8-K 1 apr2604_partner8k.htm PARTNER 8K

 

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):
 April 26, 2004

PartnerRe Ltd.
(Exact Name of Registrant as Specified in Charter)

Bermuda
(State or Other Jurisdiction
of Incorporation)

0-2253
(Commission File Number)

Not Applicable

(I.R.S. Employer
Identification No.)

Chesney House, 96 Pitts Bay Road, Pembroke, Bermuda
(Address of Principal Executive Offices)

HM 08
(Zip Code)

(441) 292-0888
(Registrant’s Telephone Number, Including Area Code)

 

 

 



Item 12. Results of Operations and Financial Condition

The following information is furnished pursuant to Item 12, “Results of Operations and Financial Condition.” On April 26, 2004, PartnerRe Ltd. issued a press release reporting its 2004 first quarter results. A copy of the press release is attached hereto as Exhibit 1 and is hereby incorporated by reference.

Exhibit 1. Text of Press Release of PartnerRe Ltd., dated April 26, 2004.






SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PartnerRe Ltd.
(Registrant)
   
   
By:
/s/  Amanda Sodergren
 
  Name:  
 Amanda Sodergren
  Title: 
Associate General Counsel


 

 

 

 

Date: April 26, 2004




INDEX TO EXHIBITS

Exhibit
   No.   		  Description
1  

Text of Press Release of PartnerRe Ltd., dated April 26, 2004.




 

PartnerRe Ltd. Reports First Quarter 2004 Results

  • Net Income per share of $2.59; Operating Earnings per share of $2.02
  • Annualized Net Income ROE of 24%; Annualized Operating ROE of 19%
  • Book Value Growth of 7% to $45.59

PEMBROKE, Bermuda, April 26, 2004 -- PartnerRe Ltd. (NYSE:PRE) today reported record net income of $145.6 million, or $2.59 per share on a fully diluted basis, for the first quarter of 2004. This net income includes net after-tax realized gains on investments of $31.0 million or $0.57 per share. Net income for the first quarter of 2003, including net after-tax realized gains on investments of $37.9 million or $0.70 per share, was $124.4 million or $2.22 per share. Operating earnings for the first quarter of 2004 were $109.7 million or $2.02 per share on a fully diluted basis. Operating earnings exclude net after-tax realized investment gains and losses and are calculated after payment of preferred dividends. This compares to operating earnings of $81.4 million, or $1.52 per share, for the first quarter of 2003. All references to per share amounts are on a fully diluted basis.

PartnerRe President & Chief Executive Officer, Patrick Thiele, said, “We achieved exceptional results for the first quarter of 2004, with an annualized operating return on equity of 19% and book value growth of 7% for the quarter and 28% year over year. With our globally diversified business, strong ratings, and size, we are well positioned to achieve continued high quality earnings and generate real economic value for our shareholders over the short and long-term.”

Summary unaudited consolidated financial data for the period is set out below.

U.S.$ thousands (except per share amounts)   Three months ended March 31  
        2004             2003  
Net Premiums Written   $1,523,701       $1,234,747  
Net Premiums Earned     $892,787         $806,237  
Non-life Combined Ratio     90.7%           93.2%  
Net Income     $145,644         $124,369  
Net Income per share (a)       $2.59             $2.22  
Net Operating Earnings (a)     $109,740           $81,437  
Net Operating Earnings per share (a)       $2.02             $1.52  

 

 

PartnerRe Ltd. Telephone +1 441 292 0888
Chesney House, Fax +1 441 292 6080
96 Pitts Bay Road www.partnerre.com
Pembroke, Bermuda HM 08  

 


(a) Net income per share is defined as net income available to common shareholders divided by the weighted average number of fully diluted shares outstanding for the period. Net income available to common shareholders is defined as net income less preferred dividends. Net operating earnings is net income available to common shareholders excluding after-tax net realized gains/losses on investments. Net operating earnings per share is defined as net operating earnings divided by the weighted average number of fully diluted shares outstanding for the period. Per share results are on a fully diluted basis.

Net premiums written for the first quarter 2004 were $1.5 billion, a 23% increase over the comparable period in 2003. Total revenues increased 11% in the quarter to $1.0 billion, including $892.8 million of net premiums earned – an increase of 11%; net investment income of $73.6 million – an increase of 20%; and net realized investment gains of $37.8 million – a decrease of 6%.

At March 31, 2004, total assets were $11.9 billion, total capitalization was $3.4 billion, and total shareholders’ equity was $2.8 billion. This compares to total assets of $10.9 billion, total capitalization of $3.2 billion, and total shareholders’ equity of $2.6 billion at December 31, 2003. Book value per common share was $45.59 on a fully diluted basis, compared to $42.48 per share at December 31, 2003.

Separately, the Company announced today that its Board of Directors declared a regular quarterly dividend of $0.34 per common share. The dividend will be payable on June 1, 2004, to common shareholders of record on May 21, 2004, with the stock trading ex-dividend commencing May 19, 2004.

Results of Operations

“We are very pleased with the performance of our operations this quarter, highlighted by a Non-Life combined ratio of 90.7%,” said Mr. Thiele. “In addition, we achieved very strong investment income growth as a result of the significant cash flow generated over the past several quarters.

“PartnerRe has now reached a level of size and diversification that adds strength and stability to our earnings. Notwithstanding several large losses in the Energy and Marine lines, including a $30 million loss on the Algerian gas plant explosion in January, we were able to produce excellent quarterly results.

 

PartnerRe Ltd. Telephone +1 441 292 0888
Chesney House, Fax +1 441 292 6080
96 Pitts Bay Road www.partnerre.com
Pembroke, Bermuda HM 08  

 

 


 

“Our growth of 23% in net premiums written this quarter is positively impacted by a number of factors and is therefore not indicative of full year expected growth. The Non-Life segment premiums written reflect refinements in the process used for estimating premiums written, whereby we recognized during the first quarter full year estimated net premiums written of $146 million on certain portfolio treaties, as opposed to reporting these premiums progressively over the year. This change, however, will have no impact on full year premiums written.”

Mr. Thiele added, “Our results this quarter underscore what we believe is one of the strongest balance sheets in the industry. This quarter’s results include $59 million of reductions to prior period reserves. This change is consistent with our reserving philosophy, whereby we reserve the current year prudently, and adjust reserves as appropriate based upon the emergence of actual data or new circumstances after the risk period ends and client reports are received. We are convinced this approach leads to a stronger reserve position and greater balance sheet integrity.”

Results by Segment

As of January 2004, the Company is reporting separately on its Alternative Risk Transfer (ART) business as a new reporting segment in addition to the Company’s other two segments, Non-Life and Life. The ART segment includes finite reinsurance, structured finance, weather related products, as well as the results of the Company’s investment in Channel Re.

The Non-Life segment reported net premiums written of $1.4 billion for the quarter, an increase of 25%. The combined ratio was 90.7% for the first quarter compared to 93.2% for the same period in 2003. The Non-Life technical result increased 44% to $125 million. The results for this quarter include approximately $59 million of reductions to prior period reserves, in light of recent information received from clients.

The U.S. Property and Casualty business, which represented approximately 25% of total net premiums written for the quarter, reported net premiums written of $376 million, an 18% increase over the prior year’s first quarter, driven by growth in specialty casualty lines and motor business. Net premiums earned increased 14% during the quarter when compared to the same period in 2003. The technical ratio for this segment was 93.3%, compared to 96.0% in the first quarter of 2003.

The Global (Non-U.S.) Property and Casualty business, which represented approximately 31% of total net premiums written, reported net premiums written of $469 million for the

 

PartnerRe Ltd. Telephone +1 441 292 0888
Chesney House, Fax +1 441 292 6080
96 Pitts Bay Road www.partnerre.com
Pembroke, Bermuda HM 08  

 

 


first quarter of 2004, compared to $305 million in 2003. A substantial portion of the growth in reported net premiums written relates to an increase of $146 million stemming from refinements in the process used for estimating premiums written on certain portfolio treaties, which was largely offset by a corresponding increase in unearned premiums. Net premium earned during the quarter were $255 million, as compared to $202 million in last year’s first quarter. The technical ratio for this segment was 98.7% compared to 92.2% for the same period in 2003.

The Worldwide Specialty business, which represented approximately 39% of total net premiums written for the quarter, reported net premiums written of $596 million for the first quarter, a 12% increase over the prior year period. Net premiums earned increased 3% during the quarter. This sub-segment’s technical ratio of 68.9%, compared to 80.7% for the first quarter of 2003, reflects strong results in several lines, particularly catastrophe, special risk, and aviation, despite a number of large losses in marine and energy. The results for this quarter include a reduction in reserves for prior years of approximately $66 million, based upon most recent information received from clients.

The Life segment, which markets coverages primarily in Europe, Canada and Latin America, and represented approximately 5% of total net premiums written, reported net premiums written of $83 million for the quarter, a marginal increase over the first quarter of 2003. The allocated technical result for the quarter was a loss of $4 million, compared to a gain of $1 million for the comparable period in 2003. This quarter’s results include a $5 million charge to reduce deferred acquisition costs for the segment’s discontinued U.S. annuity business.

The ART segment comprises finite reinsurance, structured finance, weather related products, and in the future will include the results of the Company’s recent investment in Channel Re. Premiums are not a representative measure of activity in ART, as reinsurance accounting does not apply for much of the business in this segment. The ART segment generally recognizes gross margins, net spreads, or changes in the value of derivative instruments on its various transactions either on the “premium written”, “premium earned”, “investment income”, or “other income” line of the income statement, according to applicable accounting guidance. The ART segment reported a technical result of $2 million for the first quarter of 2004, as compared to nil in the first quarter of 2003. During the first quarter of 2004, positive results in the segment’s credit business were partly offset by losses in the segment’s weather business.

 

 

PartnerRe Ltd. Telephone +1 441 292 0888
Chesney House, Fax +1 441 292 6080
96 Pitts Bay Road www.partnerre.com
Pembroke, Bermuda HM 08  

 

 

Commentary and Outlook

“As previously reported, we maintained our excellent book of business at the January 1 renewals,” said Mr. Thiele. “In the Non-Life segment, market conditions have softened in the shorter tail lines, but profitability remains attractive. Casualty lines remained strong, and we have had excellent production in this area. As noted previously, we increased our book of business by over 5% at the January 1 renewals.

“We have made significant progress towards our stated plan for 2004 of $3.9 billion in net premiums written, a minimum of $6.90 in operating earnings per share, a 17% operating return on beginning equity, and combined ratio between 92-95%, barring any unusually large loss events.”


_____________________________________________

The Company uses operating earnings, diluted operating earnings per share and operating return on beginning equity to measure performance, as these measures focus on the underlying fundamentals of our operations without the influence of realized gains and losses from the sale of investments, which is driven by the timing of the disposition of investments and not by our operating performance. For planning purposes, the Company does not anticipate realized investment gains or losses. The Company also uses technical ratio and technical result as measures of underwriting performance. These metrics exclude overhead expenses. All references to per share amounts in this press release are on the basis of fully diluted shares. Certain reclassifications have been made to prior year consolidated financial statement amounts to conform to the current year presentation and the new segment presentation.


_____________________________________________

PartnerRe Ltd. is a leading global reinsurer, providing multi-line reinsurance to insurance companies. Risks reinsured include property, casualty, motor, agriculture, aviation/space, catastrophe, credit/surety, engineering/energy, marine, special risks, other lines, life/annuity and health. At year-end 2003, total revenues were $3.9 billion. As of March 31, 2004, total assets were $11.9 billion, total capitalization was $3.4 billion and total shareholders’ equity was $2.8 billion. Our major reinsurance operations have ratings of AA- from Standard & Poor’s, Aa3 from Moody’s, A+ from A.M. Best, and AA from Fitch.

PartnerRe on the Internet: www.partnerre.com

Forward-looking statements contained in this press release are based on the Company’s assumptions and expectations concerning future events and financial performance and

 

PartnerRe Ltd. Telephone +1 441 292 0888
Chesney House, Fax +1 441 292 6080
96 Pitts Bay Road www.partnerre.com
Pembroke, Bermuda HM 08  

 

 


are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. PartnerRe’s forward-looking statements could be affected by numerous foreseeable and unforeseeable events and developments such as exposure to catastrophe or other large losses, adequacy of reserves, risks associated with implementing business strategies, levels and pricing of new and renewal business achieved, credit, interest, currency and other risks associated with the Company’s investment portfolio and other factors identified in the Company’s filings with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking information contained herein, readers are cautioned not to place undue reliance on thes e forward-looking statements, which speak only as of the dates on which they are made. The Company disclaims any obligation to publicly update or revise any forward-looking information or statements.

Contacts: PartnerRe Ltd Citigate Sard Verbinnen
  (441) 292-0888 (212) 687-8080
  Investor Contact: Robin Sidders Jim Barron/Hallie Bozzi
  Media Contact: Celia Powell  

 

 

PartnerRe Ltd. Telephone +1 441 292 0888
Chesney House, Fax +1 441 292 6080
96 Pitts Bay Road www.partnerre.com
Pembroke, Bermuda HM 08  

 


PartnerRe Ltd.
Consolidated Statements of Operations and Comprehensive Income
 (Expressed in thousands of U.S. dollars, except per share data)
(Unaudited)

For the three
months ended
March 31,
2004		 For the three
months ended
March 31,
2003
             
             
Revenues            
     Gross premiums written   $ 1,553,622   $ 1,261,590  
       
 
     Net premiums written   $ 1,523,701   $ 1,234,747  
     Increase in unearned premiums    (630,914 )  (428,510 )
       
 
     Net premiums earned    892,787    806,237  
     Net investment income    73,584    61,129  
     Net realized investment gains    37,813    40,070  
     Other income    2,793    2,277  
       
 
      Total Revenues    1,006,977    909,713  
       
 
Expenses  
     Losses and loss expenses including life policy benefits    569,858    555,997  
     Acquisition costs    204,331    169,722  
     Other operating expenses    67,562    51,271  
     Interest expense    10,168    3,196  
     Net foreign exchange gains    (1,197 )  (3,734 )
       
 
     Total Expenses    850,722    776,452  
       
 
Income before distributions related to Trust Preferred  
     and Mandatorily Redeemable Preferred Securities and taxes    156,255    133,261  
     Distributions related to Trust Preferred and Mandatorily  
        Redeemable Preferred Securities    -    6,815  
     Income tax expense    10,611    2,077  
       
 
Net income   $ 145,644   $ 124,369  
       
 
Preferred dividends   $ 4,894   $ 5,000  
       
 
Operating earnings available to common shareholders   $ 109,740   $ 81,437  
       
 
Comprehensive income   $ 197,396   $ 102,437  
       
 
Per Share Data:  
     Earnings per common share:  
         Basic operating earnings   $ 2.04   $ 1.55  
         Net realized investment gains, net of tax    0.58    0.73  
       
 
         Basic net income   $ 2.62   $ 2.28  
       
 
         Weighted average number of common shares  
              outstanding    53,781.1    52,403.2  
         Diluted operating earnings   $ 2.02   $ 1.52  
         Net realized investment gains, net of tax    0.57    0.70  
       
 
         Diluted net income   $ 2.59   $ 2.22  
       
 
         Weighted average number of common and  
              common equivalent shares outstanding    54,370.1    53,738.6  

 

7


PartnerRe Ltd.
Consolidated Balance Sheets
 (Expressed in thousands of U.S. dollars, except per share data and parenthetical share data)
(Unaudited)

March 31,
2004		 December 31,
2003
Assets            
     Investments and cash  
     Fixed maturities, at fair value  
      (amortized cost: 2004, $5,315,968; 2003, $5,241,494)   $ 5,470,485   $ 5,343,651  
     Short-term investments, at fair value  
      (amortized cost: 2004, $44,878; 2003, $46,271)    44,902    46,307  
     Equities, at fair value  
      (cost: 2004, 644,607; 2003, $614,697)    761,444    713,950  
     Trading securities, at fair value (cost: 2004, $96,907; 2003, $113,385)    104,942    122,544  
     Cash and cash equivalents, at fair value, which approximates amortized cost    710,072    558,692  
     Other invested assets    84,932    11,590  
       
 
     Total investments and cash    7,176,777    6,796,734  
     Accrued investment income    104,078    132,291  
     Reinsurance balances receivable    1,747,725    1,214,269  
     Reinsurance recoverable on paid and unpaid losses    198,408    188,706  
     Funds held by reinsured companies    1,072,965    1,068,432  
     Deferred acquisition costs    444,617    354,854  
     Deposit assets    490,734    508,037  
     Taxes recoverable    57,429    80,835  
     Goodwill    429,519    429,519  
     Other    131,718    129,337  
       
 
Total Assets   $ 11,853,970   $ 10,903,014  
       
 
Liabilities  
     Unpaid losses and loss expenses   $ 4,904,394   $ 4,755,059  
     Policy benefits for life and annuity contracts    1,137,879    1,162,016  
     Unearned premiums    1,672,972    1,035,450  
     Funds held under reinsurance treaties    27,288    27,399  
     Deposit liabilities    532,458    570,634  
     Long-term debt    220,000    220,000  
     Net payable for securities purchased    35,258    5,389  
     Accounts payable, accrued expenses and other    148,726    126,675  
     Debt related to Trust Preferred Securities    206,186    206,000  
     Mandatorily Redeemable Preferred Securities    200,000    200,000  
       
 
Total Liabilities    9,085,161    8,308,622  
       
 
Shareholders Equity  
     Common shares (par value $1.00, issued and outstanding:  
         2004, 53,781,199; 2003, 53,741,553)    53,781    53,742  
     Preferred shares (par value $1.00, issued and outstanding: 2004, 11,600,000;  
        2003, 11,600,000; aggregate liquidation preference: $290,000,000)    11,600    11,600  
     Additional paid-in capital    1,023,561    1,023,167  
     Deferred compensation    (359 )  (125 )
     Accumulated other comprehensive income:  
        Net unrealized gains on investments, net of tax    224,435    166,492  
        Currency translation adjustment    10,466    16,657  
     Retained earnings    1,445,325    1,322,859  
       
 
Total Shareholders' Equity    2,768,809    2,594,392  
       
 
Total Liabilities and Shareholders Equity   $ 11,853,970   $ 10,903,014  
       
 
Shareholders Equity Per Common Share   $ 46.09   $ 42.88  
       
 
Diluted Book Value Per Common and Common Equivalent  
     Share (assuming exercise of warrants and stock options)   $ 45.59   $ 42.48  
       
 
Number of Diluted Common Shares Outstanding    54,370.3    54,242.8  
       
 

 

8


PartnerRe Ltd.
Supplementary Information
 (in millions of U.S. dollars)
(Unaudited)

SEGMENT INFORMATION
For the three months ended March 31, 2004

U.S. P&C Global (Non-
U.S. P&C)		 Worldwide
Specialty		 Total Non-Life
Segment		 ART
Segment (A)		 Life Segment Corporate Total
     Gross premiums written   $ 376   $ 469   $ 619   $ 1,464     $ 1   $ 89    -   $1,554  
     Net premiums written $ 376  $ 469  $ 596  $ 1,441    $-   $ 83    -   $1,524  
     (Increase) decrease in unearned premiums   (153)   (214)   (253)  (620)   2    (13 )  -    (631 )
       
 
 
 
   
 
 
 
     Net premiums earned   223   255   343   821    2    70    -    893  
     Losses and loss expenses including  
        life policy benefits   (166)   (187)   (164)  (517)   -    (53 )  -    (570 )
     Acquisition costs   (42)   (64)   (73)  (179)   -    (25 )  -    (204 )
       
 
 
 
   
 
 
 
     Technical Result $ 15  $ 4    $ 106   $ 125   $ 2     (8 )  -   $119  
     Other income   n/a   n/a   n/a   -    3    -    -    3  
     Other operating expenses   n/a   n/a   n/a   (48)   (4 )  (6 )  (10 )  (68 )
       
 
 
 
   
 
 
 
     Underwriting Results   n/a   n/a   n/a   $ 77   $ 1   $ (14 )  n/a    54  
     Net investment income   n/a   n/a   n/a   n/a    -    10    64    74  
     Allocated Life Technical Result (6)   n/a   n/a   n/a   n/a    n/a   $ (4 )  n/a    n/a  
     Net realized investment gains   n/a   n/a   n/a   n/a    n/a    n/a    38    38  
     Interest expense   n/a   n/a   n/a   n/a    n/a    n/a    (10 )  (10 )
     Net foreign exchange gains   n/a   n/a   n/a   n/a    n/a    n/a    1    1  
     Income tax expense   n/a   n/a   n/a   n/a    n/a    n/a    (11 )  (11 )
       
 
 
 
   
 
 
 
Net income   n/a   n/a   n/a   n/a    n/a    n/a    n/a    146  
       
 
 
 
   
 
 
 
Loss ratio (1)   74.3 %   73.5 %   47.6 %   62.9 %  
Acquisition ratio (2)   19.0    25.2    21.3    21.9                       
       
 
 
 
                         
Technical ratio (3)   93.3 %   98.7 %   68.9 %   84.8 %  
Other overhead expense ratio (4)               5.9         
                       
       
Combined ratio (5)                       90.7 %        
                       
       

(A) This segment will include the Company's investment income from Channel Re; however, results for the period ended March 31, 2004 do not include income from Channel Re as Channel Re's first quarter's results will be reported to the Company during the second quarter.

For the three months ended March 31, 2003

U.S. P&C Global (Non-
U.S. P&C)		 Worldwide
Specialty		 Total Non-Life
Segment		 ART
Segment		 Life Segment Corporate Total
     Gross premiums written   $ 318   $ 305   $ 552   $ 1,175   $ -     $ 87   $-   $1,262  
     Net premiums written $ 318  $ 305 $ 530 $ 1,153 $ -    $ 82   $-   $1,235  
     Increase in unearned premiums   (122)  (103)  (197)  (422)  -    (7 )  -    (429 )
     
 
 
 
 
   
 
 
     Net premiums earned $ 196  $ 202 $ 333 $ 731 $ -      75    -   $806  
     Losses and loss expenses including  
        life policy benefits   (138)  (138)  (207)  (483)  -    (73 )  -    (556 )
     Acquisition costs   (50)  (49)  (62)  (161)  -    (9 )  -    (170 )
     
 
 
 
 
   
 
 
     Technical Result $ 8  $ 15 $ 64 $ 87 $ -    $ (7 ) $-   $80  
     Other income   n/a   n/a   n/a   -   2    -    -    2  
     Other operating expenses   n/a   n/a   n/a   (38)  (2)   (4 )  (7 )  (51 )
     
 
 
 
 
   
 
 
     Underwriting Results   n/a   n/a   n/a $ 49 $ -   $ (11 )  n/a   $ 31  
     Net investment income   n/a   n/a   n/a   n/a   -    12    49    61  
     
 
 
 
 
   
 
 
     Allocated Life Technical Result (6)   n/a   n/a   n/a   n/a   n/a   $ 1    n/a    n/a  
     Net realized investment gains   n/a   n/a   n/a   n/a   n/a    n/a    40    40  
     Interest expense   n/a   n/a   n/a   n/a   n/a    n/a    (3 )  (3 )
     Net foreign exchange gains   n/a   n/a   n/a   n/a   n/a    n/a    4    4  
     Income tax expense   n/a   n/a   n/a   n/a   n/a    n/a    (2 )  (2 )
     Distributions related to Trust Preferred and                                    -
       Mandatorily Redeemable Preferred Securities   n/a   n/a   n/a   n/a   n/a    n/a    (7 )  (7 )
     
 
 
 
 
   
 
 
     Net income   n/a   n/a   n/a   n/a   n/a    n/a    n/a   $ 124  
     
 
 
 
 
   
 
 
Loss ratio (1)   70.3 %   68.2 %   62.2 %   66.0 %  
Acquisition ratio (2)   25.7    24.0    18.5    22.0                       
     
 
 
 
 
   
 
 
Technical ratio (3)   96.0 %   92.2 %   80.7 %   88.0 %  
Other overhead expense ratio (4)               5.2           
                       
                         
Combined ratio (5)                       93.2 %                          
                       
                         

(1) Loss ratio is obtained by dividing losses and loss expenses by net premiums earned.
(2) Acquisition ratio is obtained by dividing acquisition costs by net premiums earned.
(3) Technical ratio is defined as the sum of the loss ratio and the acquisition ratio
(4) Other overhead expense ratio is obtained by dividing other operating expenses by net premiums earned.
(5) Combined ratio is the sum of the technical ratio and the other overhead expense ratio.
(6) Allocated Life technical result is defined as net premiums earned and allocated investment income less losses and loss expenses, acquisition costs and other overhead expenses.

 

9


 

PartnerRe Ltd.
Supplementary Information

(Unaudited)

For the three
months ended
March 31,
2004		 For the three
months ended
March 31,
2003
Distribution of Net Premiums Written by            
Line of Business:  
                           Non-Life  
                              Property and Casualty  
                                   Property    21 %  19 %
                                   Casualty    22    20  
                                   Motor    13    11  
                              Worldwide Specialty  
                                   Agriculture    2    2  
                                   Aviation/Space    3    5  
                                   Catastrophe    15    18  
                                   Credit/Surety    4    3  
                                   Engineering/Energy    4    6  
                                   Marine    2    3  
                                   Special Risk    9    6  
                           ART    -    -  
                           Life    5    7  
 
Geographic Distribution of Gross Premiums Written:  
                                   Europe    48 %  44 %
                                   North America    37    42  
                                   Asia, Australia and New Zealand    10    9  
                                   Latin America and the Caribbean    4    4  
                                   Africa    1    1  

 

      As at
March 31,
2004 		   
Credit Ratings (Financial Strength Ratings):          
  Standard & Poor's   AA-  
  Moodys   Aa3  
  A.M. Best   A+  

 

As at
March 31,
2004
(in thousands of U.S. dollars)		 As at
December 31,
2003
(in thousands of U.S. dollars)
Capital Structure:                    
  Long-term debt     $ 220,000     6 % $ 220,000     7 %
  Trust Preferred Securities(1)       200,000     6     200,000     6  
  Series B Cumulative Redeemable Preferred Shares (PEPS)       200,000     6     200,000     6  
  6.75% Series C Cumulative Preferred Shares, aggregate liquidation       290,000     9     290,000     9  
  Common Shareholders' Equity       2,478,809     73     2,304,392     72  
       
 
 
 
  Total Capital     $ 3,388,809     100 % $ 3,214,392     100 %
       
 
 
 

 

(1) Neither the Trust that issued the securities not PartnerRe Finance which owns the Trust meet the consolidation requirements of FIN 46(R). Accordingly, the Company shows the related intercompnay debt of $206.2 million on its Consolidated Balance Sheets.

 

10

 


PartnerRe Ltd.
Supplementary Information

(Unaudited)

 

As at
March 31,
2004		 As at
December 31,
2003
Investment Portfolio:                  
  Credit Quality           AAA     57 %  57 %     
                                  AA    3    3  
                                  A    20    19  
                                  BBB    14    14  
                                  Below Investment Grade/Unrated    6    7  
 
  By Class                  U.S. Government     6 %  7 %     
                                  U.S. Mortgage/Asset Backed    18    17  
                                  U.S. Corporates    26    26  
                                  Foreign Fixed Income    31    31  
                                  Equities and Equity Substitutes    15    15  
                                  Cash (net of pending transactions)    4    4  
 
  Expected average duration    3.3 Yrs  3.6 Yrs     
  Average yield to maturity at market    3.4 %  3.8 %     
  (fixed income securities and cash)  
  Average Credit Quality    AA    AA  

 

 

 

For the three
months ended
March 31,
2004		 For the three
months ended
March 31,
2003
  (in thousands of U.S. dollars except per share data)
Reconciliation of Net income to Operating earning              
 available to common shareholders:  
Net income $ 145,644    124,369  
Less:  
     Net realized investment gains, net of tax   31,010    37,932  
     Dividends to preferred shareholders   4,894    5,000  
     
   
Operating income available to common shareholders $ 109,740    81,437  
     
   
Diluted net income per common share $ 2.59   $ 2.22  
Less:  
     Net realized investment gains, net of tax, per common share   0.57    0.70  
     
   
Diluted operating earning per common share $ 2.02   $ 1.52  
     
   
Annualized return on beginning common shareholders' equity  
calculated with net income   24.4 %   26.1 %
Less:  
    Net realized investment gains, net of tax   5.4    8.3  
     
   
Annualized operating return on equity   19.0 %   17.8 %
     
   

 

11