PartnerRe Ltd. on Sunday issued an initial loss estimate related to the April U.S. tornado outbreak of between $50 million to $70 million.
According to a company statement, the net loss will be recorded in the PartnerRe’s second quarter results within its catastrophe, North America, and global (Non-U.S.) specialty sub-segments.
The loss estimates are pre-tax, net of retrocession and reinstatement premiums, and relate to reinsurance and insurance-linked securities “expected to be impacted by these events,” a company statement said.
News of the tornado losses comes after PartnerRe was subject of a credit downgrade last week by Fitch Research. Fitch cited the firm’s “relatively higher exposure to low-frequency but high-severity events” than its peers and over $1billion in catastrophe losses in first quarter following earthquakes in Japan and New Zealand that resulted in a $736 million operating loss.
Fitch downgraded the Insurer Financial Strength rating of Partner Reinsurance Ltd. to ‘AA-‘ from ‘AA’ and the Issuer Default Rating of PartnerRe Ltd. to ‘A+’ from ‘AA-‘. It added that the rating outlook is stable
“While PartnerRe has consistently achieved its goal of generating a 13% operating return on equity through the pricing cycle, Fitch also notes that it already appears unlikely that the company will report a net profit for the full year 2011, which would reflect the second time in the past seven years that PartnerRe has reported an operating and net loss,” Fitch said.
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