Reinsurance firm PartnerRe announced first-quarter profits of $38 million — $163 million down on the same period last year — as both net premiums written and investment income fell.

Emmanuel Clarke, the firm’s president and chief executive officer, said: “Our annualised adjusted operating return on equity of 3.4 per cent in the first quarter of 2017 reflects prudent underwriting, de-risked investment portfolio, the impact of the change in the Ogden discount rate in the UK, a decline in favourable prior year reserve development and lower profitability in our health line of business.”

He added: “We reported a non-life combined ratio of 96.4 per cent and an improved accident year combined ratio compared to the first quarter of 2016 driven by a lower level of mid-sized loss activity in property and casualty and reduced operating expenses.”

Non-life net premiums written were down 14 per cent in the first quarter of 2017 compared to the same period of 2016, primarily as a result of cancellations and non-renewals, the timing of renewal of a significant agricultural contract and higher premiums ceded.

In the life and health segment net premiums written were up 8 per cent in the first quarter compared to the same period of 2016, primarily driven by new business written in the mortality line of business and an increase in the health line, partially offset by the impact of foreign exchange.

Allocated underwriting result, which includes allocated investment income and other expenses, was $8 million in the first quarter of 2017 compared to $24 million in the same period of 2016.

The decrease was largely attributed to lower profitability in the health line of business due to lower prior years’ reserve development and higher claims activity.

Total net investment return in the first quarter of 2017 was 0.8 per cent based on a total net gain of $130 million, which was driven by net investment income of $99 million, realised and unrealised investment gains of $23 million and interest in earnings of equity method investments of $8 million.

That compared to a total net investment return of $267 million or 1.6 per cent for the first quarter of 2016.

A total of $90 million was spent on other expenses, including $8 million of severance and transaction-related costs.

That compared to a figure of $153 million in the first quarter of last year which included $66 million related to the takeover of PartnerRe by Italian investment giant Exor.

Total capital was $8.1 billion at March 31, 2017, up 0.6 per cent compared to the end of last year, primarily due to net income for the year.

The takeover battle for PartnerRe was one of the island’s major business stories last year, with Italian investment giant Exor eventually seeing off Axis Capital to secure the reinsurer in a $6.9 billion deal.

The acquisition was completed last March and Partner Re became a subsidiary of Exor.

PartnerRe’s common shares were subsequently delisted from the New York Stock Exchange and the Bermuda Stock Exchange.

Exor is controlled by the billionaire Agnelli family, who are behind luxury sports car maker Ferrari and Fiat Chrysler.

The company’s chairman John Elkann became chairman of the board of PartnerRe last year.