PRE Partnerre Ltd.

PartnerRe Ltd. said third-quarter operating earnings fell 6.7% as the reinsurer was hurt by lower premiums.

Operating earnings are a widely watched benchmark for the insurance industry because they exclude realized capital gains and losses from companies' investment portfolios, among other items that aren't considered recurring on a quarterly basis.

PartnerRe is in the process of being acquired by Exor SpA of Italy, which reached a $6.9 billion deal for the reinsurance group in August, ending months of tense negotiations. Under the deal, PartnerRe agreed to terminate its separate merger agreement with Axis Capital Holdings Ltd. and pay Axis a $315 million termination fee.

The deal between Exor and PartnerRe continues the consolidation trend among reinsurers, which take on some or all of the risk of policies sold by primary insurers to individuals and businesses. Reinsurers have faced falling prices because of unusually low catastrophe losses in recent quarters and competing money coming from hedge funds, pension plans and other big investors.

However, in the latest three-month period, international insurers such as PartnerRe were exposed to a wide range of costly events, including explosions at China's Tianjin port. PartnerRe recently estimated losses of $50 million to $70 million related to the disaster.

Chief Executive David Zweiner said in prepared remarks Monday that the results reflected factors including the deal termination fee paid to Axis and continued difficult financial and investment markets.

PartnerRe reported operating earnings of $211.6 million, or $4.42 a share, down from $226.7 million, or $4.47 a share, a year earlier.

Net premiums written decreased 11% to $1.19 billion. Excluding currency impacts, the decline was 5%.

Analysts polled by Thomson Reuters expected per-share operating profit of $2.55 and net premiums written of $1.33 billion.

The latest period included net realized and unrealized investment losses of $133 million, while the year-earlier period included net realized and unrealized investment losses of $34.4 million.

Overall, PartnerRe reported a loss of $229.1 million, or $5.08 a share, compared with a year-earlier profit of $196.4 million, or $3.60 a share, a year earlier. The latest period also included $6.58 a share for the termination fee and reimbursed expenses to Axis.

The combined ratio—a measure of premiums used to cover claims—fell to 82.8% from 84.2%. The latest period reflected losses of 5.4 percentage points related to the Tianjin explosion.

Write to Tess Stynes at tess.stynes@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

October 26, 2015 17:25 ET (21:25 GMT)

Partnerre (NYSE:PRE)
Historical Stock Chart
From Mar 2024 to Apr 2024

Partnerre (NYSE:PRE)
Historical Stock Chart
From Apr 2023 to Apr 2024