EX-99.1 2 dp03781_ex9901.htm
  Exhibit 99.1
News Release

 

PartnerRe Ltd. Reports Record Third Quarter and Nine-Month 2006 Results
   
• Third Quarter Net Income per Share of $3.93; Operating Earnings per Share of $3.55
•

Annualized Third Quarter Net Income ROE of 35%; Annualized Operating ROE of 32%
•

Nine Month Net Income per Share of $8.33; Operating Earnings per Share of $7.88
•

Nine Month Annualized Net Income ROE of 25%; Annualized Operating ROE of 24%
•

Book Value per Share of $52.32, an increase of 17% year-to-date for 2006

 

PEMBROKE, Bermuda, October 23, 2006 -- PartnerRe Ltd. (NYSE:PRE) today reported net income of $235.8 million, or $3.93 per share on a fully diluted basis, for the third quarter of 2006. This net income includes net after-tax realized gains on investments of $22.2 million or $0.38 per share. The net loss for the third quarter of 2005, including net after-tax realized gains on investments of $47.8 million or $0.88 per share, was $288.7 million or $5.48 per share, reflecting the record catastrophe activity in that period. Operating earnings for the third quarter of 2006 were $205.1 million or $3.55 per share on a fully diluted basis. This compares to an operating loss of $345.2 million, or $6.36 per share, for the third quarter of 2005. Operating earnings or losses exclude net after-tax realized investment gains and losses and are calculated after payment of preferred dividends. All references to per share amounts are on a fully diluted basis.

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

U.S.$ thousands (except per share amounts and ratios) Three months ended September 30 Nine months ended September 30
  2006 2005 2006 2005
Net Premiums Written $807,788 $770,808 $2,968,285 $2,949,533
Net Premiums Earned $973,603 $915,487 $2,665,387 $2,692,158
Non-life Combined Ratio 81.4% 156.3% 86.2% 114.6%
Net Income/(Loss) $235,841 $(288,748) $506,614 $(17,424)
Net Income/(Loss) per share (a) $3.93 $(5.48) $8.33 $(0.79)
Net Operating Earnings/(Loss) (a) $205,052 $(345,176) $454,729 $(163,319)
Net Operating Earnings/(Loss) per share (a) $3.55 $(6.36) $7.88 $(2.99)

(a)      Net income/(loss) per share is defined as net income/(loss) available to common shareholders divided by the weighted average number of fully diluted shares outstanding for the period. Net income/(loss) available to common shareholders is defined as net income/(loss) less preferred dividends. Net operating earnings/(loss) is
PartnerRe Ltd. Telephone +1 441 292 0888  
Wellesley House South, Fax +1 441 292 6080  
90 Pitts Bay Road, www.partnerre.com  
Pembroke, Bermuda HM 08    





 

   
News Release

   
 

net income/(loss) available to common shareholders less after-tax net realized gains/losses on investments. Net operating earnings/(loss) per share is defined as net operating earnings/(loss) divided by the weighted average number of fully diluted shares outstanding for the period. Per share results referenced in the text of this press release are on a fully diluted basis. As the effect of dilutive securities would have been antidilutive in the three months and nine months of 2005, the fully diluted per share figures for these periods were compiled using the basic weighted average number of common shares outstanding.

Net premiums written for the third quarter of 2006 were $807.8 million, a 5% increase from the third quarter of 2005, which included $40.3 million of catastrophe reinstatement premiums related to Hurricane Katrina. Excluding the 2005 reinstatement premiums, the growth in net written premiums was 11%. Total revenues for the quarter increased 4% as compared to the third quarter of 2005 to $1.12 billion, including $973.6 million of net premiums earned, net investment income of $115.1 million, and net realized investment gains of $23.0 million. Total revenues increased 8% after adjusting for reinstatement premiums earned in the third quarter of 2005.

For the first nine months of 2006, net premiums written were $3.0 billion, representing a marginal increase from the same period in 2005. Net income was $506.6 million or $8.33 per share. Net income for the period includes net after-tax realized gains on investments of $26.0 million or $0.45 per share. Operating earnings were $454.7 million, or $7.88 per share. The net loss for the first nine months of 2005 was $17.4 million or $0.79 per share including net after-tax realized gains of $120.0 million, or $2.20 per share. The operating loss for the same period in 2005 was $163.3 million or $2.99 per share. Total revenues for the first nine months of 2006 were $3.04 billion, including $2.7 billion of net premiums earned, net investment income of $323.4 million, and net realized investment gains of $19.2 million. Total revenues for the same period in 2005 were $3.13 billion.

Separately, the Company announced today that its Board of Directors declared a regular quarterly dividend of $0.40 per common share. The dividend will be payable on December 1, 2006, to common shareholders of record on November 21, 2006, with the stock trading ex-dividend commencing November 17, 2006.

Results by Segment

The Non-Life segment reported net premiums written of $694 million for the third quarter of 2006, up 5% as compared to the total net premium written for the third quarter of 2005, and up 11% after adjusting for reinstatement premiums. The combined ratio was 81.4% for the

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





 

   
News Release


third quarter of 2006, compared to 156.3% for the same period in 2005. The Non-Life technical result was a gain of $211 million for the third quarter of 2006, compared to a loss of $407 million in 2005. The third quarter of 2005 included $615 million of pre-tax losses net of reinstatement premiums, or 78 points on the combined ratio related to Hurricanes Katrina and Rita, and the Central European floods. For the first nine months, Non-Life net premiums written were $2.6 billion, essentially flat with the same period in 2005. The nine month technical result was a gain of $466 million, compared to a loss of $201 million for the same period in 2005. The combined ratio for the nine month period was 86.2% compared to 114.6% in 2005. European winterstorm Erwin, the Central European floods, and Hurricanes Katrina and Rita contributed pre-tax losses of $676 million net of reinstatement premiums, or 29 points to the nine month 2005 combined ratio, while there have been no major catastrophes in the same period in 2006.

The U.S. Property and Casualty business, which represents approximately 24% of total net premiums written for the quarter, reported net premiums written of $194 million, up 3% over the prior year’s third quarter. Net premiums earned increased 9% to $219 million during the quarter when compared to the same period in 2005. The technical ratio for this sub-segment was 94.5%, compared to 155.5% in the third quarter of 2005. For the first nine months of 2006, net premiums written were $659 million, up 2% from the first nine months of 2005. The nine-month technical ratio was 99.3%, compared to 115.0% in 2005. The technical result for the first nine months of 2006 was $4 million compared to a loss of $94 million in 2005.

The Global (Non-U.S.) Property and Casualty business, which represents approximately 19% of total net premiums written for the quarter, reported net premiums written of $154 million for the third quarter of 2006, an increase of 12% as compared to $137 million for the same period in 2005. Net premiums earned during the quarter were $202 million, up 6% from $191 million in the same period last year. The technical ratio for this sub-segment was 95.5% compared to 88.1% for the same period in 2005. For the nine months, net premiums written were down 11% to $645 million. The nine-month technical ratio for 2006 was 92.4%, compared to 91.0% in 2005. The technical result for the first nine months of 2006 was $43 million compared to $58 million in 2005.

The Worldwide Specialty business, which represents approximately 43% of total net premiums written for the quarter, reported net premiums written of $346 million for the third quarter, up 3% over the prior year quarter. Net premiums earned increased 6% to $430 million during the quarter. This sub-segment’s technical ratio was 55.8%, compared to 178.4% for the third quarter of 2005. For the nine month period, net premiums written were up 4% to $1.3 billion. The nine-month technical ratio was 62.3%, compared to 115.2% in

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





 

   
News Release


2005. The technical result for the first nine months of 2006 was a gain of $419 million compared to a loss of $165 million in 2005.

The Life segment, which markets coverages primarily in Europe, Canada and Latin America, and represents approximately 13% of total net premiums written for the quarter, reported net premiums written of $110 million for the quarter, up 6% over the prior year quarter. The allocated underwriting result for the quarter was a gain of $3 million, flat with the comparable period in 2005. For the nine-month period, net premiums written increased 8% to $351 million, with an allocated underwriting gain of $6 million, compared to $9 million for the comparable period in 2005.

The ART (Alternative Risk Transfer) segment comprises structured risk transfer, principal finance, weather related products, and the results of the Company’s investment in Channel Re. The pre-tax contribution to net income, including the Company’s interest in the earnings of Channel Re, was $9 million for the third quarter of 2006 compared to $4 million for the third quarter of 2005. For the first nine months of 2006, the pre-tax contribution to net income was $31 million compared to $17 million for the same period in 2005.

Balance Sheet Items

At September 30, 2006, total assets were $14.8 billion as compared to $13.7 billion at December 31, 2005. Total investments and cash were $10.3 billion. Over a trailing 12-month period, total investments and cash increased 15%. Gross Non-Life reserves were $6.8 billion, reflecting growth of 5% over the last 12 months. During the third quarter, the Company’s estimate of Non-Life reserves for prior accident years developed favorably by $73 million. The overall third quarter prior year reserve development in the Non-Life segment includes net favorable development in all sub-segments with $3 million in the U.S. P&C sub-segment, $15 million in the Global (Non-U.S.) P&C sub-segment, and $55 million in the Worldwide Specialty sub-segment. In the third quarter of 2005, Non-Life reserves for prior years developed favorably by $90 million.

At September 30, 2006, total capitalization was $4.4 billion, and total shareholders’ equity was $3.5 billion. This compares to total capitalization of $3.9 billion, and total shareholders’ equity of $3.1 billion at December 31, 2005. Book value per common share at September 30, 2006 was $52.32 on a fully diluted basis, compared to $44.57 per share at December 31, 2005.

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





 

   
News Release


Commentary and Outlook

“PartnerRe’s performance over the first nine months of 2006, together with our cumulative performance since 2001, provides clear evidence of the strength of our strategy and indeed the PartnerRe franchise,” PartnerRe Ltd. President & CEO Patrick Thiele said. “While we are pleased with the 24% annualized operating ROE achieved for the first nine months, we maintain the belief that the test of a superior reinsurance company lies in its ability to grow book value over the longer term. The 17% or $7.75 growth in book value year-to-date, and the 13% compound annual growth rate, after the payment of dividends, since 2001, demonstrates our risk management capabilities, particularly our ability to withstand shock losses as well as our ability to take advantage of market opportunities as and when they occur.”

“Looking forward to the next renewal season, current indications are for mixed markets,” Mr. Thiele added. “Outside of the wind-exposed lines, where we expect to see continued strong pricing at January 1, 2007, we are still seeing mixed indications. Risk diversification and access to markets will continue to be key to success, and as a strong, globally diversified reinsurer with both direct and broker distribution channels, excellent risk diversification, and unquestioned financial strength, we are well-positioned to achieve an attractive portfolio of risks in 2007.”

____________________________________________

The Company uses operating earnings, diluted operating earnings per share and operating return on beginning common shareholders’ 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 are 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 other operating expenses. All references to per share amounts in the text of this press release are on the basis of fully diluted shares.

_____________________________________________

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, specialty property, specialty casualty, other

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





 

   
News Release

lines, life/annuity and health, and alternative risk transfer solutions. At December 31, 2005, total revenues were $4.2 billion. As of September 30, 2006 total assets were $14.8 billion, total capitalization was $4.4 billion and total shareholders’ equity was $3.5 billion. Our major reinsurance operations have ratings of AA- (negative outlook) from Standard & Poor’s, Aa3 (negative outlook) from Moody’s, A+ (stable outlook) from A.M. Best, and AA (stable outlook) 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 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 property and casualty 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, changes in accounting policies, 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 these 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 Drew Brown/Hallie Bozzi
  Media Contact: Celia Powell  

     
     
     
PartnerRe Ltd. Telephone +1 441 292 0888  
Wellesley House South, Fax +1 441 292 6080  
90 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 share and per share data)
(Unaudited)

      For the three     For the three       For the nine       For the nine  
      months ended     months ended       months ended       months ended  
      September 30,     September 30,       September 30,       September 30,  
      2006     2005       2006       2005  
                               
                               
                               
Revenues                              
   Gross premiums written   $ 813,449   $ 780,468     $ 3,003,905     $ 2,993,861  
     
   
   
   
                               
   Net premiums written   $ 807,788   $ 770,808     $ 2,968,285     $ 2,949,533  
   Decrease (increase) in unearned premiums     165,815     144,679       (302,898 )     (257,375 )
     
   
   
   
   Net premiums earned     973,603     915,487       2,665,387       2,692,158  
   Net investment income     115,110     93,325       323,382       270,402  
   Net realized investment gains     23,006     56,009       19,176       148,979  
   Other income     7,897     8,559       28,357       20,218  
     
   
   
   
   Total revenues     1,119,616     1,073,380       3,036,302       3,131,757  
     
   
   
   
                               
Expenses                              
   Losses and loss expenses and life policy benefits     540,717     1,111,285       1,580,912       2,271,321  
   Acquisition costs     220,691     219,428       619,373       632,779  
   Other operating expenses     80,853     63,740       231,766       210,930  
   Interest expense     13,671     7,399       39,592       22,089  
   Net foreign exchange losses     6,141     1,478       13,603       3,921  
     
   
   
   
   Total expenses     862,073     1,403,330       2,485,246       3,141,040  
     
   
   
   
                               
Income (loss) before taxes and interest in earnings of equity investments     257,543     (329,950 )     551,056       (9,283 )
   Income tax expense (benefit)     24,915     (39,141 )     52,891       15,149  
   Interest in earnings of equity investments     3,213     2,061       8,449       7,008  
     
   
   
   
Net income (loss)   $ 235,841   $ (288,748 )   $ 506,614     $ (17,424 )
     
   
   
   
                               
Preferred dividends   $ 8,631   $ 8,631     $ 25,894     $ 25,894  
     
   
   
   
                               
Operating earnings (loss) available to common shareholders   $ 205,052   $ (345,176 )   $ 454,729     $ (163,319 )
     
   
   
   
                               
Comprehensive income (loss), net of tax   $ 360,390   $ (333,972 )   $ 521,998     $ (131,707 )
     
   
   
   
                               
Per Share Data:                              
   Earnings (loss) per common share:                              
       Basic operating earnings (loss)   $ 3.61   $ (6.36 )   $ 8.01     $ (2.99 )
       Net realized investment gains, net of tax     0.39     0.88       0.46       2.20  
     
   
   
   
       Basic net income (loss)   $ 4.00   $ (5.48 )   $ 8.47     $ (0.79 )
     
   
   
   
       Weighted average number of common shares                              
             outstanding     56,811.7     54,278.9       56,769.9       54,673.2  
                               
       Diluted operating earnings (loss)   $ 3.55   $ (6.36 )   $ 7.88     $ (2.99 )
       Net realized investment gains, net of tax     0.38     0.88       0.45       2.20  
     
   
   
   
       Diluted net income (loss)   $ 3.93   $ (5.48 )   $ 8.33     $ (0.79 )
     
   
   
   
       Weighted average number of common and                              
             common share equivalents outstanding     57,800.6     54,278.9       57,686.1       54,673.2  

7





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

      September 30,     December 31,  
      2006     2005  
               
Assets              
   Investments:              
   Fixed maturities, at fair value              
     (amortized cost: 2006, $7,806,193; 2005, $6,682,243)   $ 7,802,750   $ 6,686,822  
   Short-term investments, at fair value              
     (amortized cost: 2006, $106,488; 2005, $231,442)     106,354     230,933  
   Equities, at fair value              
     (cost: 2006, $1,071,662; 2005, $1,246,192)     1,142,658     1,334,374  
   Trading securities, at fair value (cost: 2006, $212,356; 2005, $210,432)     217,718     220,311  
   Other invested assets     123,568     104,920  
     
   
   Total investments     9,393,048     8,577,360  
   Cash and cash equivalents, at fair value, which approximates amortized cost     913,921     1,001,378  
   Accrued investment income     135,615     143,548  
   Reinsurance balances receivable     1,707,925     1,493,507  
   Reinsurance recoverable on paid and unpaid losses     200,391     217,948  
   Funds held by reinsured companies     991,158     970,614  
   Deferred acquisition costs     554,426     437,741  
   Deposit assets     303,536     289,459  
   Net tax assets     45,220     87,667  
   Goodwill     429,519     429,519  
   Other     81,171     95,389  
     
   
Total assets   $ 14,755,930   $ 13,744,130  
     
   
               
Liabilities              
   Unpaid losses and loss expenses   $ 6,799,535   $ 6,737,661  
   Policy benefits for life and annuity contracts     1,347,027     1,223,871  
   Unearned premiums     1,486,107     1,136,233  
   Reinsurance balances payable     112,928     127,607  
   Ceded premiums payable     32,050     25,110  
   Funds held under reinsurance treaties     13,633     18,910  
   Deposit liabilities     348,972     333,820  
   Long-term debt     620,000     620,000  
   Net payable for securities purchased     89,703     93,318  
   Accounts payable, accrued expenses and other     154,632     128,627  
   Debt related to trust preferred securities     206,186     206,186  
     
   
Total liabilities     11,210,773     10,651,343  
     
   
               
Shareholders’ Equity              
   Common shares (par value $1.00, issued and outstanding:              
         2006, 56,830,493; 2005, 56,730,195)     56,830     56,730  
   Series C cumulative preferred shares (par value $1.00, issued and outstanding:              
         2006 and 2005, 11,600,000; aggregate liquidation preference: 2006 and 2005, $290,000,000)     11,600     11,600  
   Series D cumulative preferred shares (par value $1.00, issued and outstanding:              
         2006 and 2005, 9,200,000; aggregate liquidation preference: 2006 and 2005, $230,000,000)     9,200     9,200  
   Additional paid-in capital     1,398,136     1,373,992  
   Deferred compensation     -     (107 )
   Accumulated other comprehensive income:              
       Net unrealized gains on investments, net of tax     46,179     77,049  
       Currency translation adjustment     58,868     12,614  
   Retained earnings     1,964,344     1,551,709  
     
   
Total shareholders' equity     3,545,157     3,092,787  
     
   
               
Total liabilities and shareholders' equity   $ 14,755,930   $ 13,744,130  
     
   
               
Shareholders’ Equity Per Common Share   $ 53.23   $ 45.35  
     
   
               
Diluted Book Value Per Common and Common Share Equivalents              
   Outstanding (assuming exercise of all stock-based awards)   $ 52.32   $ 44.57  
     
   
               
Number of Common and Common Share Equivalents Outstanding     57,819.3     57,724.1  
     
   

8





PartnerRe Ltd.
Supplementary Information
(in millions of U.S. dollars)
(Unaudited)
SEGMENT INFORMATION
For the three months ended September 30, 2006

      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   $ 194     $ 154     $ 346      $ 694     $ 4     $ 115     $ -     $ 813  
                                                                 
Net premiums written   $ 194     $ 154     $ 346      $ 694     $ 4     $ 110     $ -     $ 808  
Decrease in unearned premiums     25       48       84       157       4       5       -       166  
     
   
   
   
   
   
   
   
Net premiums earned   $ 219     $ 202     $ 430      $ 851     $ 8     $ 115     $ -     $ 974  
Losses and loss expenses and                                                                
   life policy benefits     (153 )     (138 )     (153 )     (444 )     (4 )     (93 )     -       (541 )
Acquisition costs     (54 )     (55 )     (87 )     (196 )     (1 )     (24 )     -       (221 )
     
   
   
   
   
   
   
   
Technical result   $ 12      $ 9     $ 190        $ 211     $ 3     $ (2 )   $ -     $ 212  
                                                                 
Other income     n/a       n/a       n/a       -       8       -       -       8  
Other operating expenses     n/a       n/a       n/a       (52 )     (5 )     (8 )     (16 )     (81 )
     
   
   
   
   
   
   
   
Underwriting result     n/a       n/a       n/a      $ 159     $ 6     $ (10 )     n/a     $ 139  
                                                                 
Net investment income     n/a       n/a       n/a       n/a       -       13       102       115  
     
   
   
   
   
   
   
   
Allocated underwriting result (1)     n/a       n/a       n/a       n/a       n/a     $ 3       n/a       n/a  
                                                                 
Net realized investment gains     n/a       n/a       n/a       n/a       n/a       n/a       23       23  
Interest expense     n/a       n/a       n/a       n/a       n/a       n/a       (13 )     (13 )
Net foreign exchange losses     n/a       n/a       n/a       n/a       n/a       n/a       (6 )     (6 )
Income tax expense     n/a       n/a       n/a       n/a       n/a       n/a       (25 )     (25 )
Interest in earnings of equity investments     n/a       n/a       n/a       n/a       3       n/a       n/a       3  
     
   
   
   
   
   
   
   
Net income     n/a       n/a       n/a       n/a       n/a       n/a       n/a     $ 236  
     
   
   
   
   
   
   
   
                                                                 
Loss ratio (2)     69.8   %   68.4   %   35.5   %   52.1   %                              
Acquisition ratio (3)     24.7       27.1       20.3       23.1                                  
     
   
   
   
                       
Technical ratio (4)     94.5   %   95.5   %   55.8   %   75.2   %                              
Other operating expense ratio (5)                             6.2                                  
                       
                       
Combined ratio (6)                             81.4   %                              
                       
                       
                                                                 
                                                                 
For the three months ended September 30, 2005
                                                                 
      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   $ 187     $ 137     $ 343      $ 667     $ 8     $ 105     $ -     $ 780  
                                                                 
Net premiums written   $ 187     $ 137     $ 336      $ 660     $ 8     $ 103     $ -     $ 771  
Decrease in unearned premiums     13       54       70       137       2       5       -       144  
     
   
   
   
   
   
   
   
Net premiums earned   $ 200     $ 191     $ 406      $ 797     $ 10     $ 108     $ -     $ 915  
Losses and loss expenses and                                                                
   life policy benefits     (263 )     (120 )     (633 )     (1,016 )     (13 )     (82 )     -       (1,111 )
Acquisition costs     (48 )     (48 )     (92 )     (188 )     (1 )     (30 )     -       (219 )
     
   
   
   
   
   
   
   
Technical result   $ (111 )    $ 23     $ (319 )      $ (407 )   $ (4 )   $ (4 )   $ -     $ (415 )
                                                                 
Other income     n/a       n/a       n/a       -       9       -       -       9  
Other operating expenses     n/a       n/a       n/a       (42 )     (3 )     (6 )     (13 )     (64 )
     
   
   
   
   
   
   
   
Underwriting result     n/a       n/a       n/a      $ (449 )   $ 2     $ (10 )     n/a     $ (470 )
                                                                 
Net investment income     n/a       n/a       n/a       n/a       -       13       80       93  
     
   
   
   
   
   
   
   
Allocated underwriting result (1)     n/a       n/a       n/a       n/a       n/a     $ 3       n/a       n/a  
                                                                 
Net realized investment gains     n/a       n/a       n/a       n/a       n/a       n/a       56       56  
Interest expense     n/a       n/a       n/a       n/a       n/a       n/a       (7 )     (7 )
Net foreign exchange losses     n/a       n/a       n/a       n/a       n/a       n/a       (2 )     (2 )
Income tax benefit     n/a       n/a       n/a       n/a       n/a       n/a       39       39  
Interest in earnings of equity investments     n/a       n/a       n/a       n/a       2       n/a       n/a       2  
     
   
   
   
   
   
   
   
Net loss     n/a       n/a       n/a       n/a       n/a       n/a       n/a     $ (289 )
     
   
   
   
   
   
   
   
                                                                 
Loss ratio (2)     131.5   %   62.6   %   155.8   %   127.5   %                              
Acquisition ratio (3)     24.0       25.5       22.6       23.6                                  
     
   
   
   
                       
Technical ratio (4)     155.5   %   88.1   %   178.4   %   151.1   %                              
Other operating expense ratio (5)                             5.2                                  
                       
                       
Combined ratio (6)                             156.3   %                              
                       
                       

(A) The Company reports the results of Channel Re on a one-quarter lag. The 2006 and 2005 periods include the Company's share of Channel Re's net income in the amount of $3.1 million and $2.0 million, respectively.

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

9





PartnerRe Ltd.
Supplementary Information
(in millions of U.S. dollars)
(Unaudited)
SEGMENT INFORMATION
For the nine months ended September 30, 2006

      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   $ 659     $ 647     $ 1,304      $ 2,610     $ 30     $ 364     $ -     $ 3,004  
                                                                 
Net premiums written   $ 659     $ 645     $ 1,283      $ 2,587     $ 30     $ 351     $ -     $ 2,968  
Increase in unearned premiums     (36 )     (79 )     (171 )     (286 )     (8 )     (9 )     -       (303 )
     
   
   
   
   
   
   
   
Net premiums earned   $ 623     $ 566     $ 1,112      $ 2,301     $ 22     $ 342     $ -     $ 2,665  
Losses and loss expenses and                                                                
   life policy benefits     (466 )     (370 )     (472 )     (1,308 )     (11 )     (262 )     -       (1,581 )
Acquisition costs     (153 )     (153 )     (221 )     (527 )     (3 )     (89 )     -       (619 )
     
   
   
   
   
   
   
   
Technical result   $ 4      $ 43      $ 419     $ 466     $ 8     $ (9 )   $ -     $ 465  
                                                                 
Other income     n/a       n/a       n/a       -       28       -       -       28  
Other operating expenses     n/a       n/a       n/a       (149 )     (13 )     (22 )     (47 )     (231 )
     
   
   
   
   
   
   
   
Underwriting result     n/a       n/a       n/a      $ 317     $ 23     $ (31 )     n/a     $ 262  
                                                                 
Net investment income     n/a       n/a       n/a       n/a       -       37       286       323  
     
   
   
   
   
   
   
   
Allocated underwriting result (1)     n/a       n/a       n/a       n/a       n/a     $ 6       n/a       n/a  
                                                                 
Net realized investment gains     n/a       n/a       n/a       n/a       n/a       n/a       19       19  
Interest expense     n/a       n/a       n/a       n/a       n/a       n/a       (39 )     (39 )
Net foreign exchange losses     n/a       n/a       n/a       n/a       n/a       n/a       (13 )     (13 )
Income tax expense     n/a       n/a       n/a       n/a       n/a       n/a       (53 )     (53 )
Interest in earnings of equity investments     n/a       n/a       n/a       n/a       8       n/a       n/a       8  
     
   
   
   
   
   
   
   
Net income     n/a       n/a       n/a       n/a       n/a       n/a       n/a     $ 507  
     
   
   
   
   
   
   
   
                                                                 
Loss ratio (2)     74.7   %   65.4   %   42.4   %   56.8   %                              
Acquisition ratio (3)     24.6       27.0       19.9       22.9                                  
     
   
   
   
                       
Technical ratio (4)     99.3   %   92.4   %   62.3   %   79.7   %                              
Other operating expense ratio (5)                             6.5                                  
                       
                       
Combined ratio (6)                             86.2   %                              
                       
                       
                                                                 
                                                                 
For the nine months ended September 30, 2005
                                                                 
      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   $ 649     $ 726     $ 1,262      $ 2,637     $ 21     $ 336     $ -     $ 2,994  
                                                                 
Net premiums written   $ 649     $ 724     $ 1,231      $ 2,604     $ 21     $ 325     $ -     $ 2,950  
Increase in unearned premiums     (25 )     (77 )     (145 )     (247 )     (5 )     (6 )     -       (258 )
     
   
   
   
   
   
   
   
Net premiums earned   $ 624     $ 647     $ 1,086      $ 2,357     $ 16     $ 319     $ -     $ 2,692  
Losses and loss expenses and                                                                
   life policy benefits     (568 )     (427 )     (1,018 )     (2,013 )     (14 )     (244 )     -       (2,271 )
Acquisition costs     (150 )     (162 )     (233 )     (545 )     (2 )     (86 )     -       (633 )
     
   
   
   
   
   
   
   
Technical result   $ (94 )    $ 58      $ (165 )   $ (201 )   $ -     $ (11 )   $ -     $ (212 )
                                                                 
Other income     n/a       n/a       n/a       -       20       -       -       20  
Other operating expenses     n/a       n/a       n/a       (143 )     (10 )     (18 )     (40 )     (211 )
     
   
   
   
   
   
   
   
Underwriting result     n/a       n/a       n/a      $ (344 )   $ 10     $ (29 )     n/a     $ (403 )
                                                                 
Net investment income     n/a       n/a       n/a       n/a       -       38       232       270  
     
   
   
   
   
   
   
   
Allocated underwriting result (1)     n/a       n/a       n/a       n/a       n/a     $ 9       n/a       n/a  
                                                                 
Net realized investment gains     n/a       n/a       n/a       n/a       n/a       n/a       149       149  
Interest expense     n/a       n/a       n/a       n/a       n/a       n/a       (22 )     (22 )
Net foreign exchange losses     n/a       n/a       n/a       n/a       n/a       n/a       (3 )     (3 )
Income tax expense     n/a       n/a       n/a       n/a       n/a       n/a       (15 )     (15 )
Interest in earnings of equity investments     n/a       n/a       n/a       n/a       7       n/a       n/a       7  
     
   
   
   
   
   
   
   
Net loss     n/a       n/a       n/a       n/a       n/a       n/a       n/a     $ (17 )
     
   
   
   
   
   
   
   
                                                                 
Loss ratio (2)     91.0   %   66.0   %   93.7   %   85.4   %                              
Acquisition ratio (3)     24.0       25.0       21.5       23.1                                  
     
   
   
   
                       
Technical ratio (4)     115.0   %   91.0   %   115.2   %   108.5   %                              
Other operating expense ratio (5)                             6.1                                  
                       
                       
Combined ratio (6)                             114.6   %                              
                       
                       

(A) The Company reports the results of Channel Re on a one-quarter lag. The 2006 and 2005 periods include the Company's share of Channel Re's net income in the amount of $8.2 million and $6.8 million, respectively.

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

10





PartnerRe Ltd.
Supplementary Information
(Unaudited)

    For the three   For the three   For the nine   For the nine
    months ended   months ended   months ended   months ended
    September 30,   September 30,   September 30,   September 30,
    2006   2005   2006   2005
                         
Distribution of Net Premiums Written by                        
Line of Business:                        
                                     Non-Life                        
                                          Property and Casualty                        
                                                Property   19   %   16   %   19   %   19   %
                                                Casualty   18     18     18     19  
                                               Motor   6     8     7     9  
                                          Worldwide Specialty                        
                                               Agriculture   5     3     4     3  
                                               Aviation/Space   7     8     5     6  
                                               Catastrophe   8     11     14     12  
                                               Credit/Surety   6     8     5     6  
                                               Engineering   6     6     5     4  
                                               Energy   3     1     2     1  
                                               Marine   3     3     3     3  
                                               Specialty property   2     1     2     2  
                                               Specialty casualty   3     3     3     4  
                                     ART   1     1     1     1  
                                     Life   13     13     12     11  
                         
                         
Geographic Distribution of Gross Premiums Written:                        
                                               North America   43   %   45   %   43   %   40   %
                                               Europe   40     40     43     47  
                                               Asia, Australia and New Zealand   9     8     8     8  
                                               Latin America, Caribbean and Africa   8     7     6     5  

       
       
    As at  
    September 30,  
    2006  
       
Financial Strength Ratings:      
 Standard & Poor's   AA-  
 Moody's   Aa3  
 A.M. Best   A+  
 Fitch   AA  

      As at       As at  
      September 30,       December 31,  
      2006       2005  
      (in thousands of U.S. dollars)       (in thousands of U.S. dollars)  
Capital Structure:                        
 Long-term debt   $ 620,000   14   %   $ 620,000   16   %
 Trust preferred securities, aggregate liquidation(1)     200,000   5       200,000   5  
 6.75% Series C cumulative preferred shares, aggregate liquidation     290,000   7       290,000   7  
 6.5% Series D cumulative preferred shares, aggregate liquidation     230,000   5       230,000   6  
 Common shareholders' equity     3,025,157   69       2,572,787   66  
 
 
 Total Capital   $ 4,365,157   100   %   $ 3,912,787   100   %
 
 

(1) Neither the Trust that issued the securities nor PartnerRe Finance, which owns the Trust, meets the consolidation requirements of FIN 46(R). Accordingly, the Company shows the related intercompany debt of $206.2 million on its Consolidated Balance Sheets.

11





PartnerRe Ltd.
Supplementary Information
(Unaudited)

        As at   As at  
        September 30,   December 31,  
        2006   2005  
                   
Investment Portfolio:                  
 Credit Quality   AAA   69   %   65   %  
    AA   4     3    
    A   13     15    
    BBB   10     11    
    Below Investment Grade/Unrated   4     6    
                   
                   
 By Class   U.S. Government   21   %   8   %  
    U.S. Mortgage/Asset Backed   15     15    
    U.S. Corporates   20     20    
    Foreign Fixed Income   29     29    
    Equities and Equity Substitutes   13     16    
    Cash (net of pending transactions)   2     12    
                   
 Expected average duration       3.7   Yrs   3.3   Yrs  
                   
 Average yield to maturity at market       4.8   %   4.5   %  
 (fixed income securities and cash)                  
                   
 Average Credit Quality       AA     AA    

      For the three       For the three       For the nine       For the nine  
      months ended       months ended       months ended       months ended  
      September 30,       September 30,       September 30,       September 30,  
      2006       2005       2006       2005  
      (in thousands of U.S. dollars except per share data)  
                                 
Reconciliation of GAAP and non-GAAP measures:                                
                                 
Annualized return on beginning common shareholders' equity                                
calculated with net income (loss) available to common shareholders     35.3   %     (42.0 ) %     24.9   %     (2.0 ) %
Less:                                
   Net realized investment gains, net of tax     3.4       6.8       1.3       5.7  
     
   
   
     
Annualized operating return on beginning common shareholders' equity     31.9   %     (48.8 ) %     23.6   %     (7.7 ) %
     
   
   
     
                                 
Net income (loss)   $ 235,841     $ (288,748 )   $ 506,614     $ (17,424 )
Less:                                
   Net realized investment gains, net of tax     22,158       47,797       25,991       120,001  
   Dividends to preferred shareholders     8,631       8,631       25,894       25,894  
     
   
   
     
Operating earnings (loss) available to common shareholders   $ 205,052     $ (345,176 )   $ 454,729     $ (163,319 )
     
   
   
     
                                 
Per diluted share:                                
Net income (loss)   $ 3.93     $ (5.48 )   $ 8.33     $ (0.79 )
Less:                                
   Net realized investment gains, net of tax     0.38       0.88       0.45       2.20  
     
   
   
     
Diluted operating earnings (loss)   $ 3.55     $ (6.36 )   $ 7.88     $ (2.99 )
     
   
   
     

12





PartnerRe Ltd.
Supplementary Information
(in thousands of U.S. dollars except share and per share data)
(Unaudited)

      As at       As at
      September 30,       December 31,
      2006       2005
               
Reconciliation of GAAP and non-GAAP measures:              
               
Shareholders' equity   $ 3,545,157     $ 3,092,787
Less:              
 6.75% Series C cumulative preferred shares, aggregate liquidation     290,000       290,000
 6.5% Series D cumulative preferred shares, aggregate liquidation     230,000       230,000
     
   
               
Common shareholders' equity   $ 3,025,157     $ 2,572,787
               
Less:              
 Net unrealized (losses) gains on fixed              
   income securities, net of tax     (6,402 )     4,382
     
   
               
Book value excluding net unrealized gains or losses              
 on fixed income securities   $ 3,031,559     $ 2,568,405
     
   
               
Divided by:              
Number of common and common share equivalents outstanding     57,819.3       57,724.1
               
Equals:              
Diluted book value per common and common share equivalents              
 outstanding excluding net unrealized gains or losses on              
 fixed income securities   $ 52.43     $ 44.49
     
   

 


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