Two Bermuda reinsurers reported sharply different earnings as PartnerRe says first quarter net income fell 35 percent on investment declines while Arch Capital Group saw its net income grow 56 percent as its reinsurance business grew.
Pembroke, Bermuda-based PartnerRe says net income dropped $126 million to $234 million, hurt by a 16-percent drop in investment income and unrealized investment gains dropping 88 percent. However, gross premium written climbed 12 percent during the first quarter to $1.76 billion and the combined ratio improved 3 points to 81.7.
“Reinsurance markets are evolving rapidly and present challenges,” observes PartnerRe President and CEO Costas Miranthis. He says while pricing has improved, competition has intensified in recent months, but that has not changed the company's desire to carefully underwrite risks.
Hamilton, Bermuda-based Arch Capital's net income jumped $92 million to $251 million in the quarter as its reinsurance business saw gross premiums written rise 25 percent to $476 million. The increase reflects growth in most lines of business including Mortgage resulting from reinsurance coverage for newly-originated U.S. Residential Mortgage business, Casualty and other Specialty lines. The increases in Specialty primarily resulted from renewals of the Credit and Surety lines acquired from Ariel Reinsurance Co. Ltd. in April of last year.
Gross written premiums for the company's insurance division were virtually unchanged at $689 million for the first three months of 2013. The company says a mix of higher rate and more exposures led to increases in its Construction line while Accident and Health grew from new business.
The results produced a company-wide combined ratio of 84.6, an improvement of 5.5 points from 2012's first quarter.
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