Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

PartnerRe’s losses from insurance-linked securities reach over 10% of annual loss


You may recall that we wrote about Bermudian reinsurer PartnerRe’s losses from their insurance-linked security investments a number of times earlier this year. After some of the major catastrophes in the first half of 2011, PartnerRe disclosed the amount of losses they were facing from their ILS investment portfolio.

First they disclosed that the Japan quake would have an impact on their ILS holdings, then they revealed a number of $49m as the loss figure from insurance-linked securities and catastrophe bonds in Q1 2011 and finally they said in June that they expected losses from the tornadoes in the U.S. to impact their ILS and cat bonds (suggesting they invested in Mariah Re).

Now they have announced their third-quarter and full results for the first nine months of 2011. The press release discloses a loss of $54m ‘primarily related to insurance-linked securities’ from the nine months, a figure that suggests their exposure to the Mariah Re cat bonds was pretty low.

Their total net loss for the first nine months is reported as $502.6m, meaning that their cat bond and ILs investment losses have made up more than 10% of their total loss. It would be interesting to know how much interest PartnerRe made from their cat bond investments this year to see how that offset the losses. Given the severity of the catastrophes experienced this year, their ILS loss cannot come as a huge surprise.

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