First ever losses blamed on Ike and Gustav
Paris Re today announced a net operating loss of $53.7m (£36.2m), for the third quarter ended September 30, 2008, compared with a net operating income of $90m in the third quarter of 2007. Net operating income for the first nine months of 2008 was $96m, a decrease of 52.5% from $204m for the first nine months of 2007.
Gross written premium was $242m for the third quarter of 2008 and $1,342m for the first nine months of 2008 compared with $170m and $1,327m, last year.
The combined ratio was 135.1% for the third quarter of 2008 and 106.7% for the first nine months of 2008 compared with 88.8% and 92.2.
The company said: “The quarterly results were adversely impacted by $130m estimated losses, net of reinsurance and reinstatement premiums, from Hurricane Ike, representing 15.1 points of combined ratio in the nine month results. Storm Emma and Hurricane Gustav contributed an additional $21.1m in estimated losses, net of reinsurance and reinstatement premiums, representing 2.4 points of combined ratio in the nine month results."
Hans-Peter Gerhardt, chief executive officer said: “We are disappointed with our third quarter results which mark the first quarterly loss in the history of Paris Re. Hurricane Ike was a significant loss for Paris Re and the industry. Our results were further adversely impacted by Hurricane Gustav, other large losses and our trade credit business, which is under pressure due to the challenging economic conditions worldwide. Nevertheless, our balance sheet remains very strong, and we are pleased with our prudent investment strategy which has enabled us to build book value per share during 2008 despite high catastrophe loss activity and unprecedented turmoil in the credit markets. We are now convinced that the loss of capital for the industry as a whole will drive up rates. Paris Re is extremely well positioned to take advantage of a hardening reinsurance market.”
