First-quarter catastrophes drove down results for several insurers and reinsurers as three Bermuda companies and Luxembourg-based Flagstone Reinsurance Holdings reported 2011 first-quarter net losses.
The latest announcements follow last week's reports from Aspen Insurance Holdings, Transatlantic Holdings and RenaissanceRe of net losses of $151.7 million, $190 million and $248 million respectively.
This week, Pembroke, Bermuda-based PartnerRe Ltd. says it took a first-quarter net loss of $807 million, compared to net income of $79.7 million in the 2010 first quarter. The company says its 2011 first-quarter operating loss was $735.6 million, compared to an operating loss of $50.4 million a year ago.
PartnerRe President and Chief Executive Officer Costas Miranthis says in a statement, "During the first quarter, we witnessed an exceptional frequency of catastrophic events in international markets. As PartnerRe underwrites a globally diversified portfolio, the losses in Japan, New Zealand and Australia together led to catastrophe losses significantly in excess of our quarterly expectations. Despite heavy losses in the current quarter, we continue to believe in the value of geographic diversification of our catastrophe portfolio as a means of optimizing our long-term risk-adjusted returns."
The company's non-life combined ratio was 193.7, which includes 115.8 points related to catastrophes. Catastrophe losses for the quarter are estimated to be $1.1 billion for non-life, $4 million for life and $49 million for the company's "corporate and other" segment.
PartnerRe saw pre-tax net realized and unrealized investment losses of $112 million.
XL Group, based in Hamilton, Bermuda, reports a 2011 first-quarter net loss attributable to shareholders of $227.3 million, compared to net income of $128 million a year ago. The company says it took losses of $387.4 million from catastrophes in the quarter, compared to $181.1 million in the 2010 first quarter.
Losses included $242.6 million from the March 11 Japan earthquake and tsunami, $75.3 million from the February New Zealand earthquake and $66.9 million from the January Australian floods.
XL Group's combined ratio jumped to 125.8, compared to 100.5 a year ago.
The company says net realized investment losses for the quarter were $66.4 million, compared to losses of $36.2 million in the 2010 first quarter.
In a conference call on the results, XL Group CEO Mike McGavick said he is seeing "pockets of quickly-improving areas" with respect to price. He says the conversation is beginning to change, as recent catastrophe events have "re-awoken people to risks." He says it is unknown whether events will lead to a market-wide change, but he called the change in conversations "real and noteworthy."
Flagstone Re says its 2011 first-quarter net loss was $161.2 million, compared to net income of $31.5 million in the 2010 first quarter.
The company had a combined ratio of 170.3, compared to 97.6 a year ago, and recorded an underwriting loss of $171.9 million compared to underwriting income of $16.3 million a year ago.
Net realized and unrealized investment losses totaled $10.9 million, compared to $9.8 million a year ago.
Flagstone Re CEO David Brown says, "While our diversification remains a key strategic differentiator, and has over time resulted in an excellent long-term loss ratio, the international loss activity in the quarter reached record high levels, a historical anomaly which is reflected in our results."
Hamilton, Bermuda-based Alterra Capital Holdings Ltd. reports a 2011 first-quarter net loss of $46.7 million, compared to net income of $36.4 million a year ago.
Alterra, formerly known as Max Capital Group Ltd. was formed on May 12, 2010 by the merger of Max and Harbor Point Limited. Alterra's 2011 first-quarter results include the results of former Harbor Point companies.
Alterra's combined ratio was 112.5 compared to 90.5 a year ago. The company saw net realized and unrealized investment losses of $18.8 million compared to gains of $6.4 million in the 2010 first quarter.
W. Marston Becker, president and chief executive officer of Alterra, says in a statement, "The first quarter of 2011 was marked by the effects of major property catastrophe events in Japan, New Zealand and Australia. These have been significant industry events; however, our strategy of diversifying and limiting our property catastrophe risk exposures resulted in a manageable level of losses and limited the capital impact to less than 4.5 percent of our 2011 opening shareholders' equity—in line with our previously announced estimates."
He adds that he expects to see improved pricing conditions in the international property reinsurance arena as a result of the first-quarter catastrophe events.
Catastrophes also drove down ACE's first-quarter net income by 66 percent [link], although the company still posted net income of $250 million.
Swiss Re blamed catastrophes for its 2011 first-quarter net loss of $665 million.
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