability as follows (in US$ millions, except for percentages):

Non-GAAP measures adjusted for certain non-recurring costs, net of tax(¹):Q4 2017Q4 201620172016
Net income (loss) available to common shareholder$85$(161)$250$517
Annualized net income (loss) available to common shareholder ROE5.6%(10.5)%4.2%8.6%
Operating (losses) earnings$(20)$151$26$413
Annualized Operating ROE(1.3)%9.8%0.4%6.9%

(1)    See page 20 for details.

On October 5, 2017, the Company forecasted at the Exor Investor Day an Adjusted Net Income for 2017 in the $220-300 million range, assuming an absence of material catastrophe and other large losses in the fourth quarter of 2017 and nil mark-to-market in the Standard Fixed Income portfolio. The reported adjusted net income of $250 million is within the forecasted range, notwithstanding $120 million losses related to the California wildfires in the fourth quarter of 2017.

Commenting on results, PartnerRe President and Chief Executive Officer Emmanuel Clarke said, “In 2017, in the face of industry insured losses in excess of $100 billion, we delivered solid financial results with adjusted net income of $250 million and an adjusted ROE of 4.2%. This remarkable performance demonstrates the value of our underwriting discipline, our portfolio construction with highly diversified and profitable business segments and our gross-to-net strategy. Together these have enabled us to deliver positive returns to our shareholders in a year marked by high frequency of severe catastrophes.”

Mr. Clarke also added: “We have started 2018 on a very positive note, with strong execution at the January renewals where we benefited from pricing improvements across a broad span of our portfolio with a double-digit rate increase in North America Property Cat rates along with improving profit margins in most of our Specialty lines and other P&C segments globally. We have leveraged opportunities to expand our business relationships with our clients and brokers and further improve our portfolio, with double digit year-on-year growth in Non-Life renewable treaty premium. I am very confident that we will continue to build on these achievements to deliver great results in 2018.”

 

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