NU Online News Service, Nov. 1, 1:57 p.m. EDT
PartnerRe Ltd. and Greenlight Re reported drops in net income for the third quarter of this year while executives at both companies say they are beginning to see improvements in rates.
Pembroke, Bermuda-based PartnerRe says net income fell 66 percent, or $344 million, to $180 million for the third quarter of this year.
Total revenues were down 16 percent, or $288 million, to $1.5 billion. The combined ratio rose 12.4 points to 93.1.
For the first nine months of this year, the company reported a net loss of $503 million compared to net income of $796 million for the same period last year.
Revenues were down 14 percent, or $637 million, to $3.9 billion. The combined ratio rose 31.5 points to 126.7.
“We had a respectable third quarter results overall, with a 10.3 percent annualized operating ROE (return on equity), which is below our long term ROE goal, but reasonable given the current low interest rate environment,” says Costas Miranthis, PartnerRe president and chief executive officer in a statement.
He says the third quarter benefitted from the absence of large catastrophe losses, which improved reserve development. However, the company did have to increase its estimates of loss for first quarter earthquake events.
For the first nine months total direct losses related to 2011 catastrophe events are estimated to be $1.4 billion pre tax, net of reinstatements, reinsurance and commission adjustments.
Renewals are making the company “cautiously optimistic about market trends” as they are beginning to see increases in many lines, especially short tail lines. There is also an increase in demand for reinsurance.
Grand Cayman, Cayman Islands-basedGreenlight Capitalreports a net loss of $4.5 million for the third quarter of 2011 compared to net income of $29 million for the same period last year. Revenues were down 19 percent, or $21 million, to $91 million.
For the nine months of this year, the company reported net loss of $63 million compared to net income of $34 million. Revenue increased 11 percent to $248 million.
The combined ratio for the nine months of this year was reported at 103.3 and increase of 1.9 points over last year.
“We are pleased with the composition of our existing reinsurance portfolio, despite a nominal loss in the quarter, and we continue to execute our strategy to develop long term reinsurance relationships,” says Bart Hedges, CEO of Greenlight Re. “During the third quarter, we started to see signs of improving market conditions and we are encouraged that a more rational environment will develop in the foreseeable future.”