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.
Risk Market News Newsletter
Join the newsletter to receive the latest updates in your inbox.