The worst quarter of natural catastrophes on record has hit the bottom line of the reinsurance industry with a mixed bag of first-quarter results.

Swiss Re reported a net loss of $US665 million ($620 million) for the quarter, down from a profit of $US158 million ($147 million) for the same period last year.

Its property and casualty (P&C) division made an operating loss of $US1.2 billion ($1.1 billion), compared to an operating profit of $US259 million ($242 million) in the first quarter of 2010, due to catastrophe-based pre-tax losses of $US2.3 billion ($2.14 billion).

Its combined ratio for property and casualty rose to 163.7% in the first quarter of 2011, compared to 109.4% in the prior-year period.

Swiss Re CEO Stefan Lippe says “we maintained our focused and disciplined underwriting approach” during the April 1 renewals.

“We were able to grow our property and casualty treaty book by 13% year to date and to outperform the market in terms of pricing adequacy.”

The company says the combination of the recent natural catastrophes, low interest rates and years of price declines “are likely to bring forward the turn in the cycle. The impact of natural catastrophe losses in the first quarter creates an additional challenge but it will also accelerate the market turn we had previously expected in 2012/2013.”

Bucking the trend, Hannover Re made a profit for the quarter, posting net income of €52.3 million ($70 million), though this was well down on the €151 million ($202 million) profit posted for the same quarter last year.

But its combined ratio for non-life business blew out to 123.8% for the quarter, up from 99.3% the previous year, as its net underwriting loss hit €330.9 million ($443 million).

“The fact that we were able to generate a quarterly profit despite the enormous catastrophe loss burden was due to the following effects: run-off profits booked on reserves constituted for losses in prior years, very healthy investment income, the refund of taxes paid for the years 1993 to 2001 as well as the satisfying performance of our life and health reinsurance business,” CEO Ulrich Wallin said.

Gross written premium (GWP) jumped 10% for the quarter to €3.1 billion ($4.2 billion) while net major losses for the year to date due to the catastrophes amounted to €572 million ($776 million), “far exceeding” its major loss budget for the full year of €530 million ($710 million).

Its losses relating to Japan amount to €232 million ($311 million), with €152 million ($204 million) attributable to the Christchurch earthquake and €52 million ($70 million) to the Australian floods.

Hannover Re subsequently lowered its full-year profit target from €650 million ($871 million) to €500 million ($670 million), subject to major losses for the rest of the year not exceeding €410 million ($549 million).

The company says the January 1 renewals were “better than expected” and that “substantial rate increases can be seen in the wake of the recent major loss events”. It adds that April 1 renewals in Japan, Australia and New Zealand, as well as for marine and aviation business, were “favourable”.

French reinsurer Scor fell to a loss of €80 million ($107 million) for the first quarter, but it says “a strong technical performance from non-life business lines and by an improved operating margin on the life side” helped to offset the high costs of the natural catastrophes.

The catastrophe bill came in at €367 million ($492 million) pre tax, which saw its P&C combined ratio blow out to 135.2%.

It recorded GWP of €1.7 billion ($2.3 billion), up 3.2% compared to the first quarter of 2010, and the company says it is on track to achieve its objective of a 9% increase in P&C business in 2011, due to “very satisfactory” January renewals, which saw GWP up by 13%, a figure which was matched at its April 1 renewals.

CEO Denis Kessler says Scor’s performance “bears witness to the relevance of our strategy, which is based on significant geographical and business diversification, a moderate risk appetite, a highly efficient capital shield and a prudent asset management policy”.

Bermuda-based Partner Re reported a net loss of $US807 million ($751 million) for the first quarter, with losses as a result of the catastrophes of $US1.1 billion ($1 billion), pre-tax.

Its non-life combined ratio was 193.7%, the majority of which related to the Japanese earthquake and tsunami, the Christchurch earthquake and Cyclone Yasi and the Australian floods. 

President and CEO Costas Miranthis says while the pricing reaction in loss-affected areas is predictable, “the broader re-evaluation of catastrophe risk is beginning to change the pricing dynamics in all property catastrophe markets”.

“While clearly we are at an early stage in this process, the initial indications we've received are encouraging. For longer-tail lines, we do not have the same pricing momentum, but we have seen a bottoming-out in rate levels and encouraging signs that opportunities will arise as economies begin their recovery.”