EX-99.1 2 dp07288_ex9901.htm
Exhibit 99.1
 
News Release
 
PartnerRe Ltd. Reports Record Third Quarter and Nine-Month 2007 Results

·
Third Quarter Net Income per Share of $4.44; Operating Earnings per Share of $4.78
·
Third Quarter Annualized Net Income ROE of 31%; Annualized Operating ROE of 34%
·
Nine Month Net Income per Share of $8.83; Operating Earnings per Share of $9.76
·
Nine Month Annualized Net Income ROE of 21%; Annualized Operating ROE of 23%
·
Book Value per Share of $65.07, an increase of 16% year-to-date for 2007

PEMBROKE, Bermuda, October 22, 2007 -- PartnerRe Ltd. (NYSE:PRE) today reported net income of $262.9 million, or $4.44 per share on a fully diluted basis, for the third quarter of 2007. This net income includes a net charge of $19.9 million or $0.34 per share in net after-tax realized gains on investments, and losses from the Company’s interest in the results of equity investments. Net income for the third quarter of 2006 was $235.8 million or $3.93 per share, including net after-tax realized gains on investments, and earnings from the Company’s interest in the results of equity investments totaling $25.4 million or $0.44 per share. Operating earnings for the third quarter of 2007 were $274.2 million or $4.78 per share on a fully diluted basis. This compares to operating earnings of $201.8 million, or $3.49 per share, for the third quarter of 2006. Operating earnings exclude net after-tax realized investment gains/losses, and interest in earnings/losses of equity investments, and are calculated after payment of preferred dividends. All references to per share amounts are on a fully diluted basis.

Commenting on the third quarter and nine month 2007 results, PartnerRe President & Chief Executive Officer Patrick Thiele said, “PartnerRe’s third quarter results set new records in several metrics including earned premium, operating earnings, and earnings per share. A continuing low level of incurred losses combined with a seasonally high level of earned premium resulted in an annualized operating return on beginning shareholders’ equity of 34% and 10% growth in GAAP book value per share in the quarter. For the nine months, we achieved a 23% annualized operating return on beginning shareholders’ equity and 16% growth in GAAP book value per share.”

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
 
2007
2006
2007
2006
Net Premiums Written
$873,474
$807,788
$3,042,733
$2,968,285
Net Premiums Earned
$1,056,395
$973,603
$2,787,713
$2,665,387
Non-life Combined Ratio
74.1%
81.4%
81.2%
86.2%
Net Income
$262,921
$235,841
$537,209
$506,614
Net Income per share (a)
$4.44
$3.93
$8.83
$8.33
Operating Earnings (a)
 $274,198
 $201,839
 $565,073
 $446,280
Operating Earnings per share (a)
$4.78
$3.49
$9.76
$7.74
 
 
PartnerRe Ltd.
Wellesley House South,
90 Pitts Bay Road,
Pembroke, Bermuda HM 08
Telephone +1 441 292 0888
Fax +1 441 292 6080
www.partnerre.com
 
 
 
News Release
 
(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. Operating earnings is defined as net income available to common shareholders excluding after-tax net realized gains/losses on investments and interest in earnings/losses of equity investments. Operating earnings per share is defined as operating earnings divided by the weighted average number of fully diluted shares outstanding for the period.

Net premiums written for the third quarter of 2007 were $873.5 million, an 8% increase from the third quarter of 2006. Total revenues for the quarter increased 7% as compared to the third quarter of 2006 to $1.2 billion, including $1.1 billion of net premiums earned, net investment income of $135.6 million, and net realized investment losses of $3.1 million.

For the first nine months of 2007, net premiums written were $3.0 billion, representing a 3% increase from the same period in 2006. Net income was $537.2 million or $8.83 per share. Net income for the period includes a net charge of $53.8 million or $0.93 per share in net after-tax realized losses on investments and losses from the Company’s interest in the results of equity investments. Operating earnings were $565.1 million, or $9.76 per share. Net income for the first nine months of 2006 was $506.6 million or $8.33 per share including net after-tax realized gains and earnings from the Company’s interest in the results of equity investments totaling $34.4 million, or $0.59 per share. Operating earnings for the same period in 2006 were $446.3 million or $7.74 per share. Total revenues for the first nine months of 2007 were $3.1 billion, including $2.8 billion of net premiums earned, net investment income of $385.5 million, and net realized investment losses of $56.0 million. Total revenues for the same period in 2006 were $3.0 billion.

During the third quarter of 2007, the Company repurchased 1,043,521 common shares at a total cost of approximately $74.4 million. To date this year, the Company has repurchased 2,116,621 common shares at a total cost of approximately $152.4 million. The Company has approximately 3.4 million common shares remaining under its current repurchase authorization.

Separately, the Company announced today that its Board of Directors declared a regular quarterly dividend of $0.43 per common share. The dividend will be payable on December 3, 2007, to common shareholders of record on November 23, 2007, with the stock trading ex-dividend commencing November 21, 2007.

Results by Segment

The Non-Life segment reported net premiums written of $726 million for the third quarter of 2007, up 5% as compared to the total Non-Life net premiums written for the third quarter of 2006. The increase was due partially to growth in U.S. casualty premiums, as well as currency impact on the Company’s non-U.S. portfolio. The combined ratio was 74.1% for the third quarter of 2007, compared to 81.4% for the same period in 2006. The Non-Life technical result was $284 million for the third quarter of 2007, compared to $211 million for the same period in 2006. For the first nine
 
PartnerRe Ltd.
Wellesley House South,
90 Pitts Bay Road,
Pembroke, Bermuda HM 08
Telephone +1 441 292 0888
Fax +1 441 292 6080
www.partnerre.com
 
 
2
 
News Release
 
months, Non-Life net premiums written were $2.6 billion, flat with the same period in 2006. The nine month technical result was $596 million, compared to $466 million for the same period in 2006. The combined ratio for the nine month period was 81.2% compared to 86.2% in 2006.

The U.S. Property and Casualty business, which represents approximately 26% of total net premiums written for the quarter, reported net premiums written of $228 million, up 18% over the prior year’s third quarter. Net premiums earned increased 2% to $223 million during the quarter when compared to the same period in 2006. The technical ratio for this sub-segment was 81.6%, compared to 94.5% in the third quarter of 2006. For the first nine months of 2007, net premiums written were $657 million, essentially flat with the first nine months of 2006. The nine-month technical ratio was 87.6%, compared to 99.3% in 2006. The technical result for the first nine months of 2007 was $75 million compared to $4 million for the 2006 period.

The Global (Non-U.S.) Property and Casualty business, which represents approximately 17% of total net premiums written for the quarter, reported net premiums written of $151 million for the third quarter of 2007, down 1% as compared to $154 million for the same period in 2006. Net premiums earned during the quarter were $192 million, down 5% from $202 million in the same period last year. The technical ratio for this sub-segment was 94.5% compared to 95.5% for the same period in 2006. For the nine months, net premiums written were down 5% to $611 million. The nine-month technical ratio for 2007 was 96.0%, compared to 92.4% in 2006. The technical result for the first nine months of 2007 was $22 million compared to $43 million in 2006.

The Worldwide Specialty business, which represents approximately 40% of total net premiums written for the quarter, reported net premiums written of $347 million for the third quarter, flat with the prior year quarter. Net premiums earned increased 13% to $486 million during the quarter. This sub-segment’s technical ratio was 52.2%, compared to 55.8% for the third quarter of 2006. For the nine month period, net premiums written were up 3% to $1.3 billion. The nine-month technical ratio was 58.5%, compared to 62.3% in 2006. The technical result for the first nine months of 2007 was $499 million compared to $419 million for the same period in 2006.

The Life segment, which markets coverages primarily in Europe, Canada and Latin America, and represents approximately 16% of total net premiums written for the quarter, reported net premiums written of $142 million for the quarter, up 29% over the prior year quarter. The Life segment reported a breakeven allocated underwriting result for the quarter, compared with a gain of $3 million in the comparable period in 2006. For the nine-month period, net premiums written increased 21% to $425 million, with an allocated underwriting result of $11 million, compared to $6 million for the comparable period in 2006.

The ART (Alternative Risk Transfer) segment comprises structured risk transfer, principal finance, weather related products, and strategic investments. Results for the third quarter and nine months of 2007 were impacted by a $25 million charge to reflect an anticipated third quarter loss at Channel Re, driven by unrealized mark-to-market adjustments in its credit derivative portfolio. The pre-tax contribution to net income, including the Company’s interest in the results of Channel Re, was a loss
 
PartnerRe Ltd.
Wellesley House South,
90 Pitts Bay Road,
Pembroke, Bermuda HM 08
Telephone +1 441 292 0888
Fax +1 441 292 6080
www.partnerre.com
 
 
3
 
News Release
 
of $21 million for the third quarter of 2007 compared to a gain of $9 million for the third quarter of 2006. For the first nine months of 2007, the pre-tax contribution to net income was a loss of $16 million compared to a gain of $31 million for the same period in 2006.

Balance Sheet Items

At September 30, 2007, total assets were $16.2 billion as compared to $14.9 billion at December 31, 2006. Total investments and cash were $11.5 billion. Over a trailing 12-month period, total investments and cash increased 12%. Gross Non-Life reserves were $7.1 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 $89 million. The overall third quarter prior year reserve development in the Non-Life segment includes net favorable development in all sub-segments with $18 million in the U.S. P&C sub-segment, $12 million in the Global (Non-U.S.) P&C sub-segment, and $59 million in the Worldwide Specialty sub-segment. In the third quarter of 2006, Non-Life reserves for prior years developed favorably by $73 million.

At September 30, 2007, total capitalization was $5.1 billion, and total shareholders’ equity was $4.2 billion. This compares to total capitalization of $4.7 billion, and total shareholders’ equity of $3.8 billion at December 31, 2006. Book value per common share at September 30, 2007 was $65.07 on a fully diluted basis, compared to $56.07 per share at December 31, 2006.

Commentary and Outlook

“Pricing in most segments of the non-life reinsurance market continues to weaken at a moderate rate but overall profitability remains at a satisfactory level due to the current low level of claims,” Mr. Thiele said. “We do see client behavior beginning to stabilize as regards the structure and the attachment points of their reinsurance programs, which should lead to a more orderly January 1 renewal in the U.S. and Europe. We also expect that the recent turmoil in the capital markets will present opportunities for PartnerRe’s ART and Investment areas, given our very strong and liquid balance sheet.”


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 impact of realized gains/losses from the sale of investments, which is driven by the timing of the disposition of investments, nor the interest in earnings/losses of equity investments, where the Company does not control the investee companies’ activities. The Company uses technical ratio and technical result as measures of underwriting performance. The technical ratio is defined as the sum of the loss and acquisition ratios. These metrics exclude other operating expenses. The Company also uses combined ratio to measure results for the Non-Life segment. The combined ratio is the sum of the technical and other operating expense
 
PartnerRe Ltd.
Wellesley House South,
90 Pitts Bay Road,
Pembroke, Bermuda HM 08
Telephone +1 441 292 0888
Fax +1 441 292 6080
www.partnerre.com
 
 
4
 
News Release
 
ratios. The Company uses total capital, which is defined as total shareholders’ equity, long-term debt and capital efficient notes, to manage the capital structure of the Company.
 
 
PartnerRe Ltd. is a leading global reinsurer, providing multi-line reinsurance to insurance companies. The Company through its wholly owned subsidiaries also offers alternative risk products that include weather and credit protection to financial, industrial and service companies.  Risks reinsured include property, casualty, motor, agriculture, aviation/space, catastrophe, credit/surety, engineering, energy, marine, specialty property, specialty casualty, other lines, life/annuity and health, and alternative risk products. For the year ended December 31, 2006, total revenues were $4.2 billion. As of September 30, 2007 total assets were $16.2 billion, total capital was $5.1 billion and total shareholders’ equity was $4.2 billion.

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/Jane Simmons
 
Media Contact: Celia Powell
  
 
PartnerRe Ltd.
Wellesley House South,
90 Pitts Bay Road,
Pembroke, Bermuda HM 08
Telephone +1 441 292 0888
Fax +1 441 292 6080
www.partnerre.com
 
 
5
 
 
 
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
   
September
   
September
   
September
 
   
30, 2007
    
30, 2006
    
30, 2007
    
30, 2006
  
                         
                         
                         
Revenues
                        
     Gross premiums written
    
$877,943
      
$813,449
      
$3,087,464
      
$3,003,905
  
                                 
     Net premiums written
    
$873,474
      
$807,788
      
$3,042,733
      
$2,968,285
  
     Decrease (increase) in unearned premiums
    
182,921
      
165,815
       (255,020 )     (302,898 )
     Net premiums earned
    
1,056,395
      
973,603
      
2,787,713
      
2,665,387
  
     Net investment income
    
135,577
      
115,110
      
385,488
      
323,382
  
     Net realized investment (losses) gains
     (3,103 )    
23,006
       (55,982 )    
19,176
  
     Other income (loss)
    
5,445
      
7,897
       (2,948 )    
28,357
  
     Total revenues
    
1,194,314
      
1,119,616
      
3,114,271
      
3,036,302
  
                                 
Expenses
                                
     Losses and loss expenses and life policy benefits
    
562,132
      
540,717
      
1,564,904
      
1,580,912
  
     Acquisition costs
    
215,456
      
220,691
      
622,493
      
619,373
  
     Other operating expenses
    
79,073
      
80,853
      
238,004
      
231,766
  
     Interest expense
    
13,649
      
13,671
      
40,643
      
39,592
  
     Net foreign exchange losses
    
3,567
      
6,141
      
17,121
      
13,603
  
     Total expenses
    
873,877
      
862,073
      
2,483,165
      
2,485,246
  
                                 
Income before taxes and interest in (losses) earnings of equity investments
    
320,437
      
257,543
      
631,106
      
551,056
  
     Income tax expense
    
34,825
      
24,915
      
77,445
      
52,891
  
     Interest in (losses) earnings of equity investments
     (22,691 )    
3,213
       (16,452 )    
8,449
  
Net income
    
$262,921
      
$235,841
      
$537,209
      
$506,614
  
                                 
Preferred dividends
    
$8,631
      
$8,631
      
$25,894
      
$25,894
  
                                 
Operating earnings available to common shareholders
    
$274,198
      
$201,839
      
$565,073
      
$446,280
  
                                 
Comprehensive income, net of tax
    
$387,271
      
$360,390
      
$654,795
      
$521,998
  
                                 
Per Share Data:
                                
     Earnings per common share:
                                
         Basic operating earnings
    
$4.90
      
$3.55
      
$10.00
      
$7.86
  
         Net realized investment gains (losses), net of tax
    
0.05
      
0.39
       (0.66 )    
0.46
  
         Interest in (losses) earnings of equity investments, net of tax
     (0.40 )    
0.06
       (0.29 )    
0.15
  
         Basic net income
    
$4.55
      
$4.00
      
$9.05
      
$8.47
  
                                 
         Weighted average number of common shares outstanding
    
55,906.6
      
56,811.7
      
56,512.7
      
56,769.9
  
                                 
                                 
         Diluted operating earnings
    
$4.78
      
$3.49
      
$9.76
      
$7.74
  
         Net realized investment gains (losses), net of tax
    
0.05
      
0.38
       (0.65 )    
0.45
  
         Interest in (losses) earnings of equity investments, net of tax
     (0.39 )    
0.06
       (0.28 )    
0.14
  
         Diluted net income
    
$4.44
      
$3.93
      
$8.83
      
$8.33
  
                                 
         Weighted average number of common and
                                
              common share equivalents outstanding
    
57,329.2
      
57,800.6
      
57,888.8
      
57,686.1
  
                                 
 
 
6
 
 
PartnerRe Ltd.
  
Consolidated Balance Sheets
  
(Expressed in thousands of U.S dollars, except share, per share and parenthetical share data)
  
 (Unaudited)
  
             
   
September
   
December
 
   
30, 2007
    
31, 2006
  
             
Assets
            
     Investments:
            
     Fixed maturities, at fair value
            
      (amortized cost: 2007, $8,964,146; 2006, $7,852,798)
    $
8,969,603
      $
7,835,680
  
     Short-term investments, at fair value
                
      (amortized cost: 2007, $122,266; 2006, $133,872)
    
122,416
      
133,751
  
     Equities, at fair value
                
      (cost: 2007, $1,224,397; 2006, $920,913)
    
1,324,198
      
1,015,144
  
     Trading securities, at fair value (cost: 2007, $135,733; 2006, $578,445)
    
140,520
      
599,972
  
     Other invested assets
    
138,437
      
105,390
  
     Total investments
    
10,695,174
      
9,689,937
  
     Cash and cash equivalents, at fair value, which approximates amortized cost
    
834,259
      
988,788
  
     Accrued investment income
    
147,399
      
157,923
  
     Reinsurance balances receivable
    
1,774,779
      
1,573,566
  
     Reinsurance recoverable on paid and unpaid losses
    
166,926
      
168,840
  
     Funds held by reinsured companies
    
1,097,801
      
1,002,402
  
     Deferred acquisition costs
    
660,831
      
542,698
  
     Deposit assets
    
366,657
      
306,212
  
     Net tax assets
    
-
      
17,826
  
     Goodwill
    
429,519
      
429,519
  
     Other assets
    
73,543
      
70,514
  
Total assets
    $
16,246,888
      $
14,948,225
  
                 
Liabilities
                
     Unpaid losses and loss expenses
    $
7,110,240
      $
6,870,785
  
     Policy benefits for life and annuity contracts
    
1,622,564
      
1,430,691
  
     Unearned premiums
    
1,535,611
      
1,215,624
  
     Reinsurance balances payable
    
194,438
      
115,897
  
     Ceded premiums payable
    
6,909
      
17,213
  
     Funds held under reinsurance treaties
    
30,651
      
21,257
  
     Deposit liabilities
    
403,210
      
350,763
  
     Net payable for securities purchased
    
45,827
      
90,331
  
     Net tax liabilities
    
34,521
      
-
  
     Accounts payable, accrued expenses and other
    
160,089
      
172,212
  
     Long-term debt
    
620,000
      
620,000
  
     Debt related to capital efficient notes
    
257,605
      
257,605
  
Total liabilities
    
12,021,665
      
11,162,378
  
                 
Shareholders’ Equity
                
     Common shares (par value $1.00, issued: 2007, 57,145,463; 2006, 57,076,312)
    
57,145
      
57,076
  
     Series C cumulative preferred shares (par value $1.00, issued and outstanding:
                
         2007 and 2006, 11,600,000; aggregate liquidation preference: 2007 and 2006, $290,000,000)
    
11,600
      
11,600
  
     Series D cumulative preferred shares (par value $1.00, issued and outstanding:
                
         2007 and 2006, 9,200,000; aggregate liquidation preference: 2007 and 2006, $230,000,000)
    
9,200
      
9,200
  
     Additional paid-in capital
    
1,424,601
      
1,413,977
  
     Accumulated other comprehensive income:
                
        Net unrealized gains on investments, net of tax
    
81,504
      
56,913
  
        Currency translation adjustment
    
162,033
      
68,734
  
        Unfunded pension obligation, net of tax
     (7,581 )     (7,277 )
     Retained earnings
    
2,605,325
      
2,175,624
  
     Common shares held in treasury, at cost (2007, 1,629,321 shares; 2006, nil)
     (118,604 )    
-
  
Total shareholders' equity
    
4,225,223
      
3,785,847
  
                 
Total liabilities and shareholders' equity
    $
16,246,888
      $
14,948,225
  
                 
Shareholders’ Equity Per Common Share (excluding cumulative
                
     preferred shares: 2007 and 2006, $520,000,000)
    $
66.74
      $
57.22
  
Diluted Book Value Per Common and Common Share Equivalents
                
     Outstanding (assuming exercise of all stock-based awards)
    $
65.07
      $
56.07
  
                 
Number of Common and Common Share Equivalents Outstanding
    
56,938.8
      
58,248.8
  
                 
 
7
 
PartnerRe Ltd.
Supplementary Information
(in millions of U.S. dollars)
(Unaudited)
 
SEGMENT INFORMATION
For the three months ended September 30, 2007

   
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
    $
228
        $
151
        $
349
      $
728
        $
5
      $
145
      $
-
      $
878
  
                                                                       
Net premiums written
    $
228
        $
151
        $
347
      $
726
        $
5
      $
142
      $
-
      $
873
  
(Increase) decrease in unearned premiums
     (5 )      
41
        
139
      
175
        
3
      
5
      
-
      
183
  
Net premiums earned
    $
223
        $
192
        $
486
      $
901
        $
8
      $
147
      $
-
      $
1,056
  
Losses and loss expenses and
                                                                      
   life policy benefits
     (125 )       (135 )       (165 )     (425 )       (4 )     (133 )    
-
       (562 )
Acquisition costs
     (57 )       (46 )       (89 )     (192 )       (1 )     (22 )    
-
       (215 )
Technical result
    $
41
        $
11
        $
232
      $
284
        $
3
      $ (8 )    $
-
      $
279
  
                                                                       
Other income
    
n/a
        
n/a
        
n/a
      
1
        
4
      
-
      
-
      
5
  
Other operating expenses
    
n/a
        
n/a
        
n/a
       (51 )       (5 )     (8 )     (15 )     (79 )
Underwriting result
    
n/a
        
n/a
        
n/a
      $
234
        $
2
      $ (16 )    
n/a
      $
205
  
                                                                       
Net investment income
    
n/a
        
n/a
        
n/a
      
-
        
-
      
16
      
120
      
136
  
Allocated underwriting result (1)
    
n/a
        
n/a
        
n/a
      
n/a
        $
2
      $
-
      
n/a
      
n/a
  
                                                                       
Net realized investment losses
    
n/a
        
n/a
        
n/a
      
n/a
        
n/a
      
n/a
       (3 )     (3 )
Interest expense
    
n/a
        
n/a
        
n/a
      
n/a
        
n/a
      
n/a
       (14 )     (14 )
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
       (35 )     (35 )
Interest in losses of equity investments
    
n/a
        
n/a
        
n/a
      
n/a
         (23 )    
n/a
      
n/a
       (23 )
Net income
    
n/a
        
n/a
        
n/a
      
n/a
        
n/a
      
n/a
      
n/a
      $
263
  
                                                                       
Loss ratio (2)
    
56.2
 %
 
    
70.3
%
 
    
33.8
%
 
  
47.1
 %
 
                                
Acquisition ratio (3)
    
25.4
        
24.2
        
18.4
      
21.4
                                    
Technical ratio (4)
    
81.6
 %
 
    
94.5
%
 
    
52.2
%
 
  
68.5
%
 
                                
Other operating expense ratio (5)
                                
5.6
                                    
Combined ratio (6)
                                
74.1
%
 
                                
                                                                       

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
        
-
      
-
      
13
      
102
      
115
  
Allocated underwriting result (1)
    
n/a
        
n/a
        
n/a
        
n/a
      
$6
      
$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
%
 
                              
                                                                       

(A) The Company reports the results of Channel Re on a one-quarter lag.  The 2007 and 2006 periods include the Company's share of Channel Re's net (loss) income in the amount of $(22.7) million and $3.1 million, respectively.

(1) Allocated underwriting result is defined as net premiums earned, other income or loss and allocated net investment income less losses and loss expenses and 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 defined as the sum of the technical ratio and the other operating expense ratio.         
 
8
 
 
PartnerRe Ltd.
Supplementary Information
(in millions of U.S. dollars)
(Unaudited)
 
SEGMENT INFORMATION
For the nine months ended September 30, 2007

   
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
   $
657
       $
613
       $
1,348
       $
2,618
       $
24
     $
445
     $
-
     $
3,087
  
                                                                         
Net premiums written
   $
657
       $
611
       $
1,326
       $
2,594
       $
24
     $
425
     $
-
     $
3,043
  
Increase in unearned premiums
     (51 )       (69 )       (126 )       (246 )       (4 )     (5 )    
-
       (255 )
Net premiums earned
   $
606
       $
542
       $
1,200
       $
2,348
       $
20
     $
420
     $
-
     $
2,788
  
Losses and loss expenses and
                                                                        
   life policy benefits
     (377 )       (384 )       (454 )       (1,215 )       (4 )     (346 )    
-
       (1,565 )
Acquisition costs
     (154 )       (136 )       (247 )       (537 )       (2 )     (83 )    
-
       (622 )
Technical result
   $
75
       $
22
       $
499
       $
596
       $
14
     $ (9 )   $
-
     $
601
  
                                                                         
Other income (loss)
    
n/a
        
n/a
        
n/a
        
1
         (4 )    
-
      
-
       (3 )
Other operating expenses
    
n/a
        
n/a
        
n/a
         (153 )       (11 )     (23 )     (51 )     (238 )
Underwriting result
    
n/a
        
n/a
        
n/a
       $
444
       $ (1 )   $ (32 )    
n/a
     $
360
  
                                                                         
Net investment income
    
n/a
        
n/a
        
n/a
        
-
        
1
      
43
      
341
      
385
  
Allocated underwriting result (1)
    
n/a
        
n/a
        
n/a
        
n/a
       $
-
     $
11
      
n/a
      
n/a
  
                                                                         
Net realized investment losses
    
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
       (41 )     (41 )
Net foreign exchange losses
    
n/a
        
n/a
        
n/a
        
n/a
        
n/a
      
n/a
       (17 )     (17 )
Income tax expense
    
n/a
        
n/a
        
n/a
        
n/a
        
n/a
      
n/a
       (78 )     (78 )
Interest in losses of equity investments
    
n/a
        
n/a
        
n/a
        
n/a
         (16 )    
n/a
      
n/a
       (16 )
Net income
    
n/a
        
n/a
        
n/a
        
n/a
        
n/a
      
n/a
      
n/a
     $
537
  
                                                                         
Loss ratio (2)
    
62.2
  
%
 
    
70.8
  
%
      
37.9
  
%
      
51.8
  
%
 
                                
Acquisition ratio (3)
    
25.4
        
25.2
        
20.6
        
22.9
                                    
Technical ratio (4)
    
87.6
  
%
 
    
96.0
  
%
      
58.5
  
%
 
    
74.7
  
%
 
                                
Other operating expense ratio (5)
                                  
6.5
                                    
Combined ratio (6)
                                  
81.2
  
%
 
                                
                                                                         
  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
        
-
        
-
      
37
      
286
      
323
  
Allocated underwriting result (1)
    
n/a
        
n/a
        
n/a
        
n/a
       $
23
     $
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
  
%
                                  
                                                                         
(A) The Company reports the results of Channel Re on a one-quarter lag.  The 2007 and 2006 periods include the Company's share of Channel Re's net (loss) income in the amount of $(16.6) million and $8.2 million, respectively.
 
(1) Allocated underwriting result is defined as net premiums earned, other income or loss and allocated net investment income less losses and loss expenses and 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 defined as the sum of the technical ratio and the other operating expense ratio.
 
9
 
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,
  
       
2007
    
2006
    
2007
    
2006
  
                             
Distribution of Net Premiums Written by
                        
Line of Business:
                            
 
Non-Life
                        
   
Property and Casualty
                        
   
  Property
     18 %     19 %     19 %     19 %
   
  Casualty
    
20
      
18
      
17
      
18
  
   
  Motor
    
5
      
6
      
6
      
7
  
   
Worldwide Specialty
                                
   
  Agriculture
    
5
      
5
      
4
      
4
  
   
  Aviation/Space
    
5
      
7
      
4
      
5
  
   
  Catastrophe
    
6
      
8
      
13
      
14
  
   
  Credit/Surety
    
8
      
6
      
6
      
5
  
   
  Engineering
    
6
      
6
      
5
      
5
  
   
  Energy
    
2
      
3
      
2
      
2
  
   
  Marine
    
4
      
3
      
3
      
3
  
   
  Specialty property
    
2
      
2
      
2
      
2
  
   
  Specialty casualty
    
2
      
3
      
4
      
3
  
 
ART
      
1
      
1
      
1
      
1
  
 
Life
      
16
      
13
      
14
      
12
  
          100 %     100 %     100 %     100 %
                                     
Distribution of Gross Premiums Written by
                                
Geography:
                                    
   
  North America
     44 %     43 %     42 %     43 %
   
  Europe
    
40
      
40
      
45
      
43
  
   
  Asia, Australia and New Zealand
    
6
      
9
      
6
      
8
  
   
  Latin America, Caribbean and Africa
    
10
      
8
      
7
      
6
  
          100 %     100 %     100 %     100 %
                                     
                                     
       
As at
                          
       
September 30,
                          
       
2007
                          
                                     
Financial Strength Ratings:
                                    
  Standard & Poor's
      
AA-
                          
  Moody's
      
Aa3
                          
  A.M. Best
      
A+
                          
  Fitch
      
AA
                          

   
As at
    
As at
  
   
September 30,
    
December 31,
  
   
2007
  
2006
  
   
(in thousands of U.S. dollars)
    
(in thousands of U.S. dollars)
  
Capital Structure:
                        
  Long-term debt
   $
620,000
       12 %   $
620,000
       13 %
  Capital efficient notes(1)
    
250,000
      
5
      
250,000
      
6
  
  6.75% Series C cumulative preferred shares, aggregate liquidation
    
290,000
      
6
      
290,000
      
6
  
  6.5% Series D cumulative preferred shares, aggregate liquidation
    
230,000
      
4
      
230,000
      
5
  
  Common shareholders' equity
    
3,705,223
      
73
      
3,265,847
      
70
  
  Total Capital
   $
5,095,223
       100 %   $
4,655,847
       100 %
                                 
 
(1)  PartnerRe Finance II, the issuer of the capital efficient notes, does not meet the consolidation requirements of FIN 46(R).
Accordingly, the Company shows the related intercompany debt of $257.6 million on its Consolidated Balance Sheets.
 
10
 
PartnerRe Ltd.
Supplementary Information
(Unaudited)

               
     
As at
    
As at
  
     
September 30,
    
December 31,
  
     
2007
    
2006
  
               
Investment Portfolio:
              
  Credit Quality
AAA
    
69
%
    
69
%
 
AA
    
5
      
4
  
 
A
    
12
      
13
  
 
BBB
    
11
      
10
  
 
Below Investment Grade/Unrated
    
3
      
4
  
       
100
%
    
100
%
                   
                   
  By Class
U.S. Government
    
13
%
    
12
%
 
U.S. Mortgage/Asset Backed
    
15
      
16
  
 
U.S. Corporates
    
19
      
20
  
 
Foreign Fixed Income
    
33
      
29
  
 
Equities and Equity Substitutes
    
13
      
14
  
 
Cash (net of pending transactions)
    
7
      
9
  
       
100
%
    
100
%
                   
                   
  Expected average duration
      
4.0
Yrs
    
4.1
Yrs
                   
  Average yield to maturity at market
    
5.0
%
    
4.9
%
  (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,
  
   
2007
    
2006
    
2007
    
2006
  
   
 (in thousands of U.S. dollars except per share data)
Reconciliation of GAAP and non-GAAP measures:
                        
                         
Annualized return on beginning common shareholders' equity (1)
                        
calculated with net income available to common shareholders
    
31.1
%
    
35.3
 %    
20.9
 %     24.9 %
Less:
                                
     Annualized net realized investment gains (losses), net of tax, on beginning
                                
      common shareholders' equity (1)
    
0.3
      
3.4
       (1.5 )    
1.3
  
     Interest in (losses) earnings of equity investments, net of tax,  on beginning common shareholders' equity (1)
     (2.8 )    
0.5
       (0.7 )    
0.5
  
Annualized operating return on beginning common shareholders' equity(1)
    
33.6
%
    
31.4
 %    
23.1
 %     23.1 %
                                 
Net income
   $
262,921
     $
235,841
     $
537,209
     $
506,614
  
Less:
                                
     Net realized investment gains (losses), net of tax
    
2,783
      
22,158
       (37,306 )    
25,991
  
     Interest in (losses) earnings of equity investments, net of tax
     (22,691 )    
3,213
       (16,452 )    
8,449
  
     Dividends to preferred shareholders
    
8,631
      
8,631
      
25,894
      
25,894
  
Operating earnings available to common shareholders
   $
274,198
     $
201,839
     $
565,073
     $
446,280
  
                                 
Per diluted share:
                                
Net income
   $
4.44
     $
3.93
     $
8.83
     $
8.33
  
Less:
                                
     Net realized investment gains (losses), net of tax
    
0.05
      
0.38
       (0.65 )    
0.45
  
     Interest in (losses) earnings of equity investments, net of tax
     (0.39 )    
0.06
       (0.28 )    
0.14
  
Operating earnings
   $
4.78
     $
3.49
     $
9.76
     $
7.74
  
                                 
(1) Excluding cumulative preferred shares: 2007 and 2006, $520,000
                                
 
11
 
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,
  
   
2007
    
2006
  
             
Reconciliation of GAAP and non-GAAP measures:
            
             
Shareholders' equity
   $
4,225,223
     $
3,785,847
  
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
   $
3,705,223
     $
3,265,847
  
                 
Less:
                
  Net unrealized gains (losses) on fixed income securities, net of tax
    
1,728
       (18,694 )
                 
                 
Book value excluding net unrealized gains (losses) on fixed income securities
   $
3,703,495
     $
3,284,541
  
                 
Divided by:
                
Number of common and common share equivalents outstanding
    
56,938.8
      
58,248.8
  
                 
Equals:
                
Diluted book value per common and common share equivalents
                
  outstanding excluding net unrealized gains (losses) on fixed income securities
   $
65.04
     $
56.39
  
                 
 
12