10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2011

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             .

Commission file number 1-14536

PartnerRe Ltd.

(Exact name of registrant as specified in its charter)

Bermuda	Not Applicable
(State of incorporation)	(I.R.S. Employer Identification No.)

90 Pitts Bay Road, Pembroke, HM08, Bermuda

(Address of principal executive offices) (Zip Code)

(441) 292-0888

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

The number of the registrant’s common shares (par value $1.00 per share) outstanding, net of treasury shares, as of August 1, 2011 was 67,739,564.

PartnerRe Ltd.

INDEX TO FORM 10-Q

		Page
PART I—FINANCIAL INFORMATION
ITEM 1.	Financial Statements
	Report of Independent Registered Public Accounting Firm		1
	Unaudited Condensed Consolidated Balance Sheets—June 30, 2011 and December 31, 2010		2
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)—Three Months and Six Months Ended June 30, 2011 and 2010		3
	Unaudited Condensed Consolidated Statements of Shareholders’ Equity—Six Months Ended June 30, 2011 and 2010		4
	Unaudited Condensed Consolidated Statements of Cash Flows—Six Months Ended June 30, 2011 and 2010		5
	Notes to Unaudited Condensed Consolidated Financial Statements		6
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		24
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk		68
ITEM 4.	Controls and Procedures		71
PART II—OTHER INFORMATION
ITEM 1.	Legal Proceedings		71
ITEM 1A.	Risk Factors		72
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds		72
ITEM 3.	Defaults upon Senior Securities		72
ITEM 4.	Reserved		72
ITEM 5.	Other Information		72
ITEM 6.	Exhibits		72
	Signatures		73
	Exhibit Index		74

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of PartnerRe Ltd.

We have reviewed the accompanying condensed consolidated balance sheet of PartnerRe Ltd. and subsidiaries (the “Company”) as of June 30, 2011, and the related condensed consolidated statements of operations and comprehensive income (loss) for the three-month and six-month periods ended June 30, 2011 and 2010, and of shareholders’ equity, and of cash flows for the six-month periods ended June 30, 2011 and 2010. These interim condensed consolidated financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such condensed consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of PartnerRe Ltd. and subsidiaries as of December 31, 2010 and the related consolidated statements of operations and comprehensive income, shareholders’ equity, and of cash flows for the year then ended (not presented herein); and in our report dated February 28, 2011, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2010 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ Deloitte & Touche Ltd.

Deloitte & Touche Ltd.

Hamilton, Bermuda

August 4, 2011

1

PartnerRe Ltd.

Unaudited Condensed Consolidated Balance Sheets

(Expressed in thousands of U.S. dollars, except parenthetical share and per share data)

	June 30, 2011			December 31, 2010
Assets
Investments:
Fixed maturities, trading securities, at fair value (amortized cost: 2011, $13,984,225; 2010, $12,394,797)	$	14,406,945		$	12,824,389
Short-term investments, trading securities, at fair value (amortized cost: 2011, $216,881; 2010, $49,132)		215,692			49,397
Equities, trading securities, at fair value (cost: 2011, $880,222; 2010, $942,745)		994,913			1,071,676
Other invested assets		338,373			352,405
Total investments		15,955,923			14,297,867
Funds held – directly managed (cost: 2011, $1,362,997; 2010, $1,751,276)		1,379,513			1,772,118
Cash and cash equivalents, at fair value, which approximates amortized cost		1,606,842			2,111,084
Accrued investment income		181,806			201,928
Reinsurance balances receivable		2,517,586			2,076,884
Reinsurance recoverable on paid and unpaid losses		489,415			382,878
Funds held by reinsured companies		846,466			937,032
Deferred acquisition costs		661,564			595,557
Deposit assets		233,187			256,702
Net tax assets		32,358			14,960
Goodwill		455,533			455,533
Intangible assets		154,194			178,715
Other assets		85,535			83,113
Total assets	$	24,599,922		$	23,364,371
Liabilities
Unpaid losses and loss expenses	$	12,016,271		$	10,666,604
Policy benefits for life and annuity contracts		1,726,180			1,750,410
Unearned premiums		2,067,996			1,599,139
Other reinsurance balances payable		554,386			491,194
Deposit liabilities		243,033			268,239
Net tax liabilities		325,285			316,325
Accounts payable, accrued expenses and other		213,738			244,552
Debt related to senior notes		750,000			750,000
Debt related to capital efficient notes		70,989			70,989
Total liabilities		17,967,878			16,157,452
Shareholders’ Equity
Common shares (par value $1.00; issued: 2011, 84,569,310 shares; 2010, 84,033,089 shares)		84,569			84,033
Preferred shares (par value $1.00; issued and outstanding: 2011, 35,750,000 shares; 2010, 20,800,000 shares; aggregate liquidation value: 2011, $893,750; 2010, $520,000)		35,750			20,800
Additional paid-in capital		3,792,057			3,419,864
Accumulated other comprehensive income:
Currency translation adjustment		60,185			16,101
Other accumulated comprehensive loss (net of tax of: 2011, $5,838; 2010, $4,872)		(14,200	)		(12,045	)
Retained earnings		3,983,398			4,761,178
Common shares held in treasury, at cost (2011, 16,831,534 shares; 2010, 14,046,895 shares)		(1,309,715	)		(1,083,012	)
Total shareholders’ equity		6,632,044			7,206,919
Total liabilities and shareholders’ equity	$	24,599,922		$	23,364,371

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

2

PartnerRe Ltd.

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(Expressed in thousands of U.S. dollars, except share and per share data)

	For the three			For the three			For the six			For the six
	months ended			months ended			months ended			months ended
	June 30,			June 30,			June 30,			June 30,
	2011			2010			2011			2010
Revenues
Gross premiums written	$	1,082,205		$	1,140,175		$	2,639,766		$	3,049,501
Net premiums written	$	1,056,467		$	1,112,735		$	2,526,887		$	2,896,899
Decrease (increase) in unearned premiums		50,978			(8,104	)		(354,853	)		(638,489	)
Net premiums earned		1,107,445			1,104,631			2,172,034			2,258,410
Net investment income		158,328			174,454			309,962			347,576
Net realized and unrealized investment gains (losses)		78,199			46,046			(34,000	)		191,519
Other income		1,596			753			3,408			2,028
Total revenues		1,345,568			1,325,884			2,451,404			2,799,533
Expenses
Losses and loss expenses and life policy benefits		814,523			704,631			2,421,740			1,716,967
Acquisition costs		229,251			244,144			437,100			464,251
Other operating expenses		113,694			160,151			217,991			288,286
Interest expense		12,214			12,803			24,514			19,935
Amortization of intangible assets		9,165			7,833			17,992			12,636
Net foreign exchange gains		(8,737	)		(11,021	)		(9,433	)		(14,648	)
Total expenses		1,170,110			1,118,541			3,109,904			2,487,427
Income (loss) before taxes and interest in (losses) earnings of equity investments		175,458			207,343			(658,500	)		312,106
Income tax expense		50,085			17,762			23,828			45,316
Interest in (losses) earnings of equity investments		(1,188	)		1,346			(443	)		3,791
Net income (loss)		124,185			190,927			(682,771	)		270,581
Preferred dividends		8,631			8,631			17,263			17,263
Net income (loss) available to common shareholders	$	115,554		$	182,296		$	(700,034	)	$	253,318
Comprehensive income (loss)
Net income (loss)	$	124,185		$	190,927		$	(682,771	)	$	270,581
Change in currency translation adjustment		6,303			(105,335	)		44,084			(174,078	)
Change in other accumulated comprehensive loss, net of tax		(1,920	)		(1,321	)		(2,155	)		(5,254	)
Comprehensive income (loss)	$	128,568		$	84,271		$	(640,842	)	$	91,249
Per share data
Net income (loss) per common share:
Basic net income (loss)	$	1.71		$	2.36		$	(10.32	)	$	3.19
Diluted net income (loss)	$	1.69		$	2.31		$	(10.32	)	$	3.13
Weighted average number of common shares outstanding		67,628,052			77,365,445			67,811,366			79,519,198
Weighted average number of common shares and common share equivalents outstanding		68,442,300			78,796,431			67,811,366			81,050,662
Dividends declared per common share	$	0.60		$	0.50		$	1.15		$	1.00

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

3

PartnerRe Ltd.

Unaudited Condensed Consolidated Statements of Shareholders’ Equity

(Expressed in thousands of U.S. dollars)

	For the six months ended June 30, 2011			For the six months ended June 30, 2010
Common shares
Balance at beginning of period	$	84,033		$	82,586
Issuance of common shares		536			629
Balance at end of period		84,569			83,215
Preferred shares
Balance at beginning of period		20,800			20,800
Issuance of preferred shares		14,950			—
Balance at end of period		35,750			20,800
Additional paid-in capital
Balance at beginning of period		3,419,864			3,357,004
Issuance of preferred shares		346,772			—
Issuance of common shares		25,421			30,331
Balance at end of period		3,792,057			3,387,335
Accumulated other comprehensive income (loss)
Balance at beginning of period		4,056			84,927
Change in currency translation adjustment		44,084			(174,078	)
Change in other accumulated comprehensive loss, net of tax		(2,155	)		(5,254	)
Balance at end of period		45,985			(94,405	)
Retained earnings
Balance at beginning of period		4,761,178			4,100,782
Net (loss) income		(682,771	)		270,581
Dividends on common shares		(77,746	)		(79,345	)
Dividends on preferred shares		(17,263	)		(17,263	)
Balance at end of period		3,983,398			4,274,755
Common shares held in treasury
Balance at beginning of period		(1,083,012	)		(372	)
Repurchase of common shares		(226,703	)		(600,086	)
Balance at end of period		(1,309,715	)		(600,458	)
Total shareholders’ equity	$	6,632,044		$	7,071,242

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

4

PartnerRe Ltd.

Unaudited Condensed Consolidated Statements of Cash Flows

(Expressed in thousands of U.S. dollars)

	For the six months ended June 30, 2011			For the six months ended June 30, 2010
Cash flows from operating activities
Net (loss) income	$	(682,771	)	$	270,581
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Amortization of net premium on investments		37,494			37,518
Amortization of intangible assets		17,992			12,636
Net realized and unrealized investment losses (gains)		34,000			(191,519	)
Changes in:
Reinsurance balances, net		(361,501	)		(443,469	)
Reinsurance recoverable on paid and unpaid losses, net of ceded premiums payable		11,481			7,542
Funds held by reinsured companies and funds held – directly managed		552,361			189,635
Deferred acquisition costs		(31,484	)		(80,901	)
Net tax assets and liabilities		(32,493	)		(66,175	)
Unpaid losses and loss expenses including life policy benefits		853,057			194,878
Unearned premiums		354,853			638,489
Other net changes in operating assets and liabilities		(10,651	)		(8,671	)
Net cash provided by operating activities		742,338			560,544
Cash flows from investing activities
Sales of fixed maturities		2,713,137			4,003,008
Redemptions of fixed maturities		801,285			561,593
Purchases of fixed maturities		(4,766,381	)		(4,248,444	)
Sales and redemptions of short-term investments		76,061			94,045
Purchases of short-term investments		(240,207	)		(69,056	)
Sales of equities		457,170			171,643
Purchases of equities		(330,323	)		(341,427	)
Other, net		(17,820	)		(138,272	)
Net cash (used in) provided by investing activities		(1,307,078	)		33,090
Cash flows from financing activities
Cash dividends paid to shareholders		(95,009	)		(96,608	)
Net proceeds from issuance of preferred shares		361,722			—
Repurchase of common shares		(244,222	)		(600,086	)
Issuance of common shares		13,125			15,013
Proceeds from issuance of senior notes		—			500,000
Contract fees on forward sale agreement		—			(2,638	)
Net cash provided by (used in) financing activities		35,616			(184,319	)
Effect of foreign exchange rate changes on cash		24,882			(62,299	)
(Decrease) increase in cash and cash equivalents		(504,242	)		347,016
Cash and cash equivalents—beginning of period		2,111,084			738,309
Cash and cash equivalents—end of period	$	1,606,842		$	1,085,325
Supplemental cash flow information:
Taxes paid	$	103,965		$	109,841
Interest paid	$	24,630		$	17,866

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

5

PartnerRe Ltd.

Notes to Unaudited Condensed Consolidated Financial Statements

1. Organization

PartnerRe Ltd. (the Company) provides reinsurance on a worldwide basis through its principal wholly-owned subsidiaries, including Partner Reinsurance Company Ltd., Partner Reinsurance Europe Limited and Partner Reinsurance Company of the U.S. Risks reinsured include, but are not limited to, property, casualty, motor, agriculture, aviation/space, catastrophe, credit/surety, engineering, energy, marine, specialty property, specialty casualty, multiline and other lines, mortality, longevity and health and alternative risk products. The Company’s alternative risk products include weather and credit protection to financial, industrial and service companies on a worldwide basis.

2. Significant Accounting Policies

The Company’s Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. The Unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries. Intercompany accounts and transactions have been eliminated. To facilitate comparison of information across periods, certain reclassifications have been made to prior year amounts to conform to the current year’s presentation.

The preparation of financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. While Management believes that the amounts included in the Unaudited Condensed Consolidated Financial Statements reflect its best estimates and assumptions, actual results could differ from those estimates. The Company’s principal estimates include:

• Unpaid losses and loss expenses;

• Policy benefits for life and annuity contracts;

• Gross and net premiums written and net premiums earned;

• Recoverability of deferred acquisition costs;

• Recoverability of deferred tax assets;

• Valuation of goodwill and intangible assets; and

• Valuation of certain assets and derivative financial instruments that are measured using significant unobservable inputs.

In the opinion of Management, all adjustments (which include normal recurring adjustments) necessary for a fair presentation of results for the interim periods have been made. As the Company’s reinsurance operations are exposed to low-frequency, high-severity risk events, some of which are seasonal, results for certain interim periods may include unusually low loss experience, while results for other interim periods may include significant catastrophic losses. Consequently, the Company’s results for interim periods are not necessarily indicative of results for the full year. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

3. New Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (FASB) issued new accounting guidance, which updates the existing guidance, related to fair value measurement and disclosures. The amendments clarify or change the application of certain existing requirements and also require some additional disclosures. The guidance is effective for interim and annual periods beginning after December 15, 2011. The Company is currently evaluating the impact of the adoption of this guidance on its disclosures.

4. Fair Value

(a) Fair Value of Financial Instrument Assets

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value by maximizing the use of observable inputs and minimizing the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The level in the hierarchy within which a given fair value measurement falls is determined based on the lowest level input that is significant to the measurement.

6

The Company determines the appropriate level in the hierarchy for each financial instrument that it measures at fair value. In determining fair value, the Company uses various valuation approaches, including market, income and cost approaches. The hierarchy is broken down into three levels based on the observability of inputs as follows:

• Level 1 inputs—Unadjusted, quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

The Company’s financial instruments that it measures at fair value using Level 1 inputs generally include: equities listed on a major exchange, exchange traded funds and exchange traded derivatives, such as futures and certain weather derivatives that are actively traded.

• Level 2 inputs—Quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets and directly or indirectly observable inputs, other than quoted prices, used in industry accepted models.

The Company’s financial instruments that it measures at fair value using Level 2 inputs generally include: U.S. Treasury bonds; U.S. Government Sponsored Entities bonds; Organization for Economic Co-operation and Development Sovereign Treasury bonds; investment grade and high yield corporate bonds; catastrophe bonds; mortality bonds; mortgage-backed securities; asset-backed securities; certain fixed income mutual funds; foreign exchange forward contracts and over-the-counter derivatives such as foreign currency option contracts, equity put and call options, credit default swaps, non-exchange traded futures and interest rate swaps.

• Level 3 inputs—Unobservable inputs.

The Company’s financial instruments that it measures at fair value using Level 3 inputs generally include: unlisted equities; inactively traded fixed maturities including bonds issued by U.S. domiciled state and municipal entities, privately issued corporate securities and special purpose financing asset-backed bonds; real estate mutual fund investments; inactively traded weather derivatives; notes receivable and total return swaps.

The Company’s financial instruments measured at fair value include investments classified as trading securities, certain other invested assets and the segregated investment portfolio underlying the funds held – directly managed account. At June 30, 2011 and December 31, 2010, the Company’s financial instruments measured at fair value were categorized between Levels 1, 2 and 3 as follows (in thousands of U.S. dollars):

7

June 30, 2011	Quoted prices in active  markets for identical assets (Level 1)			Significant other observable  inputs (Level 2)			Significant unobservable inputs (Level 3)			Total
Fixed maturities
U.S. government and agencies	$	—		$	1,486,790		$	86,782		$	1,573,572
Non-U.S. sovereign government, supranational and government related		—			3,258,355			—			3,258,355
Corporate		—			5,713,985			116,428			5,830,413
Asset-backed securities		—			394,046			261,843			655,889
Residential mortgage-backed securities		—			2,999,005			—			2,999,005
Other mortgage-backed securities		—			89,710			1			89,711
Fixed maturities	$	—		$	13,941,891		$	465,054		$	14,406,945
Short-term investments	$	—		$	212,769		$	2,923		$	215,692
Equities
Consumer noncyclical	$	138,638		$	178		$	—		$	138,816
Energy		96,782			1,051			—			97,833
Finance		89,054			617			163			89,834
Technology		78,939			—			—			78,939
Communications		76,188			33			—			76,221
Industrials		71,405			—			—			71,405
Consumer cyclical		57,087			86			—			57,173
Insurance		38,447			—			—			38,447
Other		70,343			408			—			70,751
Mutual funds and exchange traded funds		58,736			210,216			6,542			275,494
Equities	$	775,619		$	212,589		$	6,705		$	994,913
Other invested assets
Derivative assets
Foreign exchange forward contracts	$	—		$	11,634		$	—		$	11,634
Foreign currency option contracts		—			2,921			—			2,921
Futures contracts		6,179			219			—			6,398
Credit default swaps (protection purchased)		—			4			—			4
Credit default swaps (assumed risks)		—			906			—			906
Insurance-linked securities		23			—			251			274
Total return swaps		—			379			4,306			4,685
Interest rate swaps		—			52			—			52
Other assets		—			—			74,018			74,018
Derivative liabilities
Foreign exchange forward contracts		—			(4,512	)		—			(4,512	)
Foreign currency option contracts		—			(470	)		—			(470	)
Futures contracts		(19,126	)		(487	)		—			(19,613	)
Credit default swaps (protection purchased)		—			(2,162	)		—			(2,162	)
Insurance-linked securities		(493	)		—			(14,633	)		(15,126	)
Total return swaps		—			—			(11,459	)		(11,459	)
Interest rate swaps		—			(5,203	)		—			(5,203	)
Other liabilities		—			(1,570	)		—			(1,570	)
Other invested assets	$	(13,417	)	$	1,711		$	52,483		$	40,777
Funds held – directly managed
U.S. government and agencies	$	—		$	230,481		$	355		$	230,836
Non-U.S. sovereign government, supranational and government related		—			313,284			—			313,284
Corporate		—			550,644			—			550,644
Short-term investments		—			42,330			—			42,330
Other invested assets		—			—			21,720			21,720
Funds held – directly managed	$	—		$	1,136,739		$	22,075		$	1,158,814
Total	$	762,202		$	15,505,699		$	549,240		$	16,817,141

8

December 31, 2010	Quoted prices in active  markets for identical assets (Level 1)			Significant other observable  inputs (Level 2)			Significant unobservable inputs (Level 3)			Total
Fixed maturities
U.S. government and agencies	$	—		$	917,600		$	55,124		$	972,724
Non-U.S. sovereign government, supranational and government related		—			2,819,193			—			2,819,193
Corporate		—			6,066,865			76,982			6,143,847
Asset-backed securities		—			343,518			213,139			556,657
Residential mortgage-backed securities		—			2,305,525			—			2,305,525
Other mortgage-backed securities		—			26,153			290			26,443
Fixed maturities	$	—		$	12,478,854		$	345,535		$	12,824,389
Short-term investments	$	—		$	49,397		$	—		$	49,397
Equities
Consumer noncyclical	$	186,016		$	—		$	—		$	186,016
Technology		119,214			—			—			119,214
Energy		118,372			—			—			118,372
Finance		112,309			—			2,486			114,795
Communications		110,982			—			—			110,982
Industrials		100,572			—			—			100,572
Consumer cyclical		81,595			—			—			81,595
Insurance		48,611			—			—			48,611
Other		90,220			—			—			90,220
Mutual funds and exchange traded funds		60,372			—			40,927			101,299
Equities	$	1,028,263		$	—		$	43,413		$	1,071,676
Other invested assets
Derivative assets
Foreign exchange forward contracts	$	—		$	27,880		$	—		$	27,880
Foreign currency option contracts		—			3,516			—			3,516
Futures contracts		30,593			—			—			30,593
Credit default swaps (protection purchased)		—			93			—			93
Credit default swaps (assumed risks)		—			533			—			533
Insurance-linked securities		1,320			—			—			1,320
Total return swaps		—			449			5,592			6,041
Interest rate swaps		—			246			—			246
Other assets		—			—			86,278			86,278
Derivative liabilities
Foreign exchange forward contracts		—			(13,647	)		—			(13,647	)
Futures contracts		(7,956	)		—			—			(7,956	)
Credit default swaps (protection purchased)		—			(2,407	)		—			(2,407	)
Credit default swaps (assumed risks)		—			(401	)		—			(401	)
Insurance-linked securities		(695	)		—			(698	)		(1,393	)
Total return swaps		—			—			(12,848	)		(12,848	)
Interest rate swaps		—			(6,033	)		—			(6,033	)
Other liabilities		—			(441	)		—			(441	)
Other invested assets	$	23,262		$	9,788		$	78,324		$	111,374
Funds held – directly managed
U.S. government and agencies	$	—		$	288,164		$	368		$	288,532
Non-U.S. sovereign government, supranational and government related		—			384,553			—			384,553
Corporate		—			798,587			—			798,587
Mortgage/asset-backed securities		—			—			12,118			12,118
Short-term investments		—			38,613			—			38,613
Other invested assets		—			—			20,528			20,528
Funds held – directly managed	$	—		$	1,509,917		$	33,014		$	1,542,931
Total	$	1,051,525		$	14,047,956		$	500,286		$	15,599,767

9

At June 30, 2011 and December 31, 2010, the aggregate carrying amounts of items included in Other invested assets that the Company did not measure at fair value were $297.6 million and $241.0 million, respectively, which related to the Company’s investments that are accounted for using the cost method of accounting, equity method of accounting or investment company accounting.

In addition to the investments underlying the funds held – directly managed account held at fair value of $1,158.8 million and $1,542.9 million at June 30, 2011 and December 31, 2010, respectively, the funds held – directly managed account also included cash and cash equivalents, carried at fair value, of $149.3 million and $129.2 million, respectively, and accrued investment income of $14.9 million and $19.9 million, respectively. At June 30, 2011 and December 31, 2010, the aggregate carrying amounts of items included in the funds held – directly managed account that the Company did not measure at fair value were $56.5 million and $80.1 million, respectively, which primarily related to other assets and liabilities held by Colisée Re related to the underlying business, which are carried at cost (see Note 5 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010).

At June 30, 2011 and December 31, 2010, substantially all of the accrued investment income in the Unaudited Condensed Consolidated Balance Sheets related to the Company’s investments and the investments underlying the funds held – directly managed account for which the fair value option was elected.

During the three months and six months ended June 30, 2011, there were no significant transfers between Levels 1 and 2.

Disclosures about the fair value of financial instruments that the Company does not measure at fair value exclude insurance contracts and certain other financial instruments. At June 30, 2011 and December 31, 2010, the fair values of financial instrument assets recorded in the Unaudited Condensed Consolidated Balance Sheets not described above, approximate their carrying values.

The following tables are reconciliations of the beginning and ending balances for all financial instruments measured at fair value using Level 3 inputs for the three months ended June 30, 2011 and 2010 (in thousands of U.S. dollars):

For the three months ended June 30, 2011	Balance at beginning of period			Realized  and unrealized investment gains  (losses) included in net income			Purchases			Sales			Net transfers (out of)/into Level 3 (a)		Balance at end of period			Change in unrealized investment gains (losses) relating to assets held at end of period
Fixed maturities
U.S. government and agencies	$	55,929		$	819		$	30,064		$	(30	)	$	—	$	86,782		$	819
Corporate		115,107			2,049			84			(812	)		—		116,428			2,049
Asset-backed securities		262,408			7,707			47,130			(55,402	)		—		261,843			(2,660	)
Residential mortgage-backed securities		4,301			846			—			(5,147	)		—		—			—
Other mortgage-backed securities		576			(191	)		—			(384	)		—		1			(166	)
Fixed maturities	$	438,321		$	11,230		$	77,278		$	(61,775	)	$	—	$	465,054		$	42
Short-term investments	$	1,204		$	(730	)	$	2,449		$	—		$	—	$	2,923		$	(730	)
Equities
Finance	$	161		$	2		$	—		$	—		$	—	$	163		$	2
Mutual funds and exchange traded funds		41,451			594			—			(35,503	)		—		6,542			(804	)
Equities	$	41,612		$	596		$	—		$	(35,503	)	$	—	$	6,705		$	(802	)
Other invested assets
Derivatives, net	$	(17,042	)	$	322		$	(4,815	)	$	—		$	—	$	(21,535	)	$	234
Other		84,662			(1,303	)		3,568			(12,909	)		—		74,018			(1,016	)
Other invested assets	$	67,620		$	(981	)	$	(1,247	)	$	(12,909	)	$	—	$	52,483		$	(782	)
Funds held – directly managed
U.S. government and agencies	$	366		$	(11	)	$	—		$	—		$	—	$	355		$	(11	)
Other invested assets		22,456			(736	)		—			—			—		21,720			(736	)
Funds held – directly managed	$	22,822		$	(747	)	$	—		$	—		$	—	$	22,075		$	(747	)
Total	$	571,579		$	9,368		$	78,480		$	(110,187	)	$	—	$	549,240		$	(3,019	)

(a) The Company’s policy is to recognize the transfers between the hierarchy levels at the beginning of the period.

10

For the three months ended June 30, 2010	Balance at beginning of period			Realized  and unrealized investment gains  (losses) included in net income			Net purchases, sales and settlements			Net transfers (out  of)/into Level 3 (a)		Balance at end of period			Change in unrealized investment gains (losses) relating to assets held at end of period
Fixed maturities
U.S. government and agencies	$	9,720		$	272		$	7		$	—	$	9,999		$	272
Corporate		10,057			300			5,080			—		15,437			300
Asset-backed securities		84,984			7,359			133,615			—		225,958			7,359
Residential mortgage-backed securities		95,029			—			(95,029	)		—		—			—
Other mortgage-backed securities		811			123			(80	)		—		854			123
Fixed maturities	$	200,601		$	8,054		$	43,593		$	—	$	252,248		$	8,054
Equities
Finance	$	2,459		$	(1,039	)	$	695		$	—	$	2,115		$	(1,039	)
Mutual funds and exchange traded funds		35,670			(1,058	)		5,000			—		39,612			(1,058	)
Equities	$	38,129		$	(2,097	)	$	5,695		$	—	$	41,727		$	(2,097	)
Other invested assets
Derivatives, net	$	(7,998	)	$	1,772		$	(8,353	)	$	—	$	(14,579	)	$	1,772
Other		25,918			(253	)		24,624			—		50,289			(253	)
Other invested assets	$	17,920		$	1,519		$	16,271		$	—	$	35,710		$	1,519
Funds held – directly managed
U.S. government and agencies	$	204		$	153		$	—		$	—	$	357		$	153
Mortgage/asset-backed securities		13,260			(683	)		—			—		12,577			(683	)
Other invested assets		30,348			(3,523	)		—			—		26,825			(3,523	)
Funds held – directly managed	$	43,812		$	(4,053	)	$	—		$	—	$	39,759		$	(4,053	)
Total	$	300,462		$	3,423		$	65,559		$	—	$	369,444		$	3,423

During the three months ended June 30, 2011 and 2010, there were no transfers into or out of Level 3.

The following tables are reconciliations of the beginning and ending balances for all financial instruments measured at fair value using Level 3 inputs for the six months ended June 30, 2011 and 2010 (in thousands of U.S. dollars):

11

For the six months ended June 30, 2011	Balance at beginning of period			Realized and unrealized investment gains (losses) included in net loss			Purchases			Sales			Net transfers into Level 3 (a)		Balance at end of period			Change in unrealized investment gains (losses) relating to assets held at end of period
Fixed maturities
U.S. government and agencies	$	55,124		$	1,624		$	30,064		$	(30	)	$	—	$	86,782		$	1,624
Corporate		76,982			(37,066	)		40,878			(4,546	)		40,180		116,428			2,368
Asset-backed securities		213,139			10,678			101,644			(63,618	)		—		261,843			4,257
Residential mortgage-backed securities		—			1,385			4,212			(5,597	)		—		—			—
Other mortgage-backed securities		290			(224	)		408			(473	)		—		1			(203	)
Fixed maturities	$	345,535		$	(23,603	)	$	177,206		$	(74,264	)	$	40,180	$	465,054		$	8,046
Short-term investments	$	—		$	(1,069	)	$	3,992		$	—		$	—	$	2,923		$	(1,069	)
Equities
Finance	$	2,486		$	239		$	—		$	(2,562	)	$	—	$	163		$	13
Mutual funds and exchange traded funds		40,927			1,242			—			(35,627	)		—		6,542			(382	)
Equities	$	43,413		$	1,481		$	—		$	(38,189	)	$	—	$	6,705		$	(369	)
Other invested assets
Derivatives, net	$	(7,954	)	$	(8,803	)	$	(4,778	)	$	—		$	—	$	(21,535	)	$	(8,893	)
Other		86,278			(3,207	)		6,548			(15,601	)		—		74,018			(2,497	)
Other invested assets	$	78,324		$	(12,010	)	$	1,770		$	(15,601	)	$	—	$	52,483		$	(11,390	)
Funds held – directly managed
U.S. government and agencies	$	368		$	(13	)	$	—		$	—		$	—	$	355		$	(13	)
Mortgage/asset-backed securities		12,118			(150	)		—			(11,968	)		—		—			—
Other invested assets		20,528			1,192			—			—			—		21,720			1,192
Funds held – directly managed	$	33,014		$	1,029		$	—		$	(11,968	)	$	—	$	22,075		$	1,179
Total	$	500,286		$	(34,172	)	$	182,968		$	(140,022	)	$	40,180	$	549,240		$	(3,603	)

12

For the six months ended June 30, 2010	Balance at beginning of period			Realized  and unrealized investment gains  (losses) included in net income			Net purchases, sales and settlements			Net transfers (out of)/ into Level 3 (a)			Balance at end of period			Change in unrealized investment gains (losses) relating to assets held at end of period
Fixed maturities
U.S. government and agencies	$	4,286		$	272		$	9,727		$	(4,286	)	$	9,999		$	272
Corporate		15,041			423			10,900			(10,927	)		15,437			423
Asset-backed securities		99,952			4,601			124,305			(2,900	)		225,958			4,576
Residential mortgage-backed securities		77,440			191			(77,631	)		—			—			—
Other mortgage-backed securities		874			153			(173	)		—			854			153
Fixed maturities	$	197,593		$	5,640		$	67,128		$	(18,113	)	$	252,248		$	5,424
Equities
Finance	$	2,488		$	(1,068	)	$	695		$	—		$	2,115		$	(1,068	)
Industrials		805			(84	)		(721	)		—			—			—
Mutual funds and exchange traded funds		34,810			(198	)		5,000			—			39,612			(198	)
Equities	$	38,103		$	(1,350	)	$	4,974		$	—		$	41,727		$	(1,266	)
Other invested assets
Derivatives, net	$	(9,361	)	$	4,315		$	(17,699	)	$	8,166		$	(14,579	)	$	2,490
Other		25,815			(169	)		24,643			—			50,289			(169	)
Other invested assets	$	16,454		$	4,146		$	6,944		$	8,166		$	35,710		$	2,321
Funds held – directly managed
U.S. government and agencies	$	375		$	(18	)	$	—		$	—		$	357		$	(18	)
Non-U.S. sovereign government, supranational and government related		3,417			(13	)		(3,404	)		—			—			—
Mortgage/asset-backed securities		142			(4,431	)		—			16,866			12,577			(4,426	)
Other invested assets		35,685			(8,860	)		—			—			26,825			(8,860	)
Funds held – directly managed	$	39,619		$	(13,322	)	$	(3,404	)	$	16,866		$	39,759		$	(13,304	)
Total	$	291,769		$	(4,886	)	$	75,642		$	6,919		$	369,444		$	(6,825	)

During the six months ended June 30, 2011, a catastrophe bond (included within corporate fixed maturities) with a fair value of $40.2 million was transferred from Level 2 into Level 3. The transfer into Level 3 was due to the lack of observable market inputs at March 31, 2011, leading the Company to apply inputs that were not directly observable. The catastrophe bond matured during the three months ended June 30, 2011.

During the six months ended June 30, 2010, certain fixed maturities with a fair value of $18.1 million were transferred from Level 3 into Level 2. The reclassifications to Level 2 consisted of municipal (included within U.S. government and agencies), corporate and student loans (included within asset-backed securities) fixed maturities. The transfers into Level 2 were due to the availability of quoted prices for similar assets in active markets used for valuation as of June 30, 2010, resulting from the continued recovery of the financial markets. In addition, during the six months ended June 30, 2010, certain derivatives with a fair value in a net liability position of $8.2 million were transferred out of Level 3 into Level 2 due to the availability of observable inputs.

During the six months ended June 30, 2010, certain fixed maturities within the investments underlying the funds held – directly managed account with a fair value of $16.9 million were transferred from Level 2 into Level 3. The reclassification into Level 3 consisted of asset-backed securities and residential and commercial mortgage-backed securities. The transfers into Level 3 were the result of the lack of observable market inputs, leading the Company to apply inputs that were not directly observable.

Changes in the fair value of the Company’s financial instruments subject to the fair value option during the three months and six months ended June 30, 2011 and 2010, respectively, were as follows (in thousands of U.S. dollars):

13

	For the three months  ended June 30, 2011			For the three months  ended June 30, 2010			For the six months  ended June 30, 2011			For the six months ended June 30, 2010
Fixed maturities	$	130,907		$	165,665		$	(9,321	)	$	264,762
Short-term investments		194			7			(446	)		(2,418	)
Equities		(30,197	)		(126,610	)		(14,079	)		(101,198	)
Other invested assets		(3,689	)		(226	)		(3,333	)		(142	)
Funds held – directly managed		10,756			19,988			(1,494	)		31,167
Total	$	107,971		$	58,824		$	(28,673	)	$	192,171

All of the above changes in fair value are included in the Unaudited Condensed Consolidated Statements of Operations under the caption Net realized and unrealized investment gains (losses).

The following methods and assumptions were used by the Company in estimating the fair value of each class of financial instrument recorded in the Unaudited Condensed Consolidated Balance Sheets. There have been no material changes in the Company’s valuation techniques during the periods presented.

Fixed maturities and short-term investments

• U.S. government and agencies — U.S. government and agencies securities consist primarily of bonds issued by the U.S. Treasury, corporate debt securities issued by the Federal National Mortgage Association, the Federal Home Loan Bank and other U.S. agencies as well as bonds issued by U.S. domiciled state and municipal entities. These securities are generally priced by independent pricing services. The independent pricing services may use actual transaction prices for securities that have been actively traded. For securities that have not been actively traded, each pricing source has its own proprietary method to determine the fair value, which may incorporate option adjusted spreads (OAS), interest rate data and market news. The Company generally classifies these securities in Level 2. Certain of the U.S. domiciled states and municipal investments issued by municipal housing authorities are not actively traded and are priced based on internal models using unobservable inputs. Accordingly, the Company classifies these securities in Level 3.

• Non-U.S. sovereign government, supranational and government related — Non-U.S. sovereign government, supranational and government related securities consist primarily of bonds issued by non-U.S. national governments and their agencies, non-U.S. regional governments and supranational organizations. These securities are generally priced by independent pricing services using the techniques described for U.S. government and agencies above. The Company generally classifies these securities in Level 2.

• Corporate — Corporate securities consist primarily of U.S. and foreign corporations covering a variety of industries. These securities are generally priced by independent pricing services and brokers. The pricing provider incorporates information including credit spreads, interest rate data and market news into the valuation of each security. The Company generally classifies these securities in Level 2. When a corporate security is inactively traded or the valuation model uses unobservable inputs, the Company classifies the security in Level 3.

• Asset-backed securities — Asset-backed securities primarily consist of student loans, automobile loans, credit card receivables, equipment leases, and special purpose financing. With the exception of special purpose financing, these asset-backed securities are generally priced by independent pricing services and brokers. The pricing provider applies dealer quotes and other available trade information, prepayment speeds, yield curves and credit spreads to the valuation. The Company generally classifies these securities in Level 2. Special purpose financing securities are generally inactively traded and are priced based on valuation models using unobservable inputs, including cash flow assumptions and credit spreads. The Company generally classifies these securities in Level 3.

• Residential mortgage-backed securities — Residential mortgage-backed securities primarily consist of bonds issued by the Government National Mortgage Association, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, as well as private, non-agency issuers. With the exception of private, non-agency issuers, these residential mortgage-backed securities are generally priced by independent pricing services and brokers. When current market trades are not available, the pricing provider will employ proprietary models with observable inputs including other trade information, prepayment speeds, yield curves and credit spreads. The Company generally classifies these securities in Level 2. Bonds issued by private, non-agency issuers are generally inactively traded and are priced based on valuation models using unobservable inputs, including cash flow assumptions and credit spreads. The Company generally classifies these securities in Level 3.

• Other mortgage-backed securities — Other mortgage-backed securities primarily consist of commercial mortgage-backed securities. These securities are generally priced by independent pricing services and brokers. The pricing provider applies

14

dealer quotes and other available trade information, prepayment speeds, yield curves and credit spreads to the valuation. The Company generally classifies these securities in Level 2. When a commercial mortgage-backed security is inactively traded or the valuation model uses unobservable inputs, the Company classifies the security in Level 3.

In general, the methods employed by the independent pricing services to determine the fair value of the securities that have not actively traded involve the use of “matrix pricing” in which the independent pricing source applies the credit spread for a comparable security that has traded recently to the current yield curve to determine a reasonable fair value. The Company uses a pricing service ranking to consistently select the most appropriate pricing service in instances where it receives multiple quotes on the same security. When fair values are unavailable from these independent pricing sources, quotes are obtained directly from broker-dealers who are active in the corresponding markets. Most of the Company’s fixed maturities are priced from the pricing services or dealer quotes. The Company will typically not make adjustments to prices received from pricing services or dealer quotes; however, in instances where the quoted external price for a security uses significant unobservable inputs, the Company will categorize that security as Level 3. The Company’s inactively traded fixed maturities are classified as Level 3. For all fixed maturity investments, the bid price is used for estimating fair value.

To validate prices, the Company compares the fair value estimates to its knowledge of the current market and will investigate prices that it considers not to be representative of fair value. The Company also reviews an internally generated fixed maturity price validation report which converts prices received for fixed maturity investments from the independent pricing sources and from broker-dealers quotes and plots OAS and duration on a sector and rating basis. The OAS is calculated using established algorithms developed by an independent risk analytics platform vendor. The OAS on the fixed maturity price validation report are compared for securities in a similar sector and having a similar rating, and outliers are identified and investigated for price reasonableness. In addition, the Company completes quantitative analyses to compare the performance of each fixed maturity investment portfolio to the performance of an appropriate benchmark, with significant differences identified and investigated.

Short term investments

Short term investments are valued in a manner similar to the Company’s fixed maturity investments and are generally classified in Level 2. Special purpose financing securities purchased with less than 12 months to maturity are generally inactively traded and are priced based on valuation models using unobservable inputs, including cash flow assumptions and credit spreads. The Company generally classifies these securities in Level 3.

Equities

Equity securities include U.S. and foreign common and preferred stocks, exchange traded funds and mutual funds. Equities and exchange traded funds are generally classified in Level 1 as the Company uses prices received from independent pricing sources based on quoted prices in active markets. Equities categorized as Level 2 are generally mutual funds invested in fixed income securities, where the net asset value of the fund is provided on a daily basis and common stocks traded in inactive markets. Equities categorized as Level 3 are generally mutual funds invested in securities other than the common stock of publicly traded companies, where the net asset value is not provided on a daily basis.

To validate prices, the Company completes quantitative analyses to compare the performance of each equity investment portfolio to the performance of an appropriate benchmark, with significant differences identified and investigated.

Other invested assets

The Company’s exchange traded derivatives, such as futures and certain weather derivatives, are generally categorized as Level 1 as their fair values are quoted prices in active markets. The Company’s foreign exchange forward contracts, foreign currency option contracts, equity put and call options, interest rate swaps, non-exchange traded futures and credit default swaps are generally categorized as Level 2 within the fair value hierarchy and are priced by independent pricing services.

Included in the Company’s Level 3 categorization, in general, are unlisted equities, credit linked notes, certain inactively traded weather derivatives, notes and loans receivable and total return swaps. For Level 3 instruments, the Company will generally either (i) receive a price based on a manager’s or trustee’s valuation for the asset; or (ii) develop an internal discounted cash flow model to measure fair value. Where the Company receives prices from the manager or trustee, these prices are based on the manager’s or trustee’s estimate of fair value for the assets and are generally audited on an annual basis. Where the Company develops its own discounted cash flow models, the inputs will be specific to the asset in question, based on appropriate historical information, adjusted as necessary, and using appropriate discount rates. As part of the Company’s modeling to determine the fair value of an investment, the Company considers counterparty credit risk as an input to the model, however, the majority of the Company’s counterparties are highly rated institutions and the failure of any one counterparty would not have a significant impact on the Company’s financial statements.

To validate prices, the Company will compare them to benchmarks, where appropriate, or to the business results generally within that asset class and specifically to those particular assets. In addition, the fair value measurements of all Level 3 investments are presented to, and peer reviewed by, an internal valuation committee that the Company has established.

15

Funds held – directly managed

The segregated investment portfolio underlying the funds held – directly managed account is comprised of fixed maturities, short-term investments and other invested assets which are fair valued on a basis consistent with the methods described above. Substantially all fixed maturities and short-term investments within the funds held – directly managed account are categorized as Level 2 within the fair value hierarchy.

The other invested assets within the segregated investment portfolio underlying the funds held – directly managed account, which are categorized as Level 3 investments, are primarily real estate mutual fund investments carried at fair value. For the real estate mutual fund investments, the Company receives a price based on the real estate fund manager’s valuation for the asset and further adjusts the price, if necessary, based on appropriate current information on the real estate market.

To validate prices within the segregated investment portfolio underlying the funds held – directly managed account, the Company utilizes the methods described above.

(b) Fair Value of Financial Instrument Liabilities

Disclosures about the fair value of financial instrument liabilities exclude insurance contracts and certain other financial instruments. At June 30, 2011 and December 31, 2010, the fair values of financial instrument liabilities recorded in the Unaudited Condensed Consolidated Balance Sheets approximate their carrying values, with the exception of the debt related to senior notes (Senior Notes) and the debt related to capital efficient notes (CENts). The methods and assumptions used by the Company in estimating the fair value of the Senior Notes and CENts did not change from December 31, 2010.

The carrying values and fair values of the Senior Notes and CENts as of June 30, 2011 and December 31, 2010 were as follows (in thousands of U.S. dollars):

	June 30, 2011				December 31, 2010
	Carrying Value		Fair Value		Carrying Value		Fair Value
Debt related to senior notes (1)		750,000		793,773		750,000		781,950
Debt related to capital efficient notes (2)		63,384		61,133		63,384		59,261

(1) PartnerRe Finance A LLC and PartnerRe Finance B LLC, the issuers of the Senior Notes, do not meet consolidation requirements under U.S. GAAP. Accordingly, the Company shows the related intercompany debt of $750 million in its Unaudited Condensed Consolidated Balance Sheets at June 30, 2011 and December 31, 2010.

(2) PartnerRe Finance II Inc., the issuer of the CENts, does not meet consolidation requirements under U.S. GAAP. Accordingly, the Company shows the related intercompany debt of $71 million in its Unaudited Condensed Consolidated Balance Sheets at June 30, 2011 and December 31, 2010.

5. Derivatives

The Company’s derivative instruments are recorded in the Unaudited Condensed Consolidated Balance Sheets at fair value, with changes in fair value mainly recognized in either net foreign exchange gains and losses or net realized and unrealized investment gains and losses in the Unaudited Condensed Consolidated Statements of Operations or accumulated other comprehensive income or loss in the Unaudited Condensed Consolidated Balance Sheets, depending on the nature of the derivative instrument. The Company’s objectives for holding or issuing these derivatives are as follows:

Foreign Exchange Forward Contracts

The Company utilizes foreign exchange forward contracts as part of its overall currency risk management and investment strategies. From time to time, the Company also utilizes foreign exchange forward contracts to hedge a portion of its net investment exposure resulting from the translation of its foreign subsidiaries and branches whose functional currency is other than the U.S. dollar.

Foreign Currency Option Contracts and Futures Contracts

The Company also utilizes foreign currency option contracts to mitigate foreign currency risk. The Company uses exchange traded treasury note futures contracts to manage portfolio duration and commodity and equity futures to hedge certain investments. The Company also uses commodities futures to replicate the investment return on certain benchmarked commodities.

Credit Default Swaps

The Company purchases protection through credit default swaps to mitigate the risk associated with its underwriting operations, most notably in the credit/surety line, and to manage market exposures.

16

The Company also assumes credit risk through credit default swaps to replicate investment positions. The original term of these credit default swaps is generally five years or less and there are no recourse provisions associated with these swaps. While the Company would be required to perform under exposure assumed through credit default swaps in the event of a default on the underlying issuer, no issuer was in default at June 30, 2011. The counterparties on the Company’s assumed credit default swaps are all highly rated financial institutions.

Insurance-Linked Securities

The Company has entered into various weather derivatives, weather futures and longevity total return swaps for which the underlying risks reference parametric weather risks for the weather derivatives and weather futures, and longevity risk for the longevity total return swaps.

Total Return and Interest Rate Swaps and Interest Rate Derivatives

The Company has entered into total return swaps referencing various project, investments and principal finance obligations. The Company has also entered into interest rate swaps to mitigate the interest rate risk on certain of the total return swaps. The Company may also use other interest rate derivatives to mitigate exposure to interest rate volatility.

The fair values and the related notional values of derivatives included in the Company’s Unaudited Condensed Consolidated Balance Sheets at June 30, 2011 and December 31, 2010 were as follows (in thousands of U.S. dollars):

	Asset derivatives at fair value		Liability derivatives at fair value			Net derivatives
June 30, 2011						Net notional exposure		Fair value
Derivatives not designated as hedges
Foreign exchange forward contracts	$	11,634	$	(4,512	)	$	2,956,150	$	7,122
Foreign currency option contracts		2,921		(470	)		163,304		2,451
Futures contracts		6,398		(19,613	)		2,334,365		(13,215	)
Credit default swaps (protection purchased)		4		(2,162	)		109,890		(2,158	)
Credit default swaps (assumed risks)		906		—			27,500		906
Insurance-linked securities		274		(15,126	)		95,848		(14,852	)
Total return swaps		4,685		(11,459	)		159,720		(6,774	)
Interest rate swaps(1)		52		(5,203	)		—		(5,151	)
Total derivatives	$	26,874	$	(58,545	)			$	(31,671	)
	Asset derivatives at  fair value		Liability derivatives at fair value			Net derivatives
December 31, 2010						Net notional exposure		Fair value
Derivatives designated as hedges
Foreign exchange forward contracts (net investment hedge)	$	—	$	(1,160	)	$	198,448	$	(1,160	)
Total derivatives designated as hedges	$	—	$	(1,160	)			$	(1,160	)
Derivatives not designated as hedges
Foreign exchange forward contracts	$	27,880	$	(12,487	)	$	1,770,448	$	15,393
Foreign currency option contracts		3,516		—			104,386		3,516
Futures contracts		30,593		(7,956	)		1,756,811		22,637
Credit default swaps (protection purchased)		93		(2,407	)		113,752		(2,314	)
Credit default swaps (assumed risks)		533		(401	)		27,500		132
Insurance-linked securities		1,320		(1,393	)		88,765		(73	)
Total return swaps		6,041		(12,848	)		161,408		(6,807	)
Interest rate swaps(1)		246		(6,033	)		—		(5,787	)
Total derivatives not designated as hedges	$	70,222	$	(43,525	)			$	26,697
Total derivatives	$	70,222	$	(44,685	)			$	25,537

(1) The Company enters into interest rate swaps to mitigate notional exposures on certain total return swaps. Accordingly, the notional value of interest rate swaps is not presented separately in the table.

The fair value of all derivatives at June 30, 2011 and December 31, 2010 is recorded in Other invested assets in the Company’s Unaudited Condensed Consolidated Balance Sheets. At June 30, 2011, none of the Company’s derivatives were designated as hedges.

17

The gains and losses in the Unaudited Condensed Consolidated Statements of Operations for derivatives not designated as hedges for the three months and six months ended June 30, 2011 and 2010 were as follows (in thousands of U.S. dollars):

	Amount of gain (loss)  on derivatives recognized in income for the three months ended June 30, 2011			Amount of gain (loss)  on derivatives recognized in income for the three months ended June 30, 2010			Amount of gain (loss)  on derivatives recognized in income for the six months ended June 30, 2011			Amount of gain (loss)  on derivatives recognized in income for the six months ended June 30, 2010
Foreign exchange forward contracts	$	65,250		$	14,557		$	48,234		$	10,542
Foreign currency option contracts		2,457			(1,066	)		2,381			1,134
Total included in net foreign exchange gains and losses	$	67,707		$	13,491		$	50,615		$	11,676
Futures contracts	$	(66,231	)	$	(55,170	)	$	(86,514	)	$	(76,115	)
Credit default swaps (protection purchased)		(306	)		311			(551	)		(341	)
Credit default swaps (assumed risks)		770			(1,400	)		1,607			(1,379	)
Insurance-linked securities		(2,546	)		2,676			(9,620	)		3,814
Total return swaps		(115	)		(212	)		684			2,409
Interest rate swaps		(182	)		(104	)		641			393
Interest rate derivatives		—			—			—			(3,848	)
Other		—			55			—			(66	)
Total included in net realized and unrealized investment gains and losses	$	(68,610	)	$	(53,844	)	$	(93,753	)	$	(75,133	)
Total derivatives	$	(903	)	$	(40,353	)	$	(43,138	)	$	(63,457	)

6. Shareholders’ Equity

Series E Cumulative Redeemable Preferred Shares

In June 2011, the Company issued 14,950,000 of 7.25% Series E cumulative redeemable preferred shares (Series E preferred shares) for a total consideration of $362 million after underwriting discounts, commissions and other related expenses totaling $12 million. The net proceeds were used for general corporate purposes. On or after June 1, 2016, the Company may redeem the Series E preferred shares, in whole at any time or in part from time to time, at $25.00 per share plus accrued and unpaid dividends, if any, without interest. The Series E preferred shares are also redeemable at any time upon certain changes in tax law. Dividends on the Series E preferred shares are cumulative from the date of issuance and are payable quarterly in arrears, commencing September 1, 2011. In the event of liquidation of the Company, the holders of outstanding Series E preferred shares would have preference over the common shareholders and would receive a distribution of $25.00 per share, or an aggregate value of $374 million, plus accrued and unpaid dividends, if any.

7. Net Income (Loss) per Share

The reconciliation of basic and diluted net income (loss) per share for the three months and six months ended June 30, 2011 and 2010 is as follows (in thousands of U.S. dollars or shares, except per share amounts):

	For the three months ended June 30, 2011			For the three months ended June 30, 2010			For the six months  ended June 30, 2011			For the six months  ended June 30, 2010
Numerator:
Net income (loss)	$	124,185		$	190,927		$	(682,771	)	$	270,581
Less: preferred dividends		(8,631	)		(8,631	)		(17,263	)		(17,263	)
Net income (loss) available to common shareholders	$	115,554		$	182,296		$	(700,034	)	$	253,318
Denominator:
Weighted number of common shares outstanding - basic		67,628.1			77,365.4			67,811.4			79,519.2
Share options and other (1)		814.2			1,431.0			—			1,531.5
Weighted average number of common shares and common share equivalents outstanding- diluted		68,442.3			78,796.4			67,811.4			81,050.7
Basic net income (loss) per share	$	1.71		$	2.36		$	(10.32	)	$	3.19
Diluted net income (loss) per share(1)	$	1.69		$	2.31		$	(10.32	)	$	3.13

18

(1) Dilutive securities, in the form of share options and other, that could potentially dilute basic net loss per share were not included in the computation of diluted net loss per share because to do so would have been anti-dilutive for the six months ended June 30, 2011. The weighted average number of common and common share equivalents outstanding would have amounted to 68,769.9 thousand shares if these securities had been included for the six months ended June 30, 2011. In addition, at June 30, 2011 and 2010, share based awards to purchase 1,253.6 and 840.4 thousand common shares, respectively, were excluded from the calculation of diluted weighted average number of common shares and common share equivalents outstanding because their exercise prices were greater than the average market price of the common shares.

8. Commitments and Contingencies

(a) Concentration of Credit Risk

Financing receivables

Included in the Company’s Other invested assets are certain notes receivable which meet the definition of financing receivables and are accounted for using the cost method of accounting. Performance of these notes receivable to date has been within expectations. At June 30, 2011 and December 31, 2010, none of the Company’s notes receivable are past due or in default and, accordingly, the Company believes that an allowance for credit losses related to these notes receivable is not required at June 30, 2011 and December 31, 2010.

The Company monitors the performance of the notes receivable based on the type of underlying collateral and by assigning a “performing” or a “non-performing” indicator of credit quality to each individual receivable. At June 30, 2011, the Company’s notes receivable of $101.6 million were all performing and were collateralized by residential property and commercial property of $51.8 million and $49.8 million, respectively.

The Company purchased financing receivables of $66.0 million during the three months and six months ended June 30, 2011. There were no sales of financing receivables during the three months and six months ended June 30, 2011, however, the outstanding balance has been reduced by settlements of the underlying debt.

(b) Legal Proceedings

There has been no significant change in legal proceedings at June 30, 2011 compared to December 31, 2010. See Note 18(e) to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

9. Segment Information

The Company monitors the performance of its operations in three segments, Non-life, Life and Corporate and Other as described in Note 22 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. The Non-life segment is further divided into four sub-segments: North America, Global (Non-U.S.) Property and Casualty (Global (Non-U.S.) P&C), Global (Non-U.S.) Specialty and Catastrophe. Following the completion of the Company’s integration of PARIS RE Holdings Limited into its other Non-life sub-segments, and to reflect other changes in management responsibilities for certain lines of business and treaties, the Company redefined its financial reporting segments. The comparative data that was previously presented in the Company’s Form 10-Q for the three months and six months ended June 30, 2010 has been recast to conform to the current period presentation.

Because the Company does not manage its assets by segment, net investment income is not allocated to the Non-life segment. However, because of the interest-sensitive nature of some of the Company’s Life products, net investment income is considered in Management’s assessment of the profitability of the Life segment. The following items are not considered in evaluating the results of the Non-life and Life segments: net realized and unrealized investment gains and losses, interest expense, amortization of intangible assets, net foreign exchange gains and losses, income tax expense or benefit and interest in earnings and losses of equity investments. Segment results are shown before consideration of intercompany transactions.

Management measures results for the Non-life segment on the basis of the loss ratio, acquisition ratio, technical ratio, other operating expense ratio and combined ratio (all defined below). Management measures results for the Non-life sub-segments on the basis of the loss ratio, acquisition ratio and technical ratio. Management measures results for the Life segment on the basis of the allocated underwriting result, which includes revenues from net premiums earned, other income or loss and allocated net investment income for Life, and expenses from life policy benefits, acquisition costs and other operating expenses.

The following tables provide a summary of the segment revenues and results for the three months and six months ended June 30, 2011 and 2010 (in millions of U.S. dollars, except ratios):

19

Segment Information

For the three months ended June 30, 2011

	North America			Global (Non-U.S.) P&C			Global (Non-U.S.) Specialty			Catastrophe			Total Non-life Segment			Life Segment			Corporate and Other			Total
Gross premiums written	$	242		$	122		$	350		$	169		$	883		$	195		$	4		$	1,082
Net premiums written	$	242		$	121		$	333		$	161		$	857		$	195		$	4		$	1,056
Decrease (increase) in unearned premiums		19			72			8			(51	)		48			6			(3	)		51
Net premiums earned	$	261		$	193		$	341		$	110		$	905		$	201		$	1		$	1,107
Losses and loss expenses and life policy benefits		(190	)		(127	)		(206	)		(123	)		(646	)		(166	)		(2	)		(814	)
Acquisition costs		(63	)		(53	)		(78	)		(9	)		(203	)		(26	)		—			(229	)
Technical result	$	8		$	13		$	57		$	(22	)	$	56		$	9		$	(1	)	$	64
Other income														—			—			1			1
Other operating expenses														(71	)		(13	)		(30	)		(114	)
Underwriting result													$	(15	)	$	(4	)		n/a		$	(49	)
Net investment income																	16			142			158
Allocated underwriting result (1)																$	12			n/a			n/a
Net realized and unrealized investment gains																				78			78
Interest expense																				(12	)		(12	)
Amortization of intangible assets																				(9	)		(9	)
Net foreign exchange gains																				9			9
Income tax expense																				(50	)		(50	)
Interest in losses of equity investments																				(1	)		(1	)
Net income																				n/a		$	124
Loss ratio (2)		72.8	%		65.9	%		60.3	%		111.7	%		71.4	%
Acquisition ratio (3)		24.1			27.6			22.9			8.1			22.4
Technical ratio (4)		96.9	%		93.5	%		83.2	%		119.8	%		93.8	%
Other operating expense ratio (5)														7.9
Combined ratio (6)														101.7	%

(1) Allocated underwriting result is defined as net premiums earned, other income or loss 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 defined as the sum of the technical ratio and the other operating expense ratio.

20

Segment Information

For the three months ended June 30, 2010

	North America			Global (Non-U.S.) P&C			Global (Non-U.S.) Specialty			Catastrophe			Total Non-life Segment			Life Segment			Corporate and Other			Total
Gross premiums written	$	207		$	189		$	371		$	206		$	973		$	167		$	—		$	1,140
Net premiums written	$	207		$	186		$	355		$	191		$	939		$	167		$	7		$	1,113
Decrease (increase) in unearned premiums		16			45			21			(90	)		(8	)		6			(6	)		(8	)
Net premiums earned	$	223		$	231		$	376		$	101		$	931		$	173		$	1		$	1,105
Losses and loss expenses and life policy benefits		(116	)		(141	)		(292	)		13			(536	)		(169	)		—			(705	)
Acquisition costs		(69	)		(61	)		(82	)		(7	)		(219	)		(25	)		—			(244	)
Technical result	$	38		$	29		$	2		$	107		$	176		$	(21	)	$	1		$	156
Other income (loss)														1			1			(1	)		1
Other operating expenses														(82	)		(13	)		(65	)		(160	)
Underwriting result													$	95		$	(33	)		n/a		$	(3	)
Net investment income																	20			154			174
Allocated underwriting result																$	(13	)		n/a			n/a
Net realized and unrealized investment gains																				46			46
Interest expense																				(13	)		(13	)
Amortization of intangible assets																				(8	)		(8	)
Net foreign exchange gains																				11			11
Income tax expense																				(17	)		(17	)
Interest in earnings of equity investments																				1			1
Net income																				n/a		$	191
Loss ratio		52.2	%		61.1	%		77.6	%		(12.8	)%		57.6	%
Acquisition ratio		30.7			26.4			21.9			6.3			23.4
Technical ratio		82.9	%		87.5	%		99.5	%		(6.5	)%		81.0	%
Other operating expense ratio														8.8
Combined ratio														89.8	%

21

Segment Information

For the six months ended June 30, 2011

	North America			Global (Non-U.S.) P&C			Global (Non-U.S.) Specialty			Catastrophe			Total Non-life Segment			Life Segment			Corporate and Other			Total
Gross premiums written	$	581		$	440		$	724		$	486		$	2,231		$	403		$	6		$	2,640
Net premiums written	$	581		$	437		$	648		$	453		$	2,119		$	402		$	6		$	2,527
(Increase) decrease in unearned premiums		(60	)		(63	)		10			(220	)		(333	)		(17	)		(5	)		(355	)
Net premiums earned	$	521		$	374		$	658		$	233		$	1,786		$	385		$	1		$	2,172
Losses and loss expenses and life policy benefits		(365	)		(277	)		(427	)		(1,040	)		(2,109	)		(311	)		(2	)		(2,422	)
Acquisition costs		(129	)		(93	)		(158	)		(1	)		(381	)		(56	)		—			(437	)
Technical result	$	27		$	4		$	73		$	(808	)	$	(704	)	$	18		$	(1	)	$	(687	)
Other income														2			—			1			3
Other operating expenses														(137	)		(25	)		(56	)		(218	)
Underwriting result													$	(839	)	$	(7	)		n/a		$	(902	)
Net investment income																	31			279			310
Allocated underwriting result																$	24			n/a			n/a
Net realized and unrealized investment losses																				(34	)		(34	)
Interest expense																				(24	)		(24	)
Amortization of intangible assets																				(18	)		(18	)
Net foreign exchange gains																				9			9
Income tax expense																				(24	)		(24	)
Interest in losses of equity investments																				—			—
Net loss																				n/a		$	(683	)
Loss ratio		70.0	%		74.0	%		64.9	%		446.3	%		118.0	%
Acquisition ratio		24.8			25.0			24.0			0.3			21.4
Technical ratio		94.8	%		99.0	%		88.9	%		446.6	%		139.4	%
Other operating expense ratio														7.7
Combined ratio														147.1	%

22

Segment Information

For the six months ended June 30, 2010

	North America			Global (Non-U.S.) P&C			Global (Non-U.S.) Specialty			Catastrophe			Total Non-life Segment			Life Segment			Corporate and Other			Total
Gross premiums written	$	564		$	633		$	880		$	615		$	2,692		$	354		$	3		$	3,049
Net premiums written	$	564		$	621		$	811		$	550		$	2,546		$	349		$	2		$	2,897
Increase in unearned premiums		(73	)		(160	)		(98	)		(295	)		(626	)		(12	)		(1	)		(639	)
Net premiums earned	$	491		$	461		$	713		$	255		$	1,920		$	337		$	1		$	2,258
Losses and loss expenses and life policy benefits		(296	)		(387	)		(595	)		(140	)		(1,418	)		(299	)		—			(1,717	)
Acquisition costs		(137	)		(114	)		(146	)		(18	)		(415	)		(49	)		—			(464	)
Technical result	$	58		$	(40	)	$	(28	)	$	97		$	87		$	(11	)	$	1		$	77
Other income (loss)														2			1			(1	)		2
Other operating expenses														(160	)		(27	)		(101	)		(288	)
Underwriting result													$	(71	)	$	(37	)		n/a		$	(209	)
Net investment income																	37			311			348
Allocated underwriting result																$	—			n/a			n/a
Net realized and unrealized investment gains																				191			191
Interest expense																				(20	)		(20	)
Amortization of intangible assets																				(13	)		(13	)
Net foreign exchange gains																				15			15
Income tax expense																				(45	)		(45	)
Interest in earnings of equity investments																				4			4
Net income																				n/a		$	271
Loss ratio		60.2	%		84.0	%		83.4	%		54.6	%		73.9	%
Acquisition ratio		28.0			24.6			20.5			7.3			21.6
Technical ratio		88.2	%		108.6	%		103.9	%		61.9	%		95.5	%
Other operating expense ratio														8.3
Combined ratio														103.8	%

23

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Overview

The Company is a leading global reinsurer, with a broadly diversified and balanced portfolio of traditional reinsurance risks and capital markets risks.

Successful risk management is the foundation of the Company’s value proposition, with diversification of risks at the core of its risk management strategy. The Company’s ability to succeed in the risk assumption and management business is dependent on its ability to accurately analyze and quantify risk, to understand volatility and how risks aggregate or correlate, and to establish the appropriate capital requirements and limits for the risks assumed. All risks are managed by the Company within an integrated framework of policies and processes that ensure the intelligent and consistent evaluation and valuation of risk, and ultimately provide an appropriate return to shareholders.

The Company’s economic objective is to manage a portfolio of risks that will generate compound annual Diluted Book Value per Share growth of 10% and an average Operating ROE of 13% over a reinsurance cycle. Both of these metrics are defined below in Key Financial Measures. See also Other Key Issues of Management in Item 7 of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

Key Financial Measures

In addition to the Unaudited Condensed Consolidated Balance Sheets and Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income (Loss), Management uses certain key measures to evaluate its financial performance and the overall growth in value generated for the Company’s common shareholders. The four key measures that Management uses, together with definitions of their calculations, are as follows:

							June 30, 2011			December 31, 2010
Diluted book value per common share and common share equivalents outstanding(1)							$	83.71		$	93.77
	For the three months ended June 30, 2011			For the three months ended June 30, 2010			For the six months ended June 30, 2011			For the six months ended June 30, 2010
Operating earnings (loss) available to common shareholders (in millions of U.S. dollars)(2)	$	67		$	142		$	(668	)	$	91
Annualized operating return on beginning diluted book value per common share and common share equivalents outstanding(3)		4.2	%		8.5	%		(21.0	)%		2.7	%
Combined ratio(4)		101.7	%		89.8	%		147.1	%		103.8	%

(1) Diluted book value per common share and common share equivalents outstanding is calculated using common shareholders’ equity (shareholders’ equity less the aggregate liquidation value of preferred shares) divided by the number of fully diluted common shares and common share equivalents outstanding (assuming exercise of all stock-based awards and other dilutive securities).

(2) Operating earnings or loss available to common shareholders (operating earnings or loss) is calculated as net income or loss available to common shareholders excluding net realized and unrealized gains or losses on investments, net of tax, net foreign exchange gains or losses, net of tax, and interest in earnings or losses of equity investments, net of tax, where the Company does not control the investee companies’ activities, and is calculated after preferred dividends. The presentation of operating earnings or loss is a non-GAAP financial measure within the meaning of Regulation G (see Comment on Non-GAAP Measures below) and is reconciled to the nearest GAAP financial measure below. Effective January 1, 2011, Management redefined its operating earnings or loss calculation, as discussed below.

(3) Annualized operating return on beginning diluted book value per common share and common share equivalents outstanding (Operating ROE) is calculated using operating earnings or loss, as defined above, per common share and common share equivalents outstanding, divided by beginning diluted book value per common share and common share equivalents outstanding, as defined above. The presentation of Operating ROE is a non-GAAP financial measure within the meaning of Regulation G (see Comment on Non-GAAP Measures below) and is reconciled to the nearest GAAP financial measure below. Effective January 1, 2011, Management redefined its Operating ROE calculation, as discussed below.

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(4) The combined ratio of the Non-life segment is calculated as the sum of the technical ratio (losses and loss expenses and acquisition costs divided by net premiums earned) and the other operating expense ratio (other operating expenses divided by net premiums earned).

Effective January 1, 2011, Management redefined its operating earnings or loss available to common shareholders (operating earnings or loss) calculation to additionally exclude net foreign exchange gains or losses. Management believes that net foreign exchange gains or losses are not indicative of the performance of, and distort trends in, the Company’s business as they predominantly result from general economic and foreign exchange market conditions. In addition, Management redefined its Annualized operating return on beginning diluted book value per common share and common share equivalents outstanding (Operating ROE, previously referred to as operating return on beginning common shareholders’ equity) calculation to measure Operating ROE on a diluted per share basis. Management believes that the redefined Operating ROE incorporates capital management activities while remaining based on the concept of deploying available capital on an annual basis. Operating earnings or loss and Operating ROE for the three months and six months ended June 30, 2010 have been recast to reflect the Company’s redefined non-GAAP measures.

Diluted book value per common share and common share equivalents outstanding (Diluted Book Value per Share): Management uses growth in Diluted Book Value per Share as a prime measure of the value the Company is generating for its common shareholders, as Management believes that growth in the Company’s Diluted Book Value per Share ultimately translates into growth in the Company’s stock price. Diluted Book Value per Share is impacted by the Company’s net income, capital resources management and external factors such as foreign exchange, interest rates and equity markets, which can drive changes in unrealized gains or losses on its investment portfolio.

The Company’s Diluted Book Value per Share decreased by 11% to $83.71 at June 30, 2011 from $93.77 at December 31, 2010, primarily due to the comprehensive loss in the six months ended June 30, 2011, partially offset by the accretive impact of the share repurchases. The comprehensive loss in the six months ended June 30, 2011 was driven by significant catastrophic losses, which are described in Overview and Review of Net Income (Loss) below. Also see Shareholders’ Equity and Capital Resources Management below.

Operating earnings or loss available to common shareholders (operating earnings or loss): Management uses operating earnings or loss to measure its financial performance as this measure focuses on the underlying fundamentals of the Company’s operations by excluding net realized and unrealized gains or losses on investments, interest in earnings or losses of equity investments and net foreign exchange gains or losses. Net realized and unrealized gains or losses on investments in any particular period are not indicative of the performance of, and distort trends in, the Company’s business as they predominantly result from general economic and financial market conditions, and the timing of realized gains or losses on investments is largely opportunistic. Interest in earnings or losses of equity investments are also not indicative of the performance of, or trends in, the Company’s business as the Company does not control the investee companies’ activities. Net foreign exchange gains or losses are not indicative of the performance of, and distort trends in, the Company’s business as they predominantly result from general economic and foreign exchange market conditions. Management believes that the use of operating earnings or loss enables investors and other users of the Company’s financial information to analyze its performance in a manner similar to how Management analyzes performance. Management also believes that this measure follows industry practice and, therefore, allows the users of financial information to compare the Company’s performance with its industry peer group, and that the equity analysts and certain rating agencies which follow the Company, and the insurance industry as a whole, generally exclude these items from their analyses for the same reasons.

Operating earnings decreased by $75 million from $142 million in the three months ended June 30, 2010 to $67 million in the same period of 2011 primarily due to a decrease in the Non-life underwriting result of $110 million, which was driven by large catastrophic losses, and was partially offset by an increase in the Life underwriting result and lower charges related to the Company’s voluntary termination plan (see Results of Operations—Overview in Item 7 of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 for a discussion of the voluntary termination plan). Operating earnings decreased by $759 million from $91 million in the six months ended June 30, 2010 to a loss of $668 million in the same period of 2011 primarily due to the same factors described for the three months ended June 30, 2011. The factors contributing to the increases or decreases in operating earnings or loss in the three months and six months ended June 30, 2011 compared to the same periods in 2010 are further described in Overview and Review of Net Income (Loss) below.

The presentation of operating earnings or loss available to common shareholders is a non-GAAP financial measure within the meaning of Regulation G and should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP (see Comment on Non-GAAP Measures). The table below provides a reconciliation of operating earnings or loss to the most comparable GAAP financial measure (in millions of U.S. dollars):

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	For the three months ended June 30, 2011			For the three months ended June 30, 2010		For the six months ended June 30, 2011			For the six months ended June 30, 2010
Net income (loss)	$	124		$	191	$	(683	)	$	271
Less:
Net realized and unrealized investment gains (losses), net of tax		41			29		(47	)		141
Net foreign exchange gains, net of tax		9			10		16			19
Interest in (losses) earnings of equity investments, net of tax		(2	)		1		(1	)		3
Dividends to preferred shareholders		9			9		17			17
Operating earnings (loss) available to common shareholders	$	67		$	142	$	(668	)	$	91

Operating ROE: Management uses Operating ROE as a measure of profitability that focuses on the return to common shareholders. Management has set an average 13% Operating ROE target over the reinsurance cycle, which Management believes provides an attractive return to shareholders for the risk assumed. Each business unit and support department throughout the Company is focused on seeking to ensure that the Company meets the 13% return objective. This means that most economic decisions, including capital attribution and underwriting pricing decisions, incorporate an Operating ROE impact analysis. For the purpose of that analysis, an appropriate amount of capital (equity) is attributed to each transaction for determining the transaction’s priced return on attributed capital. Subject to an adequate return for the risk level as well as other factors, such as the contribution of each risk to the overall risk level and risk diversification, capital is attributed to the transactions generating the highest priced return on deployed capital. Management’s challenge consists of (i) attributing an appropriate amount of capital to each transaction based on the risk created by the transaction, (ii) properly estimating the Company’s overall risk level and the impact of each transaction on the overall risk level, (iii) assessing the diversification benefit, if any, of each transaction, and (iv) deploying available capital. The risk for the Company lies in mis-estimating any one of these factors, which are critical in calculating a meaningful priced return on deployed capital, and entering into transactions that do not contribute to the Company’s 13% Operating ROE objective.

Operating ROE decreased from 8.5% in the three months ended June 30, 2010 to 4.2% in the same period of 2011 and from 2.7% in the six months ended June 30, 2010 to a loss of 21.0% in the same period of 2011. The decreases in Operating ROE were primarily due to the decrease in operating earnings in the three months and six months ended June 30, 2011, which were driven by large catastrophic losses, and are described further in Overview and Review of Net Income (Loss).

The presentation of Operating ROE is a non-GAAP financial measure within the meaning of Regulation G and should be considered in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP (see Comment on Non-GAAP Measures). The table below provides a reconciliation of Operating ROE to the most comparable GAAP financial measure:

	For the three			For the three			For the six			For the six
	months ended			months ended			months ended			months ended
	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010
Annualized return on beginning diluted book value per common share calculated with net income (loss) per share available to common shareholders		7.2	%		11.0	%		(22.0	) %		7.4	%
Less:
Annualized net realized and unrealized investment gains (losses), net of tax, on beginning diluted book value per common share		2.5			1.8			(1.5	)		4.1
Annualized net foreign exchange gains, net of tax, on beginning diluted book value per common share		0.6			0.6			0.5			0.5
Annualized net interest in (losses) earnings of equity investments, net of tax, on beginning diluted book value per common share		(0.1	)		0.1			—			0.1
Annualized operating return on beginning diluted book value per common share		4.2	%		8.5	%		(21.0	) %		2.7	%

Combined Ratio: The combined ratio is used industry-wide as a measure of underwriting profitability for Non-life business. A combined ratio under 100% indicates underwriting profitability, as the total losses and loss expenses, acquisition costs and other operating expenses are less than the premiums earned on that business. While an important metric of underwriting profitability, the combined ratio does not reflect all components of profitability, as it does not recognize the impact of interest income earned on

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premiums between the time premiums are received and the time loss payments are ultimately made to clients. The key challenges in managing the combined ratio metric consist of (i) focusing on underwriting profitable business even in the weaker part of the reinsurance cycle, as opposed to growing the book of business at the cost of profitability, (ii) diversifying the portfolio to achieve a good balance of business, with the expectation that underwriting losses in certain lines or markets may potentially be offset by underwriting profits in other lines or markets, and (iii) maintaining control over expenses.

The Non-life combined ratio increased from 89.8% and 103.8% in the three months and six months ended June 30, 2010, respectively, to 101.7% and 147.1% in the same periods of 2011, respectively. The increase in the Non-life combined ratio during the three months ended June 30, 2011 compared to the same period in 2010 was primarily due to large catastrophic losses related to a large number of tornadoes, that caused severe destruction to large areas of southern, mid-western and northeastern United States in April and May 2011 (U.S. tornadoes), and a net increase in the Company’s loss estimates related to the large catastrophic losses that occurred during the three months ended March 31, 2011, which were primarily associated with the New Zealand earthquake that occurred in February 2011 (New Zealand Earthquake). These events contributed 19.9 points to the combined ratio during the three months ended June 30, 2011, while the Non-life combined ratio included 6.9 points related to the Deepwater Horizon Oil Platform loss (Deepwater Horizon) in the same period of 2010. The increase in the Non-life combined ratio during the six months ended June 30, 2011 compared to the same period in 2010 was primarily due to large catastrophic losses related to the Japan Earthquake and resulting tsunami (Japan Earthquake), the New Zealand Earthquake, U.S. tornadoes, the floods in Queensland, Australia (Australian Floods) and aggregate contracts covering losses in Australia and New Zealand. These events contributed 67.6 points to the combined ratio during the six months ended June 30, 2011, while the Non-life combined ratio included 18.2 points related to the Chile Earthquake and Deepwater Horizon in the same period of 2010.

Comment on Non-GAAP Measures

Throughout this filing, the Company’s results of operations have been presented in the way that Management believes will be the most meaningful and useful to investors, analysts, rating agencies and others who use financial information in evaluating the performance of the Company. This presentation includes the use of operating earnings or loss and Operating ROE that are not calculated under standards or rules that comprise U.S. GAAP. These measures are referred to as non-GAAP financial measures within the meaning of Regulation G. Management believes that these non-GAAP financial measures are important to investors, analysts, rating agencies and others who use the Company’s financial information and will help provide a consistent basis for comparison between years and for comparison with the Company’s peer group, although non-GAAP measures may be defined or calculated differently by other companies. Investors should consider these non-GAAP measures in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP. A reconciliation of these measures to the most comparable U.S. GAAP financial measures, net income or loss and return on beginning common shareholders’ equity calculated with net income or loss available to common shareholders, is presented above.

Risk Management

A key challenge in the reinsurance industry is to create economic value through the intelligent assumption of reinsurance and capital markets and investment risk, but also to limit or mitigate those risks that can destroy tangible as well as intangible value. Management believes that every organization faces numerous risks that could threaten the successful achievement of a company’s goals and objectives. These include choice of strategy and markets, economic and business cycles, competition, changes in regulation, data quality and security, fraud, business interruption and management continuity; all factors which can be viewed as either strategic or operational risks that are common to any industry. See Risk Factors in Item 1A of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. In addition to these risks, the Company assumes risks and its results are primarily determined by how well the Company understands, prices and manages assumed risk. While many industries and companies start with a return goal and then attempt to shed risks that may derail that goal, the Company starts with a capital-based risk appetite and then looks for risks that meet its return targets within that framework. Management believes that this construct allows the Company to balance the cedants’ need for certainty of claims payment with the shareholders’ need for an adequate return on their capital. See Executive Overview—Other Key Issues of Management—Risk Management in Item 7 of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 for a complete description of the Company’s risks, risk management framework and the related risk management strategies and controls.

The Company manages assumed risk at a strategic level through diversification, risk appetite, and limits. For each key risk, the Board approves a risk appetite that the Company defines as the percentage of economic capital the Company is willing to expose to economic loss with a modeled probability of occurring once every 15 years and once every 75 years. The Company manages its exposure to key risks such that the modeled economic loss at a 1 in 15 year and a 1 in 75 year return period are less than the economic capital the Company is willing to expose to the key risks at those return periods.

The major risks to the Company’s balance sheet are typically due to events that Management refers to as shock losses. The Company defines a shock loss as an event that has the potential to materially impact economic value. The Company defines its economic value as the difference between the net present value of tangible assets and the net present value of liabilities, using appropriate risk discount rates, plus the unrecognized value of the Life portfolio. For traded assets, the calculated net present values are equivalent to market values.

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There are four areas of risk that the Company has currently identified as having the greatest potential for shock losses: catastrophe, reserving for casualty and other long-tail lines, equity and equity-like investment risk and longevity risk. The Company manages the risk of shock losses by setting risk appetite and limits, as described above and below, for each type of shock loss. The Company establishes limits to manage the maximum foreseeable loss from any one event and considers the possibility that several shock losses could occur at one time, for example a major catastrophe event accompanied by a collapse in the equity markets. Management believes that the limits that it has placed on shock losses will allow the Company to continue writing business should such an event occur.

See Other Key Issues of Management—Risk Management in Item 7 of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 for a discussion of the Company’s exposure to catastrophe risk, casualty reserving risk, equity investment risk and longevity risk.

Other risks such as interest rate risk and credit spread risk have the ability to impact results substantially and may result in volatility in results from period to period. However, Management believes that by themselves, interest rate risk and credit spread risk are unlikely to represent a material threat to the Company’s long-term economic value. See Quantitative and Qualitative Disclosures about Market Risk in Item 3 of Part I of this report for additional disclosure on interest rate risk, credit spread risk, foreign currency risk, counterparty credit risk and equity price risk.

The Company seeks to maintain a risk appetite moderately above the average of the reinsurance market because Management believes that this position offers the best potential for creating shareholder value at an acceptable risk level. The most profitable products generally present the most volatility and potential risk. Management believes that the Company’s actual risk profile is equal to or less than the average of the reinsurance market because of the level of diversification achieved in the portfolio, the strict adherence to risk appetite and limits, and the risk mitigation strategies employed.

The limits and actual exposures of the Company for its four major risks are as follows:

	Limit at June 30, 2011		Deployed at June 30, 2011		Deployed at December 31, 2010
Catastrophe risk – largest zonal limit	$	2.8 billion	$	2.1 billion	$	2.5 billion
Casualty reserving risk – total earned premiums for casualty and other long-tail lines for the four most recent underwriting periods		6.3 billion		2.9 billion		3.0 billion
Equity investment risk – value of equity and equity-like securities		3.3 billion		1.5 billion		1.5 billion
Longevity risk – net present value loss from extreme mortality improvement scenario		2.0 billion		1.0 billion		1.0 billion

The following table summarizes risk appetite and modeled economic loss for the Company’s major risks discussed above:

	Risk Appetite at June 30, 2011(1)		Modeled Economic Loss at June 30, 2011(1)		Modeled Economic Loss at December 31, 2010(1)
Catastrophe risk – 1 in 75 year annual aggregate loss	$	1.4 billion	$	1.3 billion	$	1.3 billion
Casualty reserving risk – casualty and other long-tail lines 1 in 15 year prior years reserve development		0.7 billion		0.4 billion		0.4 billion
Equity investment risk – 1 in 75 year decline in value		1.1 billion		0.5 billion		0.5 billion

(1) The Company has not defined a risk appetite for longevity risk as it believes that establishing a limit is currently the most appropriate risk management metric. In addition, the Company has not relied upon a modeled economic loss for longevity risk.

Critical Accounting Policies and Estimates

Critical Accounting Policies and Estimates of the Company at June 30, 2011 have not changed materially compared to December 31, 2010. See Critical Accounting Policies and Estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. The following discussion updates specific information related to the Company’s estimates for losses and loss expenses and life policy benefits and valuation of investments and funds held – directly managed, including certain derivative financial instruments.

Losses and Loss Expenses and Life Policy Benefits

Losses and Loss Expenses

Because a significant amount of time can elapse between the assumption of risk, occurrence of a loss event, the reporting of the event to an insurance company (the primary company or the cedant), the subsequent reporting to the reinsurance company (the

28

reinsurer) and the ultimate payment of the claim on the loss event by the reinsurer, the Company’s liability for unpaid losses and loss expenses (loss reserves) is based largely upon estimates. The Company categorizes loss reserves into three types of reserves: reported outstanding loss reserves (case reserves), additional case reserves (ACRs) and incurred but not reported (IBNR) reserves. The Company updates its estimates for each of the aforementioned categories on a quarterly basis using information received from its cedants. The Company also estimates the future unallocated loss adjustment expenses (ULAE) associated with the loss reserves and these form part of the Company’s loss adjustment expense reserves. The Company’s Non-life loss reserves for each category and sub-segment are reported in the table included later in this section.

The amount of time that elapses before a claim is reported to the cedant and then subsequently reported to the reinsurer is commonly referred to in the industry as the reporting tail. For all lines, the Company’s objective is to estimate ultimate losses and loss expenses. Total loss reserves are then calculated by subtracting losses paid. Similarly, IBNR reserves are calculated by subtraction of case reserves and ACRs from total loss reserves.

The Company analyzes its ultimate losses and loss expenses after consideration of the loss experience of various reserving cells. The Company assigns treaties to reserving cells and allocates losses from the treaty to the reserving cell. The reserving cells are selected in order to ensure that the underlying treaties have homogeneous loss development characteristics (e.g., reporting tail) but are large enough to make estimation of trends credible. The selection of reserving cells is reviewed annually and changes over time as the business of the Company evolves. For each reserving cell, the Company’s estimates of loss reserves are reached after a review of the results of several commonly accepted actuarial projection methodologies. In selecting its best estimate, the Company considers the appropriateness of each methodology to the individual circumstances of the reserving cell and underwriting year for which the projection is made.

See Critical Accounting Policies and Estimates—Losses and Loss Expenses and Life Policy Benefits in Item 7 of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 for additional information on the reserving methodologies employed by the Company, the principal reserving methods used for the reserving lines, the principal parameter assumptions underlying the methods and the main underlying factors upon which the estimates of reserving parameters are predicated.

The Company’s best estimate of total loss reserves is typically in excess of the midpoint of the actuarial ultimate liability estimate. The Company believes that there is potentially significant risk in estimating loss reserves for long-tail lines of business and for immature underwriting years that may not be adequately captured through traditional actuarial projection methodologies as these methodologies usually rely heavily on projections of prior year trends into the future. In selecting its best estimate of future liabilities, the Company considers both the results of actuarial point estimates of loss reserves as well as the potential variability of these estimates as captured by a reasonable range of actuarial liability estimates. The selected best estimates of reserves are always within the reasonable range of estimates indicated by the Company’s actuaries.

During the three months and six months ended June 30, 2011 and 2010, the Company reviewed its estimate for prior year losses for each sub-segment of the Non-life segment (defined below in Results by Segment) and, in light of developing data, adjusted its ultimate loss ratios for prior accident years. The following table summarizes the net prior year favorable reserve development for each sub-segment of the Company’s Non-life segment for the three months and six months ended June 30, 2011 and 2010 (in millions of U.S. dollars):

	For the three		For the three		For the six		For the six
	months ended		months ended		months ended		months ended
	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Net Non-life prior year favorable reserve development:
North America	$	55	$	53	$	95	$	76
Global (Non-U.S.) P&C		22		25		54		59
Global (Non-U.S.) Specialty		58		32		93		48
Catastrophe		26		11		61		31
Total net Non-life prior year favorable reserve development	$	161	$	121	$	303	$	214

The net Non-life favorable reserve development on prior accident years for the three months and six months ended June 30, 2011 and 2010 was driven by the following factors (in millions of U.S. dollars):

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	For the three months ended June 30, 2011		For the three months ended June 30, 2010		For the six months ended June 30, 2011			For the six months ended June 30, 2010
Net Non-life prior year favorable (adverse) reserve development:
Net prior year reserve development due to changes in premiums	$	2	$	—	$	(26	)	$	(6	)
Net prior year reserve development due to all other factors (1)		159		121		329			220
Total net Non-life prior year favorable reserve development	$	161	$	121	$	303		$	214

(1) Net prior year reserve development due to all other factors includes, but is not limited to, loss experience, changes in assumptions and changes in methodology.

For a discussion of net prior year favorable reserve development by Non-life sub-segment, see Results by Segment below. See Critical Accounting Policies and Estimates—Losses and Loss Expenses and Life Policy Benefits in Item 7 of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 for additional information by reserving lines.

The following table shows the gross reserves reported by cedants (case reserves), those estimated by the Company (ACRs and IBNR reserves) and the total gross, ceded and net loss reserves recorded as of June 30, 2011 for each Non-life sub-segment (in millions of U.S. dollars):

	Case reserves		ACRs		IBNR reserves		Total gross loss reserves recorded		Ceded loss reserves			Total net loss reserves recorded
North America	$	989	$	138	$	2,166	$	3,293	$	(22	)	$	3,271
Global (Non-U.S.) P&C		1,621		7		1,283		2,911		(32	)		2,879
Global (Non-U.S.) Specialty		2,109		81		1,780		3,970		(236	)		3,734
Catastrophe		374		1,059		409		1,842		(88	)		1,754
Total Non-life	$	5,093	$	1,285	$	5,638	$	12,016	$	(378	)	$	11,638

The net loss reserves represent the Company’s best estimate of future losses and loss expense amounts based on the information available at June 30, 2011. Loss reserves rely upon estimates involving actuarial and statistical projections at a given time that reflect the Company’s expectations of the costs of the ultimate settlement and administration of claims. These estimates are continually reviewed and the ultimate liability may be in excess of, or less than, the amounts provided, for which any adjustments will be reflected in the period in which the need for an adjustment is determined.

The Company’s best estimates are point estimates within a reasonable range of actuarial liability estimates. These ranges are developed using stochastic simulations and techniques and provide an indication as to the degree of variability of the loss reserves. The Company interprets the ranges produced by these techniques as confidence intervals around the point estimates for each Non-life sub-segment. However, due to the inherent volatility in the business written by the Company, there can be no guarantee that the final settlement of the loss reserves will fall within these ranges.

The recorded point estimates related to net loss reserves recorded by the Company, and the range of actuarial estimates at June 30, 2011, were as follows for each sub-segment of the Non-life segment (in millions of U.S. dollars):

	Recorded Point
	Estimate		High		Low
Net Non-life sub-segment loss reserves:
North America	$	3,271	$	3,494	$	2,584
Global (Non-U.S.) P&C		2,879		3,115		2,463
Global (Non-U.S.) Specialty		3,734		3,889		3,302
Catastrophe		1,754		1,851		1,637

It is not appropriate to add together the ranges of each sub-segment in an effort to determine a high and low range around the Company’s total Non-life carried loss reserves.

Of the Company’s $11,638 million of net Non-life loss reserves at June 30, 2011, $1,165 million of net loss reserves for accident years 2005 and prior are guaranteed by Colisée Re, pursuant to the Reserve Agreement, and are not subject to loss reserve variability. See Summary of certain agreements between AXA SA, Colisée Re and Paris Re in Item 1 of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

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Life Policy Benefits

Policy benefits for life and annuity contracts relate to the business in the Company’s Life segment, which predominantly includes reinsurance of longevity, subdivided into standard and non-standard annuities, and mortality business, which includes traditional death and disability covers (with various riders), term assurance and critical illness (TCI) written in the UK and Ireland, and guaranteed minimum death benefit (GMDB) written in Continental Europe.

The Company categorizes life reserves into three types of reserves: reported outstanding loss reserves (case reserves), incurred but not reported (IBNR) reserves and reserves for future policy benefits. Such liabilities are established based on methods and underlying assumptions in accordance with U.S. GAAP and applicable actuarial standards. Principal assumptions used in the establishment of reserves for future policy benefits have been determined based upon information reported by ceding companies, supplemented by the Company’s actuarial estimates of mortality, critical illness, persistency and future investment income, with appropriate provision to reflect uncertainty.

For the traditional life portfolio, case reserves, IBNR reserves and reserves for future policy benefits are mainly calculated at the treaty level. The Company updates its estimates for each of the aforementioned categories on a quarterly basis using information received from its cedants.

For long duration products, a reserve adequacy test is periodically performed based on the latest best estimate assumptions by line of business, including an experience analysis and a review of likely future experience. If such review produces reserves in excess of those currently held, then the locked-in assumptions will be revised and a loss recognized.

See Critical Accounting Policies and Estimates—Losses and Loss Expenses and Life Policy Benefits—Life Policy Benefits in Item 7 of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 for additional information on the reserving methodologies employed by the Company for its longevity and mortality lines.

The Life segment experienced net adverse prior year loss development of $2 million in the three months ended June 30, 2011, primarily driven by net adverse development on certain short-term disability treaties in the mortality line. The net favorable prior year loss development of $2 million in the six months ended June 30, 2011 was primarily due to favorable development related to the GMDB business, driven by updated cedant information and an improvement in the capital markets, being offset by adverse development on certain short-term treaties and a credit life treaty in the mortality line. The Life segment reported net adverse prior year loss development of $28 million and $17 million during the three months and six months ended June 30, 2010, respectively, primarily driven by adverse development in the longevity line, due to an improvement in the mortality trend related to an impaired life annuity (ILA) treaty. See Results by Segment below.

Valuation of Investments and Funds Held – Directly Managed, including certain Derivative Financial Instruments

The Company defines fair value as the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company measures the fair value of its financial instruments according to a fair value hierarchy that prioritizes the information used to measure fair value into three broad levels.

Under the fair value hierarchy, Management uses certain assumptions and judgments to derive the fair value of its investments, particularly for those assets with significant unobservable inputs, commonly referred to as Level 3 assets. The Company’s Level 3 assets totaled $549 million and $500 million at June 30, 2011 and December 31, 2010, respectively. At June 30, 2011, the Level 3 assets of $549 million included fixed maturities and short-term investments of $468 million, equities of $7 million, other invested assets of $52 million and investments underlying the funds held – directly managed account of $22 million. For additional information related to the transfers into, and out of, the Company’s Level 3 classification during the three months and six months ended June 30, 2011, see Note 4 to Unaudited Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.

For additional information on the valuation techniques, methods and assumptions that were used by the Company to estimate the fair value of its fixed maturities, short-term investments, equities, other invested assets and investments underlying the funds held – directly managed account, see Note 4 to Unaudited Condensed Consolidated Financial Statements included in Item 1 of Part I of this report. For additional information on the Company’s use of derivative financial instruments, see Note 5 to Unaudited Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.

Results of Operations—for the Three Months and Six Months Ended June 30, 2011 and 2010

The following discussion of Results of Operations contains forward-looking statements based upon assumptions and expectations concerning the potential effect of future events that are subject to uncertainties. See Item 1A of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and Item 1A of Part II of this report for a review of important risk factors. Any of these risk factors could cause actual results to differ materially from those reflected in such forward-looking statements.

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The Company’s reporting currency is the U.S. dollar. The Company’s significant subsidiaries and branches have one of the following functional currencies: U.S. dollar, euro or Canadian dollar. As a significant portion of the Company’s operations is transacted in foreign currencies, fluctuations in foreign exchange rates may affect year over year comparisons. To the extent that fluctuations in foreign exchange rates affect comparisons, their impact has been quantified, when possible, and discussed in each of the relevant sections. See Note 2(m) to Consolidated Financial Statements in Item 8 of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 for a discussion of translation of foreign currencies.

The foreign exchange fluctuations for the principal currencies in which the Company transacts business were as follows:

• the U.S. dollar average exchange rate was weaker against most currencies in the three months ended June 30, 2011 compared to the same period in 2010 and weaker against most currencies, except the euro, in the six months ended June 30, 2011 compared to the same period in 2010; and

• the U.S. dollar exchange rate weakened against most currencies at June 30, 2011 compared to December 31, 2010.

Overview

The Company measures its performance in several ways. Among the performance measures accepted under U.S. GAAP is diluted net income per share, a measure that focuses on the return provided to the Company’s common shareholders. Diluted net income per share is obtained by dividing net income available to common shareholders by the weighted average number of common shares and common share equivalents outstanding. Net income available to common shareholders is defined as net income less preferred dividends. See the discussion of the non-GAAP performance measures that the Company uses (operating earnings or loss and Operating ROE) and the reconciliation of those non-GAAP measures to the most comparable GAAP measures in Key Financial Measures above.

The year over year comparison of the Company’s results is primarily affected by the losses related to large catastrophic events in the three months and six months ended June 30, 2011 and 2010, the decrease in gross and net premiums written in the Non-life segment due to cancellations and non-renewals of business as a result of decreases in pricing, the repositioning of the Company’s portfolio following the integration of PARIS RE Holdings Limited’s (Paris Re) business, including a reduction in catastrophe exposures, and continued volatility in the capital and credit markets. To the extent that these events have affected the year over year comparison of the Company’s results, their impact has been quantified and discussed in each of the relevant sections. An overview of each of these events is provided below.

As the Company’s reinsurance operations are exposed to low-frequency high-severity risk events, some of which are seasonal, results for certain periods may include unusually low loss experience, while results for other periods may include significant catastrophic losses. Consequently, the Company’s results for interim periods are not necessarily indicative of results for the full year.

During the three months ended March 31, 2011 the Company incurred losses, net of retrocession, reinstatement premiums and profit commission adjustments, of $1,071 million related to the combined impact of the Japan Earthquake, New Zealand Earthquake, Australian Floods and an aggregate contract covering losses in Australia and New Zealand. Based on information received from cedants, the Company has increased its loss estimates related to these events during the three months ended June 30, 2011 by $59 million, net of retrocession, reinstatement premiums and profit commission adjustments, which primarily related to adverse development on the New Zealand Earthquake of $71 million following the receipt of updated cedant information.

During the three months ended June 30, 2011, the Company incurred losses of $89 million, net of retrocession, reinstatement premiums and profit commission adjustments related to the U.S. tornadoes and $33 million related to an aggregate contract covering losses in Australia and New Zealand.

During the six months ended June 30, 2011, the Company’s incurred losses related to these events, net of retrocession, reinstatement premiums and profit commission adjustments, of $1,259 million, with $717 million related to the Japan Earthquake, $323 million related to the New Zealand Earthquake, $93 million related to aggregate contracts covering losses in New Zealand and Australia, $89 million related to the U.S. tornadoes and $37 million related to the Australian Floods (see Results by Segment below for further details).

During the three months and six months ended June 30, 2010 the Company incurred losses of $55 million and $355 million, net of retrocession, reinstatement premiums and profit commission adjustments, related to the combined impact of the Chile Earthquake and Deepwater Horizon, respectively.

Loss estimates arising from earthquakes are inherently more uncertain than those from other catastrophic events. The Company’s actual losses from the New Zealand Earthquake may materially exceed the estimated losses as a result of, among other things, an increase in industry insured loss estimates, the expected lengthy claims development period, in particular for earthquake related losses, and the receipt of additional information from cedants, brokers and loss adjusters.

The Company’s loss estimate related to the Japan Earthquake is inherently more uncertain than those from other catastrophic events given it is based on limited and preliminary information that has been received from cedants to date and is also based, to a

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lesser extent, on modeled losses. While the Company believes its techniques for modeling the impact of losses related to this event provides a reasonable basis for the estimation of its loss exposure, the Company cautions that estimates based on modeling are subject to a high degree of uncertainty. Additionally, due to the characteristics of the Company’s reinsurance portfolio in the region, changes in loss assumptions for specific cedants may have a material impact on the Company’s loss estimate related to this event given a significant portion of the losses are concentrated with a few large cedants. The Company believes there remains a high degree of uncertainty related to its loss estimates related to the Japan Earthquake and the ultimate losses arising from this event may be materially in excess of, or less than, the amounts provided for in the Unaudited Condensed Consolidated Balance Sheet at June 30, 2011. Any adjustments to the Company’s preliminary estimate of its ultimate losses will be reflected in the periods in which they are determined, which may affect the Company’s operating results in future periods.

The following table reflects the combined impact of the above losses and the impact on the Company’s technical result, net realized and unrealized investment losses and pre-tax income by segment and sub-segment during the three months and six months ended June 30, 2011 (in millions of U.S. dollars):

Three months ended June 30, 2011	North America			Global (Non-U.S.) P&C		Global (Non-U.S.) Specialty		Catastrophe			Total Non-life Segment			Life Segment		Corporate and Other		Total
Net losses and loss expenses and life policy benefits	$	40		$	6	$	10	$	144		$	200		$	—	$	2	$	202
Reinstatement premiums		—			—		—		(18	)		(18	)		—		—		(18	)
Acquisition costs		(6	)		—		—		2			(4	)		—		—		(4	)
Impact on technical result	$	34		$	6	$	10	$	128		$	178		$	—	$	2	$	180
Net realized and unrealized investment losses												—			—		—		—
Impact on pre-tax income											$	178		$	—	$	2	$	180
Six months ended June 30, 2011	North America			Global (Non-U.S.) P&C		Global (Non-U.S.) Specialty		Catastrophe			Total Non-life Segment			Life Segment		Corporate and Other		Total
Net losses and loss expenses and life policy benefits	$	53		$	52	$	43	$	1,095		$	1,243		$	4	$	2	$	1,249
Reinstatement premiums		—			—		—		(23	)		(23	)		—		—		(23	)
Acquisition costs		(6	)		—		—		(10	)		(16	)		—		—		(16	)
Impact on technical result	$	47		$	52	$	43	$	1,062		$	1,204		$	4	$	2	$	1,210
Net realized and unrealized investment losses												—			—		49		49
Impact on pre-tax income											$	1,204		$	4	$	51	$	1,259

During the three months and six months ended June 30, 2011, gross premiums written in the Company’s Non-life segment decreased by 9% and 17%, respectively, compared to the same periods in 2010. The decrease in gross premiums written impacted all of the Company’s Non-life sub-segments, except the North America sub-segment, and was most pronounced in the Global (Non-U.S.) P&C sub-segment. The decreases are primarily driven by the effects of the Company’s decision to reduce or cancel business, as a result of decreases in pricing in certain competitive markets and the repositioning of its portfolios following the integration of Paris Re’s business, including reducing the level of catastrophe-exposed business written.

During the three months ended June 30, 2011, European and U.S. risk-free interest rates decreased, credit spreads widened and equity markets remained relatively flat, while the U.S. dollar weakened against most major currencies. In the six months ended June 30, 2011, European and U.S. risk-free interest rates increased modestly, equity markets improved and credit spreads were flat, while the U.S. dollar weakened against most major currencies. As a result of these movements, the value of the Company’s investment portfolio and cash and cash equivalents increased at June 30, 2011 compared to December 31, 2010, primarily due to the impact of foreign exchange and higher equity markets and was partially offset by the impact of increased risk free rates.

These factors affecting the year over year comparison of the Company’s results are discussed below in Review of Net Income (Loss), Results by Segment and Financial Condition, Liquidity and Capital Resources, and may continue to affect our results of operations and financial condition in the future.

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Net income (loss), preferred dividends, net income (loss) available to common shareholders and diluted net income (loss) per share for the three months and six months ended June 30, 2011 and 2010 were as follows (in millions of U.S. dollars, except per share data):

	For the three months ended June 30, 2011		% Change 2011 over 2010			For the three months ended June 30, 2010		For the six months ended June 30, 2011			% Change 2011 over 2010			For the six months ended June 30, 2010
Net income (loss)	$	124		(35	) %	$	191	$	(683	)		NM	%	$	271
Less: preferred dividends		9		—			9		17			—			17
Net income (loss) available to common shareholders	$	115		(37	)	$	182	$	(700	)		NM		$	254
Diluted net income (loss) per share	$	1.69		(27	)	$	2.31	$	(10.32	)		NM		$	3.13

NM: not meaningful

Three-month result

The decrease in net income, net income available to common shareholders and diluted net income per share for the three months ended June 30, 2011 compared to the same period in 2010 resulted primarily from:

• a decrease in the Non-life underwriting result of $110 million, driven by large catastrophic losses related to the U.S. tornadoes and net adverse loss development on the prior quarter primarily related to the New Zealand Earthquake, which were partially offset by an increase in net favorable prior year loss development, compared to a large loss related to Deepwater Horizon in the three months ended June 30, 2010;

• an increase in income tax expense of $33 million, resulting from a change in the geographic distribution of the Company’s pre-tax net income; and

• a decrease in net investment income of $16 million; partially offset by

• a decrease in other corporate operating expenses of $35 million, primarily driven by the charges related to the Company’s voluntary termination plan in the three months ended June 30, 2010;

• an increase in pre-tax net realized and unrealized investment gains of $32 million; and

• an improvement in the Life underwriting result of $29 million, primarily driven by lower net adverse loss development on prior years.

Six-month result

The decrease in net (loss) income, net (loss) income available to common shareholders and diluted net (loss) income per share for the six months ended June 30, 2011 compared to the same period in 2010 resulted primarily from:

• a decrease in the Non-life underwriting result of $768 million, primarily driven by large catastrophic losses related to the Japan Earthquake, New Zealand Earthquake, U.S. tornadoes, Australian Floods and aggregate contracts covering losses in Australia and New Zealand in 2011, partially offset by an increase in net favorable prior year loss development, compared to large catastrophic losses related to the Chile Earthquake and a large loss related to Deepwater Horizon in 2010;

• a decrease in pre-tax net realized and unrealized investment gains of $225 million; and

• a decrease in net investment income of $38 million; partially offset by

• a decrease in other corporate operating expenses of $45 million, primarily driven by the charges related to the Company’s voluntary termination plan in the six months ended June 30, 2010; and

• an improvement in the Life underwriting result of $30 million.

Review of Net Income (Loss)

Management analyzes the Company’s net income in three parts: underwriting result, investment result and other components of net income (loss). Underwriting result consists of net premiums earned and other income or loss less losses and loss expenses and life policy benefits, acquisition costs and other operating expenses. Investment result consists of net investment income, net realized and unrealized investment gains or losses and interest in earnings or losses of equity investments. Net investment income includes interest and dividends, net of investment expenses, generated by the Company’s investment activities, as well as interest income generated on funds held assets. Net realized and unrealized investment gains or losses include sales of the Company’s fixed income, equity and other invested assets and investments underlying the funds held – directly managed account and changes in net unrealized gains or losses. Interest in earnings or losses of equity investments includes the Company’s strategic investments. Other components of net income or loss include technical result and other income or loss, other operating expenses, interest expense, amortization of intangible assets, net foreign exchange gains or losses and income tax expense or benefit.

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The components of net income (loss) for the three months and six months ended June 30, 2011 and 2010 were as follows (in millions of U.S. dollars):

	For the three months ended June 30, 2011			% Change 2011 over 2010			For the three months ended June 30, 2010			For the six months ended June 30, 2011			% Change 2011 over 2010			For the six months ended June 30, 2010
Underwriting result:
Non-life	$	(15	)		NM	%	$	95		$	(839	)		NM	%	$	(71	)
Life		(4	)		(88	)		(33	)		(7	)		(80	)		(37	)
Investment result:
Net investment income		158			(9	)		174			310			(11	)		348
Net realized and unrealized investment gains (losses)		78			70			46			(34	)		NM			191
Interest in (losses) earnings of
equity investments(1)		(1	)		NM			1			—			NM			4
Corporate and Other:
Technical result(2)		(1	)		NM			1			(1	)		NM			1
Other income (loss)(2)		1			NM			(1	)		1			NM			(1	)
Other operating expenses		(30	)		(56	)		(65	)		(56	)		(45	)		(101	)
Interest expense		(12	)		(5	)		(13	)		(24	)		23			(20	)
Amortization of intangible assets(3)		(9	)		17			(8	)		(18	)		42			(13	)
Net foreign exchange gains		9			(21	)		11			9			(36	)		15
Income tax expense		(50	)		182			(17	)		(24	)		(47	)		(45	)
Net income (loss)	$	124			(35	)	$	191		$	(683	)		NM		$	271

(1) Interest in earnings or loss of equity investments represents the Company’s aggregate share of earnings or losses related to several private placement investments and limited partnerships within the Corporate and Other segment.

(2) Technical result and other income primarily relate to income on insurance-linked securities and principal finance transactions within the Corporate and Other segment.

(3) Amortization of intangible assets relates to intangible assets acquired in the acquisition of Paris Re in 2009.

Underwriting result is a measurement that the Company uses to manage and evaluate its Non-life and Life segments, as it is a primary measure of underlying profitability for the Company’s core reinsurance operations, separate from the investment results. The Company believes that in order to enhance the understanding of its profitability, it is useful for investors to evaluate the components of net income separately and in the aggregate. Underwriting result should not be considered a substitute for net income and does not reflect the overall profitability of the business, which is also impacted by investment results and other items.

Three-month result

The underwriting result for the Non-life segment decreased by $110 million, from $95 million in the three months ended June 30, 2010 to a loss of $15 million in the same period of 2011. The decrease was primarily attributable to:

• an increase in large catastrophic losses and large losses of $119 million, net of retrocession, reinstatement premiums and related profit commissions, related to the U.S. tornadoes and an aggregate contract covering losses in Australia and New Zealand;

• an increase in net adverse loss development on the prior quarter of $93 million, from net favorable loss development of $38 million in the three months ended June 30, 2010 to net adverse loss development of $55 million in the same period of 2011; and

• an increase of approximately $12 million resulting from declining profitability of the business, a higher level of mid-sized loss activity and a reduced level of premiums earned, which were reduced by a lower level of loss estimates in the credit/surety line of business; partially offset by

• a decrease in losses and loss expenses of $63 million, net of retrocession and reinstatement premiums, related to Deepwater Horizon;

• an increase in net favorable loss development on prior accident years of $40 million, from $121 million in the three months ended June 30, 2010 to $161 million in the same period of 2011. The components of the net favorable loss development are described in more detail in the discussion of individual sub-segments in Results by Segment below; and

• a decrease in other operating expenses of $11 million, primarily driven by lower personnel costs.

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The underwriting result for the Life segment improved from a loss of $33 million in the three months ended June 30, 2010 to a loss of $4 million in the three months ended June 30, 2011. The improvement in the underwriting result was primarily due to a decrease in net adverse prior year loss development. See Results by Segment below.

Net investment income decreased by $16 million to $158 million in the three months ended June 30, 2011 from $174 million in the same period of 2010. The decrease in net investment income of 9% is primarily attributable to a decrease in net investment income from fixed maturities and funds held – directly managed due to lower reinvestment rates, which were partially offset by the purchase of higher yielding investments and foreign exchange fluctuations. See Corporate and Other – Net Investment Income below for more details.

Net realized and unrealized investment gains increased by $32 million, from $46 million in the three months ended June 30, 2010 to $78 million in the same period of 2011. The net realized and unrealized investment gains of $78 million in the three months ended June 30, 2011 were primarily due to declining European and U.S. risk-free interest rates and were partially offset by widening credit spreads. Net realized and unrealized investment gains of $78 million in the three months ended June 30, 2011 primarily consisted of the change in net unrealized investment gains on fixed maturities and short-term investments of $131 million and net realized investment gains on equities, fixed maturities and short-term investments of $39 million, which were partially offset by net realized investment losses on other invested assets, primarily related to treasury note futures, of $63 million and the change in net unrealized investment losses on equities and other invested assets of $37 million. See Corporate and Other – Net Realized and Unrealized Investment Gains (Losses) below for more details on the investment activity.

Other operating expenses included in Corporate and Other decreased by $35 million from $65 million in the three months ended June 30, 2010 to $30 million in the same period of 2011. The decrease was primarily due to the charges related to the Company’s voluntary termination plan in the three months ended June 30, 2010.

Interest expense in the three months ended June 30, 2011 was comparable to the same period in 2010.

Net foreign exchange gains decreased from $11 million in the three months ended June 30, 2010 to $9 million in the same period of 2011. The decrease in net foreign exchange gains during the three months ended June 30, 2011 resulted primarily from a lower gain related to currency movements on certain unhedged equity securities, and was partially offset by the timing of the hedging activities. The Company hedges a significant portion of its currency risk exposure as discussed in Quantitative and Qualitative Disclosures about Market Risk in Item 3 of Part I of this report.

Income tax expense increased by $33 million, from $17 million in the three months ended June 30, 2010 to $50 million in the same period of 2011. The increase in the income tax expense was primarily due to a change in the geographic distribution of the Company’s pre-tax net income. See Corporate and Other – Income Taxes below for more details.

Six-month result

The underwriting result for the Non-life segment decreased by $768 million, from a loss of $71 million in the six months ended June 30, 2010 to a loss of $839 million in the same period of 2011. The decrease was attributable to:

• an increase in large catastrophic losses of $915 million, net of retrocession, reinstatement premiums and profit commissions, related to the Japan Earthquake, New Zealand Earthquake, aggregate contracts covering losses in Australia and New Zealand, U.S. tornadoes and Australian Floods in 2011 compared to the Chile Earthquake in 2010; and

• a decrease of approximately $29 million resulting from the impact of declining profitability of the business and a lower level of net premiums earned, which was reduced by a lower level of loss estimates in the credit/surety line of business; partially offset by

• an increase in net favorable loss development on prior accident years of $89 million, from $214 million in the six months ended June 30, 2010 to $303 million in the same period of 2011. The components of the net favorable loss development are described in more detail in the discussion of individual sub-segments in Results by Segment below;

• a decrease in losses and loss expenses of $63 million, net of retrocession and reinstatement premiums, related to Deepwater Horizon; and

• a decrease in other operating expenses of $23 million, primarily driven by lower personnel costs.

The underwriting result for the Life segment improved from a loss of $37 million in the six months ended June 30, 2010 to a loss of $7 million in the same period of 2011. The improvement in the underwriting result was primarily due to a decrease in net adverse prior year loss development. See Results by Segment below.

Net investment income decreased by $38 million to $310 million in the six months ended June 30, 2011 compared to $348 million in the same period of 2010. The decrease in net investment income of 11% is primarily attributable to a decrease in net investment income from fixed maturities and funds held – directly managed due to lower reinvestment rates and a lower level of fixed

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maturities held, on average, in the six months ended June 30, 2011, which were partially offset by the purchase of higher yielding investments. See Corporate and Other – Net Investment Income below for more details.

Net realized and unrealized investment gains decreased by $225 million, from $191 million in the six months ended June 30, 2010 to a loss of $34 million in the same period of 2011. The net realized and unrealized investment losses of $34 million in the six months ended June 30, 2011 were primarily due to losses on treasury note futures, losses on insurance-linked securities impacted by the Japan Earthquake and a modest increase in European and U.S. risk-free interest rates, which were partially offset by improvements in worldwide equity markets. Net realized and unrealized investment losses of $34 million in the six months ended June 30, 2011 primarily consisted of net realized investment losses on other invested assets (mainly related to treasury note futures) of $51 million, the change in net unrealized investment losses on other invested assets, equities, fixed maturities and short-term investments of $69 million, which were partially offset by net realized investment gains on equities, fixed maturities and short-term investments of $84 million. See Corporate and Other – Net Realized and Unrealized Investment Gains (Losses) below for more details on the investment activity.

Other operating expenses included in Corporate and Other decreased by $45 million from $101 million in the six months ended June 30, 2010 to $56 million in the same period of 2011. The decrease was primarily due to the charges related to the Company’s voluntary termination plan in the six months ended June 30, 2010, as well as lower personnel costs in the 2011 period.

Interest expense increased by $4 million in the six months ended June 30, 2011 compared to the same period in 2010 primarily due to interest related to the issuance of $500 million 5.500% Senior Notes in March 2010, which was not outstanding for the entire period during the six months ended June 30, 2010.

Net foreign exchange gains decreased from $15 million in the six months ended June 30, 2010 to $9 million in the same period of 2011. The decrease in net foreign exchange gains during the six months ended June 30, 2011 resulted primarily from the impact of currency movements on certain unhedged equity securities, partially offset by the timing of the hedging activities and the difference in the forward points embedded in the Company’s hedges. The Company hedges a significant portion of its currency risk exposure as discussed in Quantitative and Qualitative Disclosures about Market Risk in Item 3 of Part I of this report.

Income tax expense decreased by $21 million, from $45 million in the six months ended June 30, 2010 to $24 million in the same period of 2011. The decrease in the income tax expense was primarily due to the decrease in pre-tax net realized and unrealized investment gains in the six months ended June 30, 2011 compared to the same period of 2010 and the geographic distribution of pre-tax net income. See Corporate and Other – Income Taxes below for more details.

Results by Segment

The Company monitors the performance of its operations in three segments, Non-life, Life and Corporate & Other. The Non-life segment is further divided into four sub-segments, North America, Global (Non-U.S.) Property and Casualty (Global (Non-U.S.) P&C), Global (Non-U.S.) Specialty and Catastrophe. Segments and sub-segments represent markets that are reasonably homogeneous in terms of geography, client types, buying patterns, underlying risk patterns and approach to risk management. See Note 22 to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 for additional information concerning the Company’s segments and sub-segments.

Following the completion of the Company’s integration of Paris Re into its other Non-life sub-segments, and to reflect other changes in management responsibilities for certain lines of business and treaties, the Company redefined its financial reporting segments. The comparative data that was previously presented in the Company’s Form 10-Q for the three months ended June 30, 2010 has been recast to conform to the current period presentation.

Segment results are shown before intercompany transactions. Business reported in the Global (Non-U.S.) P&C and Global (Non-U.S.) Specialty sub-segments and the Life segment is, to a significant extent, denominated in foreign currencies and is reported in U.S. dollars at the average foreign exchange rates for each period. The U.S. dollar has fluctuated against the euro and other currencies in the three months and six months ended June 30, 2011 compared to the same periods in 2010 and this should be considered when making period to period comparisons.

Non-life Segment

North America

The North America sub-segment is comprised of lines of business that are considered to be either short, medium or long-tail. The short-tail lines consist of agriculture, property and proportional motor business and represented 49% and 43% of net premiums written in this sub-segment in the three months and six months ended June 30, 2011, respectively. Casualty and non-proportional motor business are considered to be long-tail and represented 41% and 43% of net premiums written in the three months and six

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months ended June 30, 2011, respectively, while credit/surety and multiline are considered by the Company to have a medium-tail and accounted for the balance of net premiums written in this sub-segment. The casualty line represented approximately 40% and 41% of net premiums written in this sub-segment in the three months and six months ended June 30, 2011, respectively. This line typically tends to have a higher loss ratio and a lower technical result, due to the long-tail nature of the risks involved. Casualty treaties typically provide for investment income on premiums invested over a longer period as losses are typically paid later than for other lines. Investment income, however, is not considered in the calculation of technical result.

The following table provides the components of the technical result and the corresponding ratios for this sub-segment for the three months and six months ended June 30, 2011 and 2010 (in millions of U.S. dollars):

	For the three months ended June 30, 2011			% Change 2011 over 2010			For the three months ended June 30, 2010			For the six months ended June 30, 2011			% Change 2011 over 2010			For the six months ended June 30, 2010
Gross premiums written	$	242			17	%	$	207		$	581			3	%	$	564
Net premiums written		242			17			207			581			3			564
Net premiums earned	$	261			17		$	223		$	521			6		$	491
Losses and loss expenses		(190	)		64			(116	)		(365	)		23			(296	)
Acquisition costs		(63	)		(8	)		(69	)		(129	)		(6	)		(137	)
Technical result(1)	$	8			(79	)	$	38		$	27			(53	)	$	58
Loss ratio(2)		72.8	%					52.2	%		70.0	%					60.2	%
Acquisition ratio(3)		24.1						30.7			24.8						28.0
Technical ratio(4)		96.9	%					82.9	%		94.8	%					88.2	%

(1) Technical result is defined as net premiums earned less losses and loss expenses and acquisition costs.

(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.

Premiums

The North America sub-segment represented 23% of total net premiums written in the three months and six months ended June 30, 2011 compared to 19% of total net premiums written during the same periods in 2010. The increase in the North America sub-segment’s net premiums written as a percentage of total net premiums written was mainly due to higher net premiums written in this sub-segment, primarily in the agriculture line of business as described below, and the decreases in net premiums written in the Company’s other Non-life sub-segments.

Three-month result

Gross and net premiums written and net premiums earned increased by 17% in the three months ended June 30, 2011 compared to the same period in 2010. The increase in gross and net premiums written and net premiums earned was primarily attributable to the agriculture line of business and, to a lesser extent, the casualty line of business. The increase in the agriculture line of business was mainly driven by increased demand and higher agricultural commodity prices in the three months ended June 30, 2011 and significant downward premium adjustments and higher cedant retentions in the three months ended June 30, 2010. The casualty line benefitted from new business written during 2011. These increases in gross and net premiums written and net premiums earned were partially offset by decreases in the structured risk line, due to the expiry of a significant treaty, and in the property line, driven by the cancellation of a large treaty and lower renewals due to increased retentions and reductions in pricing.

Six-month result

Gross and net premiums written increased by 3% and net premiums earned increased by 6% in the six months ended June 30, 2011 compared to the same period in 2010. The increase in gross and net premiums written and net premiums earned was primarily attributable to the agriculture line and, to a lesser extent, the casualty line due to the reasons described in the three-month result. These increases were partially offset by decreases in the property and structured risk lines of business, due to the reasons described in the three-month result, and higher downward premium adjustments reported by cedants in the six months ended June 30, 2011, primarily in the motor and casualty lines of business. The increase in net premiums earned was higher than the increase in gross and net premiums written due to the favorable impact of the business written in prior years. Notwithstanding the declining market conditions, higher retentions and the competition prevailing in certain lines of business and markets of this sub-segment, the Company was able to write business that met its portfolio objectives.

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Losses and loss expenses and loss ratio

Three-month result

The losses and loss expenses and loss ratio reported in the three months ended June 30, 2011 reflected:

• large catastrophic losses related to the U.S. tornadoes of $45 million, or 17.0 points on the loss ratio;

• net favorable loss development on prior accident years of $55 million, or 20.9 points on the loss ratio;

• net favorable loss development on the prior quarter of $5 million, or 1.8 points on the loss ratio, related to the Japan Earthquake;

• a higher level of mid-sized loss activity; and

• an increase in the book of business and exposure as evidenced by the increase in net premiums earned.

The net favorable loss development of $55 million reported in the three months ended June 30, 2011 included net favorable development for prior accident years in most lines of business, predominantly in the casualty line, while the motor and credit/surety lines experienced combined adverse loss development for prior accident years of $7 million. Loss information provided by cedants in the three months ended June 30, 2011 for prior accident years was lower than the Company expected (higher for motor and credit/surety) and included no individually significant losses or reductions but a series of attritional losses or reductions. Based on the Company’s assessment of this loss information, the Company decreased its expected ultimate loss ratios for most lines of business (increased for motor and credit/surety), which had the net effect of decreasing (increasing for motor and credit/surety) prior year loss estimates.

The losses and loss expenses and loss ratio reported in the three months ended June 30, 2010 reflected:

• no large catastrophic losses;

• losses and loss expenses related to Deepwater Horizon of $5 million, or 2.2 points on the loss ratio;

• net favorable loss development on prior accident years of $53 million, or 23.8 points on the loss ratio;

• net favorable loss development on the prior quarter of $19 million, or 8.7 points on the loss ratio, primarily driven by significant downward premium adjustments in the agriculture line of business; and

• a decrease in the book of business and exposure.

The net favorable loss development of $53 million reported in the three months ended June 30, 2010 included net favorable loss development for prior accident years in the agriculture and casualty lines of business, while the motor, credit/surety and property lines experienced combined adverse loss development for prior accident years of $8 million.

The increase of $74 million in losses and loss expenses for the three months ended June 30, 2011 compared to the same period in 2010 included:

• an increase of $45 million in large catastrophic losses;

• a decrease of $14 million in net favorable prior quarter loss development; and

• an increase of $20 million in losses and loss expenses resulting from an increase in the book of business and exposure, a higher level of mid-sized loss activity and the impact of declining pricing on the profitability of the business between periods; partially offset by

• a decrease of $5 million in losses and loss expenses related to Deepwater Horizon.

Six-month result

The losses and loss expenses and loss ratio reported in the six months ended June 30, 2011 reflected:

• large catastrophic losses related to the U.S. tornadoes and the Japan Earthquake of $53 million, or 10.1 points on the loss ratio;

• net favorable loss development on prior accident years of $95 million, or 18.1 points on the loss ratio; and

• an increase in the book of business and exposure.

The net favorable loss development of $95 million reported in the six months ended June 30, 2011 included net favorable development for prior accident years in most lines of business, predominantly in the casualty line, while the motor and credit/surety lines experienced adverse loss development of $7 million. Loss information provided by cedants in the six months ended June 30, 2011 for prior accident years was lower than the Company expected (higher for motor and credit/surety) and included no individually significant losses or reductions but a series of attritional losses or reductions. Based on the Company’s assessment of this loss information, the Company decreased (increased for motor and credit/surety) its expected ultimate loss ratios for most lines of business, which had the net effect of decreasing (increasing for motor and credit/surety) prior year loss estimates.

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The losses and loss expenses and loss ratio reported in the six months ended June 30, 2010 reflected:

• large catastrophic losses related to the Chile Earthquake of $6 million, or 1.2 points on the loss ratio;

• losses and loss expenses related to Deepwater Horizon of $5 million, or 1.0 points on the loss ratio;

• net favorable loss development on prior accident years of $76 million, or 15.6 points on the loss ratio; and

• a decrease in the book of business and exposure.

The net favorable loss development of $76 million reported in the six months ended June 30, 2010 included net favorable loss development for prior accident years in most lines of business, predominantly in the casualty and agriculture lines, while the motor and credit/surety lines experienced combined adverse loss development for prior accident years of $8 million.

The increase of $69 million in losses and loss expenses for the six months ended June 30, 2011 compared to the same period in 2010 included:

• an increase of $47 million in large catastrophic losses; and

• an increase of $46 million in losses and loss expenses resulting from an increase in the book of business and exposure and the impact of declining pricing on the profitability of the business between periods; partially offset by

• an increase of $19 million in net favorable prior year loss development; and

• a decrease of $5 million in losses and loss expenses related to Deepwater Horizon.

Acquisition costs and acquisition ratio

Three-month and six-month result

Acquisition costs and the acquisition ratio decreased in the three months and six months ended June 30, 2011 compared to the same periods in 2010 as a result of an increase in net premiums earned in the agriculture line of business, which carries a lower acquisition ratio, and a reduction in profit commissions related to a treaty impacted by the U.S. tornadoes.

Technical result and technical ratio

Three-month result

The decrease of $30 million in the technical result and the corresponding increase in the technical ratio in the three months ended June 30, 2011 was primarily attributable to an increase of $39 million, net of related profit commissions, in large catastrophic losses, a higher level of mid-sized loss activity and a decrease of $14 million in net favorable prior quarter loss development. These decreases in the technical result were partially offset by a decrease in the acquisition ratio as a result of the increase in agriculture net premiums earned, a decrease of $5 million in losses and loss expenses related to Deepwater Horizon and declining profitability of the business between periods.

Six-month result

The decrease of $31 million in the technical result and the corresponding increase in the technical ratio in the six months ended June 30, 2011 was primarily attributable to an increase of $41 million, net of related profit commissions, in large catastrophic losses and declining profitability of the business. These decreases in the technical result were partially offset by an increase of $19 million in net favorable prior year loss development, a decrease in the acquisition ratio as a result of the increase in agriculture net premiums earned, a decrease of $5 million in losses and loss expenses related to Deepwater Horizon and normal fluctuations in net premiums earned between periods.

Global (Non-U.S.) P&C

The Global (Non-U.S.) P&C sub-segment is composed of short-tail business, in the form of property and proportional motor business, that represented approximately 94% and 83% of net premiums written in this sub-segment in the three months and six months ended June 30, 2011, respectively, and long-tail business, in the form of casualty and non-proportional motor business, that represented the balance of net premiums written.

The following table provides the components of the technical result and the corresponding ratios for this sub-segment for the three months and six months ended June 30, 2011 and 2010 (in millions of U.S. dollars):

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	For the three months ended June 30, 2011			% Change 2011 over 2010			For the three months ended June 30, 2010			For the six months ended June 30, 2011			% Change 2011 over 2010			For the six months ended June 30, 2010
Gross premiums written	$	122			(35	)%	$	189		$	440			(30	)%	$	633
Net premiums written		121			(35	)		186			437			(30	)		621
Net premiums earned	$	193			(16	)	$	231		$	374			(19	)	$	461
Losses and loss expenses		(127	)		(10	)		(141	)		(277	)		(29	)		(387	)
Acquisition costs		(53	)		(13	)		(61	)		(93	)		(18	)		(114	)
Technical result	$	13			(56	)	$	29		$	4			NM		$	(40	)
Loss ratio		65.9	%					61.1	%		74.0	%					84.0	%
Acquisition ratio		27.6						26.4			25.0						24.6
Technical ratio		93.5	%					87.5	%		99.0	%					108.6	%

Premiums

The Global (Non-U.S.) P&C sub-segment represented 12% and 17% of total net premiums written in the three months and six months ended June 30, 2011, respectively, compared to 17% and 22% of total net premiums written during the same periods in 2010. The decrease in the Global (Non-U.S.) P&C sub-segment’s net premiums written as a percentage of total net premiums written was primarily due to the effects of the Company’s decision to cancel or reduce business as a result of decreases in pricing and the repositioning of the Company’s portfolio, as described below. The decrease in this sub-segment’s net premiums written is also due to a significant percentage of this sub-segment’s business being written on a proportional basis, with the effects of the decision to reduce or cancel business recognized in premiums written on a quarterly basis over the coverage periods of the underlying treaties.

Three-month result

Gross and net premiums written decreased by 35% and net premiums earned decreased by 16% in the three months ended June 30, 2011 compared to the same period in 2010. The decreases in gross and net premiums written and net premiums earned resulted from all lines of business and were mainly driven by the effects of the Company’s decision to cancel or reduce business as a result of reductions in pricing, the repositioning of the Company’s portfolio following the integration of Paris Re’s business, which included reducing catastrophe-exposed business in the property line, and higher cedant retentions. The decreases in gross and net premiums written and net premiums earned were partially offset by the weaker U.S. dollar in the three months ended June 30, 2011 compared to the same period in 2010, as the premiums denominated in currencies that have appreciated against the U.S. dollar were converted into U.S. dollars at higher average exchange rates. Foreign exchange fluctuations increased gross and net premiums written and net premiums earned by 6%. The decrease in net premiums earned was lower than the decreases in gross and net premiums written primarily due to the earning of business in the three months ended June 30, 2011 that was written in 2010.

Six-month result

Gross and net premiums written decreased by 30% and net premiums earned decreased by 19% in the six months ended June 30, 2011 compared to the same period in 2010. The decreases in gross and net premiums written and net premiums earned resulted from all lines of business due to the reasons described in the three-month result above. The decrease in net premiums earned was lower than the decreases in gross and net premiums written primarily due to the earning of business in the six months ended June 30, 2011 that was written in 2010. Notwithstanding the increased competition and overall declines in pricing prevailing in certain lines of business and markets of this sub-segment, the Company was able to write business that met its portfolio objectives.

Losses and loss expenses and loss ratio

Three-month result

The losses and loss expenses and loss ratio reported in the three months ended June 30, 2011 reflected:

• no large catastrophic losses;

• net favorable loss development on prior accident years of $22 million, or 11.5 points on the loss ratio;

• net adverse loss development on the prior quarter of $4 million, or 2.0 points on the loss ratio, which was driven by adverse development of $6 million, or 3.1 points on the loss ratio, related to the Australian Floods, Japan Earthquake and New Zealand Earthquake; and

• a decrease in the book of business and exposure and declines in pricing.

The net favorable loss development of $22 million reported in the three months ended June 30, 2011 included net favorable development for prior accident years in all lines of business, but was most pronounced in the motor line. Loss information provided by

41

cedants in the three months ended June 30, 2011 for prior accident years was lower than the Company expected and included no individually significant losses or reductions but a series of attritional losses or reductions. Based on the Company’s assessment of this loss information, the Company decreased its expected ultimate loss ratios for all lines of business, which had the net effect of decreasing prior year loss estimates.

The losses and loss expenses and loss ratio reported in the three months ended June 30, 2010 reflected:

• no large catastrophic losses;

• net favorable loss development on prior accident years of $25 million, or 11.0 points on the loss ratio; and

• net adverse loss development on the prior quarter of $13 million, or 5.6 points on the loss ratio, which was driven by adverse development of $20 million, or 8.7 points on the loss ratio, related to the Chile Earthquake.

The net favorable loss development of $25 million reported in the three months ended June 30, 2010 included net favorable development for prior accident years in all lines of business.

The decrease of $14 million in losses and loss expenses for the three months ended June 30, 2011 compared to the same period in 2010 included:

• a decrease of $9 million in net adverse prior quarter loss development; and

• a decrease of approximately $8 million in losses and loss expenses resulting from a decrease in the book of business and exposure, which was reduced by the impact of declining pricing on the profitability of the business between periods; partially offset by

• a decrease of $3 million in net favorable prior year loss development.

Six-month result

The losses and loss expenses and loss ratio reported in the six months ended June 30, 2011 reflected:

• large catastrophic losses related to the Japan Earthquake, New Zealand Earthquake and Australian Floods of $52 million, or 14.0 points on the loss ratio;

• net favorable loss development on prior accident years of $54 million, or 14.6 points on the loss ratio; and

• a decrease in the book of business and exposure and declines in pricing.

The net favorable loss development of $54 million reported in the six months ended June 30, 2011 included net favorable development for prior accident years in all lines of business, but was most pronounced in the motor line. Loss information provided by cedants in the six months ended June 30, 2011 for prior accident years was lower than the Company expected and included no individually significant losses or reductions but a series of attritional losses or reductions. Based on the Company’s assessment of this loss information, the Company decreased its expected ultimate loss ratios for all lines of business, which had the net effect of decreasing prior year loss estimates.

The losses and loss expenses and loss ratio reported in the six months ended June 30, 2010 reflected:

• large catastrophic losses related to the Chile Earthquake of $124 million, or 26.9 points on the loss ratio; and

• net favorable loss development on prior accident years of $59 million, or 12.8 points on the loss ratio.

The net favorable loss development of $59 million reported in the six months ended June 30, 2010 included net favorable development for prior accident years in all lines of business, particularly in the property line.

The decrease of $110 million in losses and loss expenses for the six months ended June 30, 2011 compared to the same period in 2010 included:

• a decrease of $72 million in large catastrophic losses; and

• a decrease of approximately $43 million in losses and loss expenses resulting from a decrease in the book of business and exposure, which was reduced by the impact of declining pricing on the profitability of the business between periods; partially offset by

• a decrease of $5 million in net favorable prior year loss development.

Acquisition costs and acquisition ratio

Three-month result

Acquisition costs decreased in the three months ended June 30, 2011 compared to the same period in 2010 primarily as a result of lower net premiums earned. The increase in the acquisition ratio in the three months ended June 30, 2011 compared to the same period in 2010 was primarily due to higher profit commission adjustments.

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Six-month result

Acquisition costs decreased in the six months ended June 30, 2011 compared to the same period in 2010 primarily as a result of lower net premiums earned. The increase in the acquisition ratio in the six months ended June 30, 2011 compared to the same period in 2010 was primarily due to higher profit commission adjustments.

Technical result and technical ratio

Three-month result

The decrease of $16 million in the technical result and the corresponding increase in the technical ratio in the three months ended June 30, 2011 compared to the same period in 2010 was primarily attributable to declining profitability and net premiums earned between periods, partially offset by a decrease of $6 million in combined net adverse prior quarter and net favorable prior year loss development.

Six-month result

The increase of $44 million in the technical result and the corresponding decrease in the technical ratio in the six months ended June 30, 2011 compared to the same period in 2010 was primarily attributable to a decrease of $71 million, net of reinstatement premiums, in large catastrophic losses, which was partially offset by declining profitability and net premiums earned between periods and a decrease of $5 million in net favorable prior year loss development.

Global (Non-U.S.) Specialty

The Global (Non-U.S.) Specialty sub-segment is primarily comprised of lines of business that are considered to be either short or medium-tail. The short-tail lines consist of agriculture, energy and specialty property and represented 25% and 21% of net premiums written in this sub-segment in the three months and six months ended June 30, 2011, respectively. Aviation/space, credit/surety, engineering and marine are considered by the Company to have a medium-tail and represented 67% and 66%, respectively, of net premiums written, while specialty casualty is considered to be long-tail and accounted for the balance of net premiums written in this sub-segment in the three months and six months ended June 30, 2011.

The following table provides the components of the technical result and the corresponding ratios for this sub-segment for the three months and six months ended June 30, 2011 and 2010 (in millions of U.S. dollars):

	For the three months ended June 30, 2011			% Change 2011 over 2010			For the three months ended June 30, 2010			For the six months ended June 30, 2011			% Change 2011 over 2010			For the six months ended June 30, 2010
Gross premiums written	$	350			(6	)%	$	371		$	724			(18	)%	$	880
Net premiums written		333			(6	)		355			648			(20	)		811
Net premiums earned	$	341			(9	)	$	376		$	658			(8	)	$	713
Losses and loss expenses		(206	)		(29	)		(292	)		(427	)		(28	)		(595	)
Acquisition costs		(78	)		(5	)		(82	)		(158	)		8			(146	)
Technical result	$	57			NM		$	2		$	73			NM		$	(28	)
Loss ratio		60.3	%					77.6	%		64.9	%					83.4	%
Acquisition ratio		22.9						21.9			24.0						20.5
Technical ratio		83.2	%					99.5	%		88.9	%					103.9	%

Premiums

The Global (Non-U.S.) Specialty sub-segment represented 31% and 26% of total net premiums written in the three months and six months ended June 30, 2011, respectively, compared to 32% and 28% of total net premiums written during the same periods in 2010. The decrease in the Global (Non-U.S.) Specialty sub-segment’s net premiums written as a percentage of total net premiums written was primarily due to the effects of the Company’s decision to cancel or reduce business as a result of modestly reduced pricing in certain lines of business and the repositioning of the Company’s portfolio, as described below. The decrease in the sub-segment’s net premiums written is also due to a significant percentage of this sub-segment’s business being written on a proportional basis, with the effects of the decision to reduce or cancel business recognized in premiums written on a quarterly basis over the coverage periods of the underlying treaties.

Three-month result

Gross and net premiums written decreased by 6% and net premiums earned decreased by 9% in the three months ended June 30, 2011 compared to the same period in 2010. The decrease in gross and net premiums written and net premiums earned resulted from

43

most lines of business and was primarily driven by the effects of the Company’s decision to cancel or reduce business as a result of modest reductions in pricing in certain lines of business and the repositioning of the Company’s portfolio following the integration of Paris Re’s business. These decreases were partially offset by new business written in the marine and specialty property lines of business, share increases in the credit/surety line of business and the impact of the weaker U.S. dollar in the three months ended June 30, 2011 compared to the same period in 2010. Foreign exchange fluctuations increased gross premiums written by 4% and net premiums written and earned by 5%.

Six-month result

Gross and net premiums written and net premiums earned decreased by 18%, 20% and 8% in the six months ended June 30, 2011 compared to the same period in 2010. The decrease in gross and net premiums written resulted from most lines of business due to reasons described in the three-month result above. The decrease in gross and net premiums written was also due to an increase in the distribution of premiums written towards proportional business, where the Company generally recognizes premiums written over the coverage period compared to generally recognizing premiums written in full at the inception date of the contract for non-proportional business. These decreases were partially offset by an increase in upward premium adjustments reported by cedants in the six months ended June 30, 2011 compared to the same period in 2010, which were primarily driven by the energy and engineering lines of business, new business written in the marine and specialty property lines of business and share increases in the credit/surety line of business. The decrease in net premiums earned was driven by the same factors as the decreases in gross and net premiums written. The decrease in net premiums earned was lower than the decreases in gross and net premiums written primarily due to the earning of business in the six months ended June 30, 2011 that was written in 2010. Notwithstanding the diverse conditions prevailing in various markets within this sub-segment, with terms in most markets soft, the Company was able to write business that met its portfolio objectives.

Losses and loss expenses and loss ratio

Three-month result

The losses and loss expenses and loss ratio reported in the three months ended June 30, 2011 reflected:

• large catastrophic losses related to the U.S. tornadoes of $15 million, or 4.5 points on the loss ratio;

• net favorable loss development on prior accident years of $58 million, or 16.9 points on the loss ratio; and

• a decrease in the book of business and exposure and modest declines in pricing in certain lines of business.

The net favorable loss development of $58 million reported in the three months ended June 30, 2011 included net favorable development for prior accident years in all lines of business. Loss information provided by cedants in the three months ended June 30, 2011 for prior accident years was lower than the Company expected and included no individually significant losses or reductions but a series of attritional losses or reductions. Based on the Company’s assessment of this loss information, the Company decreased its expected ultimate loss ratios, which had the net effect of decreasing prior year loss estimates.

The losses and loss expenses and loss ratio reported in the three months ended June 30, 2010 reflected:

• no large catastrophic losses;

• losses and loss expenses related to Deepwater Horizon of $61 million, or 15.8 points on the loss ratio;

• net favorable loss development on prior accident years of $32 million, or 8.5 points on the loss ratio;

• net favorable loss development on the prior quarter of $10 million, or 2.5 points on the loss ratio;

• increasing loss trends in the specialty casualty line of business; and

• an increase in the book of business and exposure.

The net favorable loss development of $32 million reported in the three months ended June 30, 2010 included net favorable development for prior accident years in all lines of business, except specialty casualty, which experienced adverse loss development for prior accident years of $13 million.

The decrease of $86 million in losses and loss expenses for the three months ended June 30, 2011 compared to the same period in 2010 included:

• a decrease in losses and loss expenses of $61 million related to Deepwater Horizon;

• an increase of $26 million in net favorable prior year loss development; and

• a decrease of $24 million in losses and loss expenses resulting from a decrease in the book of business and exposure, which was reduced by the impact of declining profitability of the business in certain lines of business between periods; partially offset by

• an increase of $15 million in large catastrophic losses; and

• a decrease of $10 million in net favorable prior quarter loss development.

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Six-month result

The losses and loss expenses and loss ratio reported in the six months ended June 30, 2011 reflected:

• large catastrophic losses related to the Japan Earthquake, U.S. tornadoes, Australian Floods and New Zealand Earthquake of $43 million, or 6.5 points on the loss ratio;

• net favorable loss development on prior accident years of $93 million, or 14.0 points on the loss ratio;

• a higher level of mid-sized loss activity; and

• a decrease in the book of business and exposure and declines in pricing in certain lines of business.

The net favorable loss development of $93 million reported in the six months ended June 30, 2011 included net favorable loss development for prior accident years in most lines of business, except for energy, engineering and agriculture, which experienced combined adverse loss development for prior accident years of $12 million. Loss information provided by cedants in the six months ended June 30, 2011 for prior accident years was lower than the Company expected (higher for energy, engineering and agriculture) and included no individually significant losses or reductions but a series of attritional losses or reductions. Based on the Company’s assessment of this loss information, the Company decreased (increased for energy, engineering and agriculture) its expected ultimate loss ratios, which had the net effect of decreasing (increasing for energy, engineering and agriculture) prior year loss estimates.

The losses and loss expenses and loss ratio reported in the six months ended June 30, 2010 reflected:

• large catastrophic losses related to the Chile Earthquake of $59 million, or 8.4 points on the loss ratio;

• losses and loss expenses related to Deepwater Horizon of $61 million, or 8.3 points on the loss ratio;

• net favorable loss development on prior accident years of $48 million, or 6.7 points on the loss ratio;

• increasing loss trends in the specialty casualty line of business; and

• a decrease in the book of business and exposure.

The net favorable loss development of $48 million reported in the six months ended June 30, 2010 included net favorable development for prior accident years in all lines of business, except specialty casualty, which experienced adverse loss development for prior accident years of $50 million.

The decrease of $168 million in losses and loss expenses for the six months ended June 30, 2011 compared to the same period in 2010 included:

• a decrease in losses and loss expenses of $61 million related to Deepwater Horizon;

• a decrease of $46 million in losses and loss expenses resulting from a lower level of loss estimates in the credit/surety line related to the financial crisis and a decrease in the book of business and exposure, which was reduced by the impact of declining profitability of the business in certain lines of business between periods and a higher level of mid-sized loss activity;

• an increase of $45 million in net favorable prior year loss development; and

• a decrease of $16 million related to large catastrophic losses.

Acquisition costs and acquisition ratio

Three-month result

Acquisition costs decreased in the three months ended June 30, 2011 compared to the same period in 2010 primarily due to lower net premiums earned. The increase in the acquisition ratio in the three months ended June 30, 2011 was driven by a shift towards proportional business and a shift in the mix of business towards the credit/surety line of business, both of which generally carry a relatively higher acquisition ratio compared to non-proportional business and other lines.

Six-month result

Acquisition costs and the acquisition ratio increased in the six months ended June 30, 2011 compared to the same period in 2010. The increases were primarily due to the same reasons as described in the three-month result, as well as higher profit commission adjustments reported by cedants in the six months ended June 30, 2011 in the credit/surety line of business, compared to a release of a premium deficiency in the credit/surety line of business in the six months ended June 30, 2010.

Technical result and technical ratio

Three-month result

The increase of $55 million in the technical result and the corresponding decrease in the technical ratio in the three months ended June 30, 2011 compared to the same period in 2010 was primarily attributable to a decrease in losses and loss expenses of $58 million, net of retrocession and reinstatement premiums, related to Deepwater Horizon, an increase of $26 million in net favorable prior year loss development and a lower level of loss estimates in the credit/surety line of business related to the financial crisis. These increases in the technical result were partially offset by an

45

increase of $15 million in large catastrophic losses, a decrease of $10 million in net favorable prior quarter loss development, declining profitability in certain lines of business and net premiums earned between periods.

Six-month result

The increase of $101 million in the technical result and the corresponding decrease in the technical ratio in the six months ended June 30, 2011 compared to the same period in 2010 was primarily attributable to a decrease in losses and loss expenses of $58 million, net of retrocession and reinstatement premiums, related to Deepwater Horizon, an increase of $45 million in net favorable prior year loss development, a decrease of $17 million, net of reinstatement premiums, in large catastrophic losses and a lower level of loss estimates in the credit/surety line of business related to the financial crisis. These increases in the technical result were partially offset by declining profitability in certain lines of business and net premiums earned between periods, a higher level of mid-sized loss activity and higher acquisition costs.

Catastrophe

The Catastrophe sub-segment writes business predominantly on a non-proportional basis and is exposed to volatility resulting from catastrophic losses. Thus, profitability in any one quarter or year is not necessarily predictive of future profitability. The results for the three months and six months ended June 30, 2011 and 2010 demonstrate this volatility. The results for the three months and six months ended June 30, 2011 contained a significantly higher level of catastrophe losses related to the Japan Earthquake, New Zealand Earthquake, U.S. tornadoes, Australian Floods and aggregate contracts covering losses in Australia and New Zealand than the same periods of 2010. The results for the three months ended June 30, 2010 included no large catastrophic losses and the results for the six months ended June 30, 2010 included a large level of catastrophe losses related to the Chile Earthquake. The varying amounts of catastrophic losses significantly impacted the technical result and ratio and affected year over year comparisons as discussed below.

The following table provides the components of the technical result and the corresponding ratios for this sub-segment for the three months and six months ended June 30, 2011 and 2010 (in millions of U.S. dollars):

	For the three months ended June 30, 2011			% Change 2011 over 2010			For the three months ended June 30, 2010			For the six months ended June 30, 2011			% Change 2011 over 2010			For the six months ended June 30, 2010
Gross premiums written	$	169			(18	)%	$	206		$	486			(21	)%	$	615
Net premiums written		161			(16	)		191			453			(18	)		550
Net premiums earned	$	110			8		$	101		$	233			(9	)	$	255
Losses and loss expenses		(123	)		NM			13			(1,040	)		646			(140	)
Acquisition costs		(9	)		40			(7	)		(1	)		(97	)		(18	)
Technical result	$	(22	)		NM		$	107		$	(808	)		NM		$	97
Loss ratio		111.7	%					(12.8	)%		446.3	%					54.6	%
Acquisition ratio		8.1						6.3			0.3						7.3
Technical ratio		119.8	%					(6.5	)%		446.6	%					61.9	%

Premiums

The Catastrophe sub-segment represented 15% and 18% of total net premiums written in the three months and six months ended June 30, 2011, respectively, compared to 17% and 19% of total net premiums written during the same periods in 2010.

Three-month result

Gross and net premiums written decreased by 18% and 16%, respectively, and net premiums earned increased by 8% in the three months ended June 30, 2011 compared to the same period in 2010. The decreases in gross and net premiums written resulted primarily from a timing difference between periods related to the renewal of certain Japanese treaties and the Company’s decision to reduce certain catastrophe exposures and reposition its portfolio following the integration of Paris Re’s business. These decreases were partially offset by new business, reinstatement premiums, increases in certain treaty participations and foreign exchange fluctuations. Foreign exchange fluctuations increased gross and net premiums written by 5% and net premiums earned by 8% due to the weaker U.S. dollar in the three months ended June 30, 2011 compared to the same period in 2010. The increase in net premiums earned, while gross and net premiums written decreased, was primarily due to the earning of business written in prior periods and the timing difference that decreased gross and net premiums written, which had a significantly lower impact on net premiums earned between periods.

46

Six-month result

Gross and net premiums written and net premiums earned decreased by 21%, 18% and 9%, respectively, in the six months ended June 30, 2011 compared to the same period in 2010. The decreases in gross and net premiums written and net premiums earned were due to the same reasons described in the three-month result above. The decrease in net premiums earned in the six months ended June 30, 2011 was less pronounced compared to the decrease in gross and net premiums written primarily due to the earning of the business written in prior periods and the timing difference that decreased gross and net premiums written, which had a significantly lower impact on net premiums earned between periods.

Losses and loss expenses and loss ratio

Three-month result

The losses and loss expenses and loss ratio reported in the three months ended June 30, 2011 reflected:

• large catastrophic losses related to the U.S. tornadoes of $36 million, or 30.2 points on the loss ratio;

• losses related to an aggregate contract covering losses in Australia and New Zealand of $33 million, or 30.1 points on the loss ratio;

• net favorable loss development on prior accident years of $26 million, or 24.1 points on the loss ratio; and

• net adverse loss development on the prior quarter of $56 million, or 51.6 points on the loss ratio, driven by adverse loss development of $69 million, or 63.4 points on the loss ratio, related to the New Zealand Earthquake, which was partially offset by favorable loss development of $9 million, or 8.2 points on the loss ratio, related to the Australian Floods.

The net favorable loss development of $26 million reported in the three months ended June 30, 2011 was primarily due to favorable loss emergence, as losses reported by cedants in the three months ended June 30, 2011 for prior accident years were lower than the Company expected. Based on the Company’s assessment of this loss information, the Company decreased its expected ultimate loss ratio, which had the effect of decreasing the level of prior year loss estimates.

The losses and loss expenses and loss ratio reported in the three months ended June 30, 2010 reflected:

• no large catastrophic losses;

• net favorable loss development on the prior quarter of $22 million, or 21.6 points on the loss ratio, which was driven by lower loss estimates of $24 million, or 24.0 points on the loss ratio, related to the Chile Earthquake; and

• net favorable loss development on prior accident years of $11 million, or 10.4 points on the loss ratio.

The increase of $136 million in losses and loss expenses in the three months ended June 30, 2011 compared to the same period in 2010 included:

• an increase of $78 million in net adverse prior quarter loss development;

• an increase of $36 million in large catastrophic losses;

• an increase of $33 million in losses related to an aggregate contract; and

• an increase of $4 million in losses and loss expenses resulting from normal fluctuations in profitability between periods; partially offset by

• an increase of $15 million in net favorable prior year loss development.

Six-month result

The losses and loss expenses and loss ratio reported in the six months ended June 30, 2011 reflected:

• large catastrophic losses related to the Japan Earthquake, New Zealand Earthquake, U.S. tornadoes and Australian Floods of $1,002 million, or 428.0 points on the loss ratio;

• losses related to aggregate contracts covering losses in Australia and New Zealand of $93 million, or 40.1 points on the loss ratio;

• net favorable loss development on prior accident years of $61 million, or 26.4 points on the loss ratio;

• a lower level of mid-sized loss activity; and

• a decrease in the book of business and exposure.

The net favorable loss development of $61 million reported in the six months ended June 30, 2011 was primarily due to favorable loss emergence, as losses reported by cedants in the six months ended June 30, 2011 for prior accident years were lower than the Company expected. Based on the Company’s assessment of this loss information, the Company decreased its expected ultimate loss ratio, which had the effect of decreasing the level of prior year loss estimates.

47

The losses and loss expenses and loss ratio reported in the six months ended June 30, 2010 reflected:

• large catastrophic losses related to the Chile Earthquake of $106 million, or 41.1 points on the loss ratio; and

• net favorable loss development on prior accident years of $31 million, or 12.1 points on the loss ratio.

The increase of $900 million in losses and loss expenses for the six months ended June 30, 2011 compared to the same period in 2010 included:

• an increase of $896 million in large catastrophic losses; and

• an increase of $93 million in losses related to aggregate contracts; partially offset by

• an increase of $30 million in net favorable prior year loss development; and

• a decrease of $59 million in losses and loss expenses resulting from a lower level of mid-sized loss activity, a decrease in the book of business and exposure and normal fluctuations in profitability between periods.

Acquisition costs and acquisition ratio

Three-month result

Acquisition costs increased in the three months ended June 30, 2011 compared to the same period in 2010 primarily due to the increase in net premiums earned. The acquisition ratio increased due to higher commissions related to a ceded reinsurance treaty.

Six-month result

Acquisition costs and the acquisition ratio decreased in the six months ended June 30, 2011 compared to the same period in 2010 primarily due to lower profit commissions as a result of the large catastrophic losses in the six months ended June 30, 2011 compared to the same period in 2010.

Technical result and technical ratio

Three-month result

The decrease of $129 million in the technical result and the corresponding increase in the technical ratio in the three months ended June 30, 2011 compared to the same period in 2010 was primarily due to an increase of $78 million in net adverse prior quarter loss development, an increase of $65 million, net of retrocession and reinstatement premiums, in large catastrophic losses and losses related to an aggregate contract, and normal fluctuations in profitability and net premiums earned between periods. These decreases in the technical result were partially offset by an increase of $15 million in net favorable prior year loss development.

Six-month result

The decrease of $905 million in the technical result and the corresponding increase in the technical ratio in the six months ended June 30, 2011 compared to the same period in 2010 was primarily due to an increase of $962 million, net of retrocession, reinstatement premiums and profit commissions, in large catastrophic losses and losses related to an aggregate contract. These decreases in the technical result were partially offset by an increase of $30 million in net favorable prior year loss development, a lower level of mid-sized loss activity and normal fluctuations in profitability and net premiums earned between periods.

Life Segment

The following table provides the components of the allocated underwriting result for this segment for the three months and six months ended June 30, 2011 and 2010 (in millions of U.S. dollars):

48

	For the three months ended June 30, 2011			% Change 2011 over 2010			For the three months ended June 30, 2010			For the six months ended June 30, 2011			% Change 2011 over 2010			For the six months ended June 30, 2010
Gross premiums written	$	195			17	%	$	167		$	403			14	%	$	354
Net premiums written		195			17			167			402			15			349
Net premiums earned	$	201			16		$	173		$	385			14		$	337
Life policy benefits		(166	)		(1	)		(169	)		(311	)		4			(299	)
Acquisition costs		(26	)		(1	)		(25	)		(56	)		13			(49	)
Technical result	$	9			NM		$	(21	)	$	18			NM		$	(11	)
Other income		—			(57	)		1			—			NM			1
Other operating expenses		(13	)		4			(13	)		(25	)		(5	)		(27	)
Net investment income		16			(22	)		20			31			(15	)		37
Allocated underwriting result(1)	$	12			NM		$	(13	)	$	24			NM		$	—

(1) Allocated underwriting result is defined as net premiums earned, other income or loss and allocated net investment income less life policy benefits, acquisition costs and other operating expenses.

Premiums

The Life segment represented 19% and 16% of total net premiums written in the three months and six months ended June 30, 2011, respectively, compared to 15% and 12% of total net premiums written during the same periods in 2010. The increase in the Life segment’s net premiums written as a percentage of total net premiums written during the three months and six months ended June 30, 2011 compared to the same periods in 2010 was primarily due to decreases in net premiums written in the Company’s Non-life segment, as described in Non-life segment above, and new business written in the Life segment, as described below.

Three-month result

Gross and net premiums written increased by 17% and net premiums earned increased by 16% in the three months ended June 30, 2011 compared to the same period in 2010. The increase in gross and net premiums written and net premiums earned was primarily due to new business written during 2010 in the longevity line, which was not fully reflected in the three months ended June 30, 2010, as well as modest growth in the mortality line. These increases were also due to the impact of the weaker U.S. dollar in the three months ended June 30, 2011 compared to the same period in 2010 as premiums denominated in currencies that have appreciated against the U.S. dollar were converted into U.S. dollars at higher average exchange rates. Foreign exchange fluctuations increased gross and net premiums written and net premiums earned by 7%.

Six-month result

Gross and net premiums written and net premiums earned increased by 14%, 15% and 14%, respectively, in the six months ended June 30, 2011 compared to the same period in 2010. The increase in gross and net premiums written and net premiums earned was primarily due to new business written during 2010 in the longevity line, which was not fully reflected in the six months ended June 30, 2011, as well as growth in the mortality line. Foreign exchange fluctuations modestly increased gross and net premiums written and net premiums earned by 2% due to the impact of the weaker U.S. dollar in the six months ended June 30, 2011 compared to the same period in 2010. These increases in gross and net premiums written and net premiums earned were partially offset by a decrease related to the restructuring of a longevity treaty.

Life policy benefits

Three-month result

Life policy benefits decreased by $3 million in the three months ended June 30, 2011 compared to the same period in 2010. The decrease was primarily attributable to:

• a decrease of $26 million in net adverse prior year loss development; partially offset by

• an increase in business written in both the longevity and mortality lines; and

• the impact of foreign exchange fluctuations, which increased life policy benefits by 7% (comparable with the increase in net premiums earned due to foreign exchange fluctuations) during the three months ended June 30, 2011 compared to the same period in 2010.

The Life segment experienced net adverse prior year loss development of $2 million in the three months ended June 30, 2011, primarily driven by net adverse development on certain short-term disability treaties in the mortality line. The net adverse development of $28 million in the three months ended June 30, 2010 included adverse development of $20 million in the longevity line, due to an improvement in the mortality trend related to an ILA treaty, and adverse development of $8 million resulting from the GMDB business, where the payout is linked to the performance of underlying capital market assets.

49

Six-month result

Life policy benefits increased by $12 million in the six months ended June 30, 2011 compared to the same period in 2010. The increase was primarily attributable to:

• an increase in business written in both the longevity and mortality lines; partially offset by

• a decrease of $19 million in net adverse prior year loss development; and

• lower life policy benefits reported by a cedant for a longevity treaty in run-off.

The Life segment experienced net favorable prior year loss development of $2 million in the six months ended June 30, 2011 due to favorable development related to the GMDB business, driven by updated cedant information and an improvement in the capital markets, being offset by adverse development on certain short-term treaties and a credit life treaty in the mortality line following the receipt of updated cedant information. The net adverse development of $17 million in the six months ended June 30, 2010 was primarily driven by adverse development of $20 million in the longevity line as described in the three-month result, and was partially offset by $3 million favorable development in the mortality line related to long term and TCI business.

Acquisition costs

Three-month result

Acquisition costs in the three months ended June 30, 2011 were comparable to the same period in 2010. While net premiums written and earned increased in the three months ended June 30, 2011 compared to the same period in 2010, the new business written in the longevity line did not incur any acquisition costs.

Six-month result

The increase in acquisition costs in the six months ended June 30, 2011 compared to the same period in 2010 was primarily attributable to an increase in acquisition costs reported by a cedant for a longevity treaty in run-off and higher net premiums earned in the mortality line of business.

Net investment income

Three-month and six-month result

Net investment income decreased in the three months and six months ended June 30, 2011 compared to the same periods of 2010 primarily as a result of lower positive adjustments on funds held contracts reported by cedants.

Allocated underwriting result

Three-month and six-month result

The allocated underwriting result in the three months and six months ended June 30, 2011 increased compared to the same periods in 2010 due to an increase in the technical result, which was partially offset by a decrease in net investment income. The increase in the technical result for the three months and six months ended June 30, 2011 compared to the same periods of 2010 was primarily driven by a decrease in net adverse prior year loss development, a change in the mix of business towards the longevity line and normal fluctuations in profitability between periods.

Premium Distribution by Line of Business

The distribution of net premiums written by line of business for the three months and six months ended June 30, 2011 and 2010 was as follows:

50

	For the three months ended June 30, 2011			For the three months ended June 30, 2010			For the six months ended June 30, 2011			For the six months ended June 30, 2010
Non-life
Property and casualty
Casualty		10	%		10	%		11	%		10	%
Property		13			17			16			19
Motor		3			5			5			7
Multiline and other		2			3			2			2
Specialty
Agriculture		7			2			6			4
Aviation / Space		5			4			4			3
Catastrophe		15			17			18			19
Credit / Surety		8			6			7			6
Energy		2			3			2			2
Engineering		4			4			3			3
Marine		7			7			5			6
Specialty casualty		2			4			3			5
Specialty property		4			3			2			2
Life		18			15			16			12
Total		100	%		100	%		100	%		100	%

The changes in the distribution of net premiums written by line between the three months and six months ended June 30, 2011 and 2010 primarily reflected the Company’s response to existing market conditions, the repositioning of its portfolio following the integration of Paris Re and the reduction of catastrophe exposed business. The distribution of net premiums written may also be affected by the timing of renewals of treaties, a change in treaty structure and premium adjustments by cedants. In addition, foreign exchange fluctuations affected the comparison for all lines.

• Property: the decrease in the distribution of net premiums written in the three months and six months ended June 30, 2011 compared to the same periods of 2010 was driven by the effects of the Company’s decision to cancel or reduce business as a result of reductions in pricing and to reposition its portfolio following the integration of Paris Re’s business, including reducing the level of catastrophe exposed business. The decrease in the distribution of net premiums written was also due to an increase in the percentage of the proportional business, which is recognized in written premiums on a quarterly basis over the coverage period of the underlying treaties.

• Agriculture: the increase in the distribution of net premiums written was driven by an increase in premiums due to increased demand, higher agricultural commodity prices and lower downward premium adjustments in the three months and six months ended June 30, 2011 compared to the same periods of 2010.

• Catastrophe: the decrease in the distribution of net premiums written in the three months and six months ended June 30, 2011 compared to the same periods of 2010 resulted primarily from the Company’s decision to reduce certain catastrophe exposures and reposition its portfolio following the integration of Paris Re’s business.

• Life: the increase in the distribution of net premiums written in the three months and six months ended June 30, 2011 compared to the same periods of 2010 was primarily due to the decrease in net premiums written in most of the Company’s Non-life lines of business and an increase in business written in the longevity and mortality lines, as described above.

Premium Distribution by Reinsurance Type

The Company typically writes business on either a proportional or non-proportional basis. On proportional business, the Company shares proportionally in both the premiums and losses of the cedant. On non-proportional business, the Company is typically exposed to loss events in excess of a predetermined dollar amount or loss ratio. In both proportional and non-proportional business, the Company typically reinsures a large group of primary insurance contracts written by the ceding company. In addition, the Company writes business on a facultative basis. Facultative arrangements are generally specific to an individual risk and can be written on either a proportional or non-proportional basis. Generally, the Company has more influence over pricing, as well as terms and conditions, in non-proportional and facultative arrangements.

The distribution of gross premiums written by reinsurance type for the three months and six months ended June 30, 2011 and 2010 was as follows:

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	For the three months ended June 30, 2011			For the three months ended June 30, 2010			For the six months ended June 30, 2011			For the six months ended June 30, 2010
Non-life segment
Proportional		48	%		44	%		43	%		40	%
Non-proportional		26			31			36			41
Facultative		8			10			6			7
Life segment
Proportional		18			15			14			11
Non-proportional		—			—			1			1
Total		100	%		100	%		100	%		100	%

The distribution of gross premiums written by reinsurance type is affected by changes in the allocation of capacity among lines of business, the timing of receipt by the Company of cedant accounts and premium adjustments by cedants. In addition, foreign exchange fluctuations affected the comparison for all treaty types.

The changes in the distribution of gross premiums written by reinsurance type in the Non-life segment between the three months and six months ended June 30, 2011 and the same periods in 2010 primarily reflect a shift in mix from the Non-life segment to the Life segment and from non-proportional business to proportional business in the Non-life segment. These shifts in the mix of business result from the decreases in gross premiums written in most lines of Non-life segment following the cancellation and reduction of business and the repositioning of the Company’s portfolio, as described above. In addition, the increase in the proportional business in the Life segment was driven by new business in the longevity line and growth in the mortality line of business, as well as the decrease in gross premiums written in most of the Company’s Non-life lines of business.

Premium Distribution by Geographic Region

The following table provides the geographic distribution of gross premiums written based on the location of the underlying risk in the three months and six months ended June 30, 2011 and 2010:

	For the three months ended June 30, 2011			For the three months ended June 30, 2010			For the six months ended June 30, 2011			For the six months ended June 30, 2010
Europe		40	%		36	%		42	%		44	%
North America		36			36			36			36
Asia, Australia and New Zealand		13			16			12			11
Latin America, Caribbean and Africa		11			12			10			9
Total		100	%		100	%		100	%		100	%

The increase in the distribution of gross premiums written in Europe in the three months ended June 30, 2011 was primarily driven by new business and growth in the Company’s Life segment and the impact of foreign exchange fluctuations, as premiums denominated in currencies that have appreciated against U.S. dollar were converted into U.S. dollar at higher average exchange rates. The decrease in the distribution of gross premiums written in Europe in the six months ended June 30, 2011 was driven by the cancellation and reduction of business and the repositioning of the Company’s portfolio following the integration of Paris Re, and was partially offset by the increase in gross premiums written in the Company’s Life segment. The changes in the distribution of gross premiums written in Asia, Australia and New Zealand and Latin America, Caribbean and Africa were primarily driven by changes in Europe and by the decrease in gross premiums written due to the timing difference related to the Japanese renewals, as discussed in the Catastrophe sub-segment.

Premium Distribution by Production Source

The Company generates its gross premiums written both through brokers and through direct relationships with cedants. The percentage of gross premiums written by production source for the three months and six months ended June 30, 2011 and 2010 was as follows:

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	For the three months ended June 30, 2011			For the three months ended June 30, 2010			For the six months ended June 30, 2011			For the six months ended June 30, 2010
Broker		75	%		76	%		73	%		75	%
Direct		25			24			27			25
Total		100	%		100	%		100	%		100	%

The percentage of gross premiums written through brokers in the three months and six months ended June 30, 2011 decreased compared to the same periods in 2010 due to the reductions in the Company’s gross premiums written being more pronounced in business written through brokers than through direct relationships with cedants.

Corporate and Other

Corporate and Other is comprised of the Company’s capital markets and investment related activities, including principal finance transactions, insurance-linked securities and strategic investments, and its corporate activities, including other operating expenses.

Net Investment Income

The table below provides net investment income by asset source for the three months and six months ended June 30, 2011 and 2010 (in millions of U.S. dollars):

	For the three months ended June 30, 2011			% Change 2011 over 2010			For the three months ended June 30, 2010			For the six months ended June 30, 2011			% Change 2011 over 2010			For the six months ended June 30, 2010
Fixed maturities	$	142			(4	)%	$	148		$	277			(8	)%	$	302
Short-term investments, cash and cash equivalents		1			14			1			2			(48	)		5
Equities		6			15			6			11			16			9
Funds held and other		11			(27	)		15			24			(9	)		26
Funds held – directly managed		9			(41	)		14			17			(37	)		27
Investment expenses		(11	)		6			(10	)		(21	)		3			(21	)
Net investment income	$	158			(9	)	$	174		$	310			(11	)	$	348

Because of the interest-sensitive nature of some of the Company’s Life products, net investment income is considered in Management’s assessment of the profitability of the Life segment (see Life segment above). The following discussion includes net investment income from all investment activities, including the net investment income allocated to the Life segment.

Three-month result

Net investment income decreased in the three months ended June 30, 2011 compared to the same period in 2010 primarily due to:

• a decrease in net investment income from fixed maturities was primarily due to lower reinvestment rates, which was partially offset by the purchase of higher yielding investments;

• a decrease in net investment income on funds held and other as a result of lower investment income reported by cedants. This decrease was partially offset by an increase in net investment income related to the higher level of other invested assets held, on average, in the three months ended June 30, 2011 compared to the same period in 2010; and

• a decrease in net investment income from funds held – directly managed related to lower reinvestment rates and the lower level of funds held – directly managed held, on average, which was related to the release of assets from the funds held – directly managed account following an endorsement to the quota share treaty with Colisée Re in February 2011 and the run-off of the underlying liabilities. The assets released from the funds held-directly managed account were reinvested in the Company’s fixed maturity portfolio at lower reinvestment rates; partially offset by

• the weakening of the U.S. dollar, on average, in the three months ended June 30, 2011 compared to the same period in 2010 which contributed a 2% increase in net investment income.

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Six-month result

Net investment income decreased in the six months ended June 30, 2011 compared to the same period in 2010 primarily due to:

• a decrease in net investment income from fixed maturities was primarily due to lower reinvestment rates, which was partially offset by the purchase of higher yielding investments;

• a decrease in net investment income from funds held – directly managed related to lower reinvestment rates and the lower level of funds held – directly managed held, on average, as described in the three-month result; and

• a decrease in net investment income from fixed maturities related to a lower level of fixed maturities held, on average, in the six months ended June 30, 2011 compared to the same period in 2010. The decrease in the average balance of fixed maturities held was related to the sale of fixed maturities to finance the Company’s repurchase of common shares and to repay debt of $200 million during the second half of 2010, which more than offset the inflows to the investment portfolio from operations, the preferred share issuance and the release of assets from the funds held – directly managed account in 2011.

Net Realized and Unrealized Investment Gains (Losses)

The Company’s portfolio managers have dual investment objectives of optimizing current investment income and achieving capital appreciation. To meet these objectives, it is often desirable to buy and sell securities to take advantage of changing market conditions and to reposition the investment portfolios. Accordingly, recognition of realized gains and losses is considered by the Company to be a normal consequence of its ongoing investment management activities. In addition, the Company records changes in fair value for substantially all of its investments as unrealized investment gains or losses in its Unaudited Condensed Consolidated Statements of Operations. Realized and unrealized investment gains and losses are generally a function of multiple factors, with the most significant being prevailing interest rates, credit spreads, and equity market conditions.

As discussed in Overview above, European and U.S. risk-free interest rates decreased, while credit spreads widened and equity markets remained relatively flat during the three months ended June 30, 2011. In the six months ended June 30, 2011, European and U.S. risk-free interest rates increased modestly, equity markets improved and credit spreads were flat. In addition to these general economic factors, the Company realized losses on treasury note futures in the three months ended June 30, 2011 and incurred losses related to certain insurance-linked securities impacted by the Japan Earthquake during the six months ended June 30, 2011. These factors had an impact on the Company’s investment portfolio and the related level of realized and unrealized gains (losses) on investments compared to the same period of 2010.

The components of net realized and unrealized investment gains (losses) for the three months and six months ended June 30, 2011 and 2010 were as follows (in millions of U.S. dollars):

	For the three months ended June 30, 2011			For the three months ended June 30, 2010			For the six months ended June 30, 2011			For the six months ended June 30, 2010
Net realized investment gains on fixed maturities and short-term investments	$	13		$	35		$	21		$	51
Net realized investment gains on equities		26			10			63			23
Net realized investment losses on other invested assets		(63	)		(29	)		(51	)		(28	)
Change in net unrealized investment losses on other invested assets		(7	)		(25	)		(45	)		(48	)
Change in net unrealized investment gains (losses) on fixed maturities and short-term investments		131			166			(10	)		262
Change in net unrealized investment losses on equities		(30	)		(127	)		(14	)		(101	)
Net other realized and unrealized investment gains (losses)		—			(4	)		—			3
Net realized and unrealized investment gains on funds held – directly managed		8			20			2			29
Net realized and unrealized investment gains (losses)	$	78		$	46		$	(34	)	$	191

Three-month result

Net realized and unrealized investment gains increased by $32 million, from $46 million in the three months ended June 30, 2010 to $78 million in the same period of 2011. The net realized and unrealized investment gains of $78 million in the three months ended June 30, 2011 were primarily due to declining European and U.S. risk-free interest rates and were partially offset by widening credit spreads. Net realized and unrealized investment gains of $78 million in the three months ended June 30, 2011 primarily consisted of the change in net unrealized investment gains on fixed maturities and short-term investments of $131 million and net realized investment gains on equities, fixed maturities and short-term investments of $39 million, which were partially offset by net realized investment losses on other invested assets, primarily related to treasury note futures, of $63 million and the change in net unrealized investment losses on equities and other invested assets of $37 million.

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Net realized and the change in net unrealized investment losses on other invested assets were a combined loss of $70 million in the three months ended June 30, 2011 and primarily related to realized losses on treasury note futures. Net realized and the change in net unrealized investment losses on other invested assets were a combined loss of $54 million in the three months ended June 30, 2010 and primarily related to realized and unrealized losses on treasury note futures.

Net realized and unrealized investment gains on funds held – directly managed of $8 million and $20 million in the three months ended June 30, 2011 and 2010, respectively, primarily related to the change in unrealized investment gains on fixed maturities and short-term investments in the segregated investment portfolio underlying the funds held – directly managed account and were primarily the result of declining risk-free rates.

Six-month result

Net realized and unrealized investment gains decreased by $225 million, from $191 million in the six months ended June 30, 2010 to a loss of $34 million in the same period of 2011. The net realized and unrealized investment losses of $34 million in the six months ended June 30, 2011 were primarily due to losses on treasury note futures, losses on insurance-linked securities impacted by the Japan Earthquake and a modest increase in European and U.S. risk-free interest rates, which were partially offset by improvements in worldwide equity markets. Net realized and unrealized investment losses of $34 million in the six months ended June 30, 2011 primarily consisted of net realized investment losses on other invested assets (mainly related to treasury note futures) of $51 million, the change in net unrealized investment losses on other invested assets, equities, fixed maturities and short-term investments of $69 million, which were partially offset by net realized investment gains on equities, fixed maturities and short-term investments of $84 million.

Net realized and the change in net unrealized investment losses on other invested assets were a combined loss of $96 million in the six months ended June 30, 2011 and primarily related to realized and unrealized losses on treasury note futures and a realized loss on insurance-linked securities impacted by the Japan Earthquake. Net realized and the change in net unrealized investment losses on other invested assets were a combined loss of $76 million in the six months ended June 30, 2010 and primarily related to losses on treasury note futures and a loss on an interest rate derivative used to mitigate exposure to interest rate volatility related to the Company’s Senior Notes issuance in March 2010, and were partially offset by realized gains on total return swaps.

Net realized and unrealized investment gains on funds held – directly managed of $2 million and $29 million in the six months ended June 30, 2011 and 2010, respectively, primarily relate to realized and unrealized investment gains on fixed maturities and short-term investments in the segregated investment portfolio underlying the funds held – directly managed account.

Other Operating Expenses

The Company’s total other operating expenses for the three months and six months ended June 30, 2011 and 2010 were as follows (in millions of U.S. dollars):

	For the three months ended June 30, 2011		% Change 2011 over 2010			For the three months ended June 30, 2010		For the six months ended June 30, 2011		% Change 2011 over 2010			For the six months ended June 30, 2010
Other operating expenses	$	114		29	%	$	160	$	218		24	%	$	288

Three-month result

Other operating expenses represent 10.3% and 14.5% of net premiums earned (both Non-life and Life) for the three months ended June 30, 2011 and 2010, respectively. Other operating expenses included in Corporate and Other were $30 million and $65 million, of which $26 million and $62 million are related to corporate activities for the three months ended June 30, 2011 and 2010, respectively.

Other operating expenses decreased by 29% in the three months ended June 30, 2011 compared to the same period in 2010. The decrease was primarily due to a charge of $34 million related to the Company’s voluntary termination plan in the three months ended June 30, 2010. In addition, the Company had a lower level of personnel costs and lower costs related to Paris Re’s operations following its integration, which were partially offset by the impact of foreign exchange fluctuations in the three months ended June 30, 2011 compared to the same period in 2010.

Six-month result

Other operating expenses represent 10.0% and 12.8% of net premiums earned (both Non-life and Life) for the six months ended June 30, 2011 and 2010, respectively. Other operating expenses included in Corporate and Other were $56 million and $101 million, of which $47 million and $94 million are related to corporate activities for the six months ended June 30, 2011 and 2010, respectively.

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Other operating expenses decreased by 24% in the six months ended June 30, 2011 compared to the same period in 2010. The decrease was primarily due to a charge of $35 million related to the Company’s voluntary termination plan in the six months ended June 30, 2010, and lower personnel costs (including share-based compensation expenses) and lower costs related to Paris Re’s operations following its integration, which were partially offset by foreign exchange fluctuations in the six months ended June 30, 2011 compared to the same period in 2010.

Income Taxes

The Company’s effective income tax rate, which we calculate as income tax expense or benefit divided by net income or loss before taxes, may fluctuate significantly from period to period depending on the geographic distribution of pre-tax net income or loss in any given period between different jurisdictions with comparatively higher tax rates and those with comparatively lower tax rates. The geographic distribution of pre-tax net income or loss can vary significantly between periods due to, but not limited to, the following factors: the business mix of net premiums written and earned; the geographic location, quantum and nature of net losses and loss expenses incurred; the quantum and geographic location of other operating expenses, net investment income, net realized and unrealized investment gains and losses; and the quantum of specific adjustments to determine the income tax basis in each of the Company’s operating jurisdictions. In addition, a significant portion of the Company’s gross and net premiums are currently written and earned in Bermuda, a non-taxable jurisdiction, including the majority of the Company’s catastrophe business, which can result in significant volatility to the Company’s pre-tax net income or loss in any given period.

The Company’s income tax expense and effective income tax rate for the three months and six months ended June 30, 2011 were as follows (in millions of U.S. dollars):

	For the three months ended June 30, 2011			For the three months ended June 30, 2010			For the six months ended June 30, 2011			For the six months ended June 30, 2010
Income tax expense	$	50		$	17		$	24		$	45
Effective income tax rate		28.7	%		8.5	%		(3.6	)%		14.3	%

Three-month result

Income tax expense and the effective income tax rate was $50 million and 28.7% in the three months ended June 30, 2011. Income tax expense and the effective income tax rate during the three months ended June 30, 2011 were primarily driven by the geographic distribution of the Company’s pre-tax net income between its various taxable and non-taxable jurisdictions. Specifically, the income tax expense and the effective income tax rate included a significant portion of the Company’s pre-tax net income recorded in jurisdictions with comparatively higher tax rates, the Company’s non-taxable jurisdictions recorded a net loss which was driven by large catastrophic losses and net realized and unrealized investment losses, without any associated tax benefit, and certain unfavorable tax adjustments were recorded related to foreign branch income taxes and foreign exchange fluctuations.

Income tax expense and the effective income tax rate was $17 million and 8.5% in the three months ended June 30, 2010. Income tax expense and the effective income tax rate during the three months ended June 30, 2010 were primarily driven by the geographic distribution of the Company’s pre-tax net income between its various taxable and non-taxable jurisdictions. Specifically, the income tax expense and the effective income tax rate included a significant portion of the Company’s pre-tax net income recorded in jurisdictions with comparatively lower tax rates and non-taxable jurisdictions, and a less significant portion of the Company’s pre-tax net income recorded in jurisdictions with comparatively higher tax rates which was driven by the large Deepwater Horizon loss and the charges related to the Company’s voluntary termination plan.

Six-month result

Income tax expense and the effective income tax rate was $24 million and (3.6)% in the six months ended June 30, 2011. Income tax expense and the effective income tax rate during the six months ended June 30, 2011 were primarily driven by the geographic distribution of the Company’s pre-tax net income between its various taxable and non-taxable jurisdictions. Specifically, income tax expense and the effective income tax rate included a significant portion of the Company’s pre-tax net loss recorded in non-taxable jurisdictions and jurisdictions with comparatively lower tax rates with no associated tax benefit, which were driven by the large catastrophic losses described in the Review of Net Income (Loss), and a modest pre-tax net income recorded in taxable jurisdictions.

Income tax expense and the effective income tax rate was $45 million and 14.3% in the six months ended June 30, 2010. Income tax expense and the effective income tax rate during the six months ended June 30, 2010 were primarily driven by the geographic distribution of the Company’s pre-tax net income between its various taxable and non-taxable jurisdictions. Specifically, income tax expense and the effective income tax rate included a relatively even distribution of the Company’s pre-tax net income between its various

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jurisdictions. The Company’s taxable jurisdictions benefitted from significant realized and unrealized investment gains, which were partially offset by significant catastrophe losses related to the Chile Earthquake, the Deepwater Horizon loss and charges related to the voluntary plan, while non-taxable jurisdictions benefitted from a low level of catastrophe losses.

Financial Condition, Liquidity and Capital Resources

The Company purchased, as part of its acquisition of Paris Re, an investment portfolio and a funds held – directly managed account. The discussion of the acquired Paris Re investment portfolio is included in the discussion of Investments below. The discussion of the segregated investment portfolio underlying the funds held – directly managed account is included separately in Funds Held – Directly Managed below.

Investments

Total investments and cash were $17.6 billion at June 30, 2011 compared to $16.4 billion at December 31, 2010. The major factors influencing the increase in the six months ended June 30, 2011 were:

• net cash provided by operating activities of $742 million;

• various factors, the primary one being the effect of a weaker U.S. dollar at June 30, 2011 relative to most major currencies as it relates to the conversion of non-U.S. dollar invested assets into U.S. dollars at higher exchange rates, amounting to approximately $408 million; and

• net proceeds of $362 million, after underwriting discounts, commissions and other related expenses of $12 million, related to the issuance of the Series E preferred shares (see Note 6 to the Unaudited Condensed Consolidated Financial Statements included in Item 1 of Part I of this report and Contractual Obligations and Commitments and Shareholders’ Equity and Capital Resources Management below); partially offset by

• repurchases of the Company’s common shares of $227 million;

• dividend payments on common and preferred shares totaling $95 million; and

• realized and unrealized losses related to the investment portfolio of $36 million primarily resulting from a decrease in other invested assets of $96 million, partially offset by an increase in the equity portfolio of $49 million and the fixed maturity and short-term investment portfolios of $11 million.

The Company employs a prudent investment philosophy. It maintains a high quality, well balanced and liquid portfolio having the dual objectives of optimizing current investment income and achieving capital appreciation. The Company’s invested assets are comprised of total investments, cash and cash equivalents and accrued investment income. From a risk management perspective, the Company allocates its invested assets into two categories: liability funds and capital funds. At June 30, 2011, the liability funds totaled $11.9 billion (including funds held – directly managed) and were comprised primarily of cash and cash equivalents and high quality fixed income securities. The capital funds, which totaled $7.2 billion, were comprised of cash and cash equivalents, investment grade and below investment grade fixed income securities, accrued investment income, preferred and common stocks, private placement equity and bond investments, convertible fixed income securities and certain other specialty asset classes. For additional information on liability funds, capital funds and the use of derivative financial instruments in the Company’s investment strategy, see Financial Condition, Liquidity and Capital Resources in Item 7 of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

The market value of fixed maturities, short-term investments and equities classified as trading securities (excluding funds held – directly managed) was $15.6 billion at June 30, 2011. Trading securities are carried at fair value with changes in fair value included in net realized and unrealized investment gains and losses in the Unaudited Condensed Consolidated Statements of Operations. In addition, the market value of the Company’s other invested assets was $338 million, which are discussed separately below.

At June 30, 2011, approximately 94% of the Company’s fixed income securities, including fixed income type mutual funds, were rated investment grade (BBB- or higher) by Standard & Poor’s (or estimated equivalent) and 95% were publicly traded. The average credit quality of the Company’s fixed income securities at June 30, 2011 was AA, comparable to the position at December 31, 2010.

The average duration of the Company’s investment portfolio was 3.0 years at June 30, 2011 and December 31, 2010. For the purposes of managing portfolio duration, the Company uses exchange traded treasury note futures. The use of treasury note futures allowed the Company to reduce the duration of its investment portfolio from 3.7 years to 3.0 years at June 30, 2011.

The average yield to maturity on fixed maturities, short-term investments and cash and cash equivalents was 2.9% at June 30, 2011, comparable to the position at December 31, 2010, reflecting relatively flat European and U.S. risk-free rates and credit spreads at June 30, 2011 compared to December 31, 2010.

The Company’s investment portfolio generated a positive total accounting return (calculated based on the carrying value of all investments in local currency) of 1.4% and 1.8% for the three months and six months ended June 30, 2011, respectively, compared to 1.2% and 3.0% for the comparable periods in 2010. The higher total accounting return in the three months ended June 30, 2011

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compared to the same period in 2010 was primarily due to decreasing risk-free rates. The lower total accounting return in the six months ended June 30, 2011 was mainly due to the relative increase in the level of risk-free rates, on average, in the six months ended June 30, 2011 compared to the same period in 2010.

The cost, gross unrealized gains, gross unrealized losses and fair value of fixed maturities, short-term investments and equities classified as trading at June 30, 2011 were as follows (in millions of U.S. dollars):

June 30, 2011	Cost(1)		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed maturities
U.S. government and agencies	$	1,550	$	26	$	(2	)	$	1,574
Non-U.S. sovereign government, supranational and government related		3,191		76		(9	)		3,258
Corporate		5,577		271		(18	)		5,830
Asset-backed securities		657		11		(12	)		656
Residential mortgage-backed securities		2,922		110		(33	)		2,999
Other mortgage-backed securities		87		3		—			90
Total fixed maturities		13,984		497		(74	)		14,407
Short-term investments		217		—		(1	)		216
Equities		880		136		(21	)		995
Total	$	15,081	$	633	$	(96	)	$	15,618

(1) Cost is amortized cost for fixed maturities and short-term investments and cost for equity securities. For investments acquired from Paris Re, cost is based on the fair value at the date of acquisition and subsequently adjusted for amortization of fixed maturities and short-term investments.

The fair value of the Company’s fixed maturities increased by $1.6 billion from $12.8 billion at December 31, 2010 to $14.4 billion at June 30, 2011. The increase in the Company’s fixed maturities is predominantly in the U.S. government and agencies, non-U.S. sovereign government, supranational and government related and residential mortgage-backed securities categories, which have increased by $601 million, $439 million and $693 million, respectively, at June 30, 2011 compared to December 31, 2010. The increases primarily reflect the investment of net cash provided by operating activities during the six months ended June 30, 2011, the investment of a portion of the Company’s cash and cash equivalents and the proceeds from the issuance of the Series E preferred shares. As a result of these new investments, the Company’s asset allocation has shifted from cash and cash equivalents to fixed maturities and, while the overall average credit quality of the portfolio has not changed from AA, there has been a shift in the credit quality from AA and A rated securities to AAA rated securities. See Ratings Distribution below for more details.

U.S. government and agencies includes U.S. treasuries, U.S. government agency securities and U.S. municipal securities which accounted for 82%, 12%, and 6%, respectively, of this category at June 30, 2011. The U.S. treasuries are not rated, however, they are generally considered to have a credit quality equivalent to or greater than AAA corporate issues. At June 30, 2011, 37% of U.S. government agency securities, although not specifically rated, are generally considered to have a credit quality equivalent to AAA corporate issues. The remaining 59% and 4% of U.S. government agency securities at June 30, 2011 were rated AAA and AA, respectively. At June 30, 2011, 12% of the U.S. municipal securities held were rated investment grade (BBB- or higher) by Standard & Poor’s (or estimated equivalent), with the remaining 88% not rated.

The non-U.S. sovereign government, supranational and government related category includes obligations of non-U.S. sovereign governments, political subdivisions, agencies and supranational debt. Non-U.S. sovereign government obligations comprised 87% of this category, of which 94% were rated AAA. The largest three non-U.S. sovereign government issuers (France, Germany and Canada) accounted for 82% of non-U.S. sovereign government obligations at June 30, 2011. The remaining 13% of this category was primarily comprised of investment grade non-U.S. government related obligations and non-U.S. government agency obligations which represented 9% and 4% of the total, respectively. At June 30, 2011, 87% of this category was rated AAA.

Corporate bonds are comprised of obligations of U.S. and foreign corporations. At June 30, 2011, 93% of these investments were rated investment grade (BBB- or higher) by Standard & Poor’s (or estimated equivalent), while 68% were rated A- or better. The ten largest issuers accounted for 20% of the corporate bonds held by the Company at June 30, 2011 (7% of total investments and cash) and no single issuer accounted for more than 3% of total corporate bonds (1% of the Company’s total investments and cash) at June 30, 2011. At June 30, 2011, U.S. bonds comprised 62% of this category and no other country accounted for more than 10% of this category. The main exposures by economic sector were 24% in finance (10% were banks), 13% in consumer noncyclical and 10% in each of government guaranteed corporate debt and communications. Within the finance sector, 99% of corporate bonds were rated investment grade and 88% were rated A- or better at June 30, 2011.

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The asset-backed securities category included U.S. asset-backed securities, which accounted for 74% at June 30, 2011. Of the U.S. asset-backed securities, 40% were rated investment grade (BBB- or higher) by Standard & Poor’s (or estimated equivalent) and 60% were not rated. Non-U.S. asset-backed securities accounted for the remainder of this category, all of which were rated A- or higher by Standard & Poor’s (or estimated equivalent).

Residential mortgage-backed securities includes U.S. residential mortgage-backed securities, which accounted for 92% of this category at June 30, 2011. These securities generally have a low risk of default and 96% are backed by U.S. government agencies, which sets standards on the mortgages before accepting them into the program. Although these U.S. government backed agency securities do not carry a formal rating, they are generally considered to have a credit quality equivalent to or greater than AAA corporate issues. They are considered prime mortgages and the major risk is uncertainty of the timing of prepayments. While there have been market concerns regarding sub-prime mortgages, the Company did not have direct exposure to these types of securities in its own portfolio at June 30, 2011, other than $17 million of investments in distressed asset vehicles (included in other invested assets). At June 30, 2011, the Company’s U.S. residential mortgage-backed securities included approximately $202 million (7% of U.S. residential mortgage-backed securities) of collateralized mortgage obligations, where the Company deemed the entry point and price of the investment to be attractive. At June 30, 2011, the remaining 8% of this category was comprised of non-U.S. residential mortgage-backed securities, of which 92% were rated AAA and 99% were rated investment grade (BBB- or higher) by Standard & Poor’s (or estimated equivalent).

Other mortgaged-backed securities includes U.S. commercial mortgage-backed securities and non-U.S. commercial mortgage backed securities, which accounted for 77% and 23% of this category at June 30, 2011, respectively. Approximately 96% of this category was rated investment grade (BBB- or higher) by Standard & Poor’s (or estimated equivalent).

Short-term investments primarily consisted of U.S. treasuries, non-U.S. sovereign government obligations and U.S. asset-backed securities. At June 30, 2011, U.S. treasuries and non-U.S. sovereign government obligations accounted for 62% and 37%, respectively, of this category and were rated AAA by Standard & Poor’s (or estimated equivalent). At June 30, 2011, U.S. asset-backed securities accounted for the remaining 1% of this category and were not rated.

Publicly traded common stocks (including public exchange traded funds (ETFs)) comprised 78% of equities at June 30, 2011. The remaining 22% of this category consisted primarily of funds holding fixed income securities, which was mainly comprised of emerging markets funds of $210 million. Of the publicly traded common stocks and ETFs, U.S. issuers represented 86% at June 30, 2011. The ten largest common stocks accounted for 17% of equities (excluding equities held in ETFs and funds holding fixed income securities) at June 30, 2011 and no single common stock issuer accounted for more than 3% of total equities (excluding equities held in ETFs and funds holding fixed income securities) or more than 1% of the Company’s total investments and cash. At June 30, 2011, the largest publicly traded common stock exposures by economic sector were 19% in consumer noncyclical, 14% in energy, 13% in finance, 11% in each of technology and communications, and 10% in industrials.

Maturity Distribution

The distribution of fixed maturities and short-term investments at June 30, 2011, by contractual maturity date, is shown below (in millions of U.S. dollars). Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations with or without call or prepayment penalties.

June 30, 2011	Cost		Fair Value
One year or less	$	963	$	970
More than one year through five years		5,279		5,404
More than five years through ten years		3,670		3,831
More than ten years		623		673
Subtotal		10,535		10,878
Mortgage/asset-backed securities		3,666		3,745
Total	$	14,201	$	14,623

Rating Distribution

The following table provides a breakdown of the credit quality of the Company’s fixed maturities and short-term investments at June 30, 2011:

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Rating Category	% of total
AAA		58	%
AA		7
A		19
BBB		10
Below investment grade/Unrated		6
Total		100	%

The Company’s AA and A (or equivalent) rated securities, as a percentage of its total fixed income portfolio, decreased from 31% at December 31, 2010 to 26% at June 30, 2011 and was reallocated to AAA-rated fixed income securities, which increased from 51% at December 31, 2010 to 58% at June 30, 2011. The increase in the allocation to AAA-rated fixed income securities was primarily due to the purchase of U.S. treasuries and certain U.S. residential mortgage-backed securities which are generally considered to have a credit quality equivalent to or greater than AAA corporate issues, and non-U.S. sovereign government, supranational and government related securities, which are predominantly AAA-rated. These changes in the Company’s overall asset allocation at June 30, 2011 compared to December 31, 2010 reflect new investments utilizing cash from operating activities generated during the six months ended June 30, 2011, the investing of a portion of the Company’s cash and cash equivalents, and the proceeds from the issuance of the Series E preferred shares. The overall average credit quality of the Company’s fixed maturity investment portfolio at June 30, 2011 and December 31, 2010 remained AA.

Other Invested Assets

At June 30, 2011, the Company’s other invested assets totaled $338 million. The Company’s other invested assets consisted primarily of investments in non-publicly traded companies, private placement equity and bond investments, notes receivable and other specialty asset classes. These assets, together with the Company’s derivative financial instruments that were in a net unrealized gain or loss position at June 30, 2011, are reported within other invested assets in the Company’s Unaudited Condensed Consolidated Balance Sheets.

At June 30, 2011, the Company’s principal finance activities included $162 million of investments classified as other invested assets, which were comprised primarily of notes receivable, total return, interest rate and credit default swaps (which are accounted for as derivative financial instruments), other asset-backed securities and private placement equity investments. At June 30, 2011, the carrying value of notes receivable, other asset-backed securities and private placement equity investments was $144 million, $27 million and $3 million, respectively, and were partially offset by the combined fair value of total return, interest rate and credit default swaps which was an unrealized loss of $12 million.

For total return swaps within the principal finance portfolio, the Company uses internal valuation models to estimate the fair value of these derivatives and develops assumptions that require significant judgment, such as the timing of future cash flows, credit spreads and the general level of interest rates. For interest rate swaps, the Company uses externally modeled quoted prices that use observable market inputs. At June 30, 2011, the fair value of the Company’s assumed exposure in the form of total return and interest rate swaps was an unrealized loss of $7 million and $5 million, respectively. At June 30, 2011, the notional value of the Company’s assumed exposure in the form of total return swaps was $153 million.

At June 30, 2011, 48% of the Company’s principal finance total return and interest rate swap portfolio was related to tax advantaged real estate income, 41% was related to apparel and retail future flow income or intellectual property backed transactions, for which the underlying investments were rated investment grade, and the remainder of the portfolio was distributed over a number of generally unrelated risks. For credit default swaps within principal finance, the Company uses externally modeled quoted prices that use observable market inputs to estimate the fair value. At June 30, 2011, the fair value of the Company’s assumed exposure in the form of credit default swaps was insignificant and the notional value was $23 million.

The Company continues to utilize credit default swaps to mitigate the risk associated with its underwriting obligations, most notably in the credit/surety line, to replicate investment positions or to manage market exposures and to reduce the credit risk for specific fixed maturities in its investment portfolio. The counterparties to the Company’s credit default swaps are all highly rated financial institutions, rated A- or better by Standard & Poor’s at June 30, 2011. The Company uses externally modeled quoted prices that use observable market inputs to estimate the fair value of these swaps. Excluding the credit default swaps within the principal finance portfolio described above, the fair value of these credit default swaps was a net unrealized loss of $2 million at June 30, 2011, and the notional value was comprised of $110 million of credit protection purchased and $5 million of credit exposure assumed.

The Company has entered into various weather derivatives and longevity total return swaps for which the underlying risks reference parametric weather risks and longevity risks, respectively. The Company uses internal valuation models to estimate the fair value of these derivatives and develops assumptions that require significant judgment, except for exchange traded weather derivatives. In determining the fair value of exchange traded weather derivatives, the Company uses quoted market prices. At June 30, 2011, the

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combined fair values of the weather derivatives and the longevity total return swaps were an unrealized loss of $15 million, while their combined notional values were $96 million.

The Company has entered into certain commodity futures contracts (which are accounted for as derivative financial instruments). The Company uses commodity futures to hedge certain investments and to replicate the investment return on certain benchmarked commodities. The counterparties to the Company’s commodity futures contracts are all highly rated financial institutions, rated A- or better by Standard & Poor’s at June 30, 2011. The Company uses quoted market prices to estimate the fair value of these contracts. The fair value and the notional value of the commodity futures contracts was an unrealized loss of $1 million and $51 million, respectively, at June 30, 2011.

The Company uses exchange traded treasury note futures for the purposes of managing portfolio duration. The fair value and notional value of the treasury note futures was a net unrealized loss of $12 million and a net short position of $2,283 million at June 30, 2011, respectively. The Company also uses equity futures to replicate equity investment positions. At June 30, 2011, both the notional value and the fair value of equity futures were insignificant.

The Company utilizes foreign exchange forward contracts and foreign currency option contracts as part of its overall currency risk management and investment strategies. At June 30, 2011, the fair value of foreign exchange forward contracts was a net unrealized gain of $7 million and the fair value of foreign currency option contracts was an unrealized gain of $3 million.

At June 30, 2011, the Company’s strategic investments of $201 million (of which $188 million were included in Other invested assets) includes investments in non-publicly traded companies, private placement equity and bond investments, derivatives and other specialty asset classes.

The Company also had $8 million of other invested assets at June 30, 2011.

Funds Held – Directly Managed

For a discussion of the funds held – directly managed account and the related Quota Share Retrocession Agreement, see Summary of certain agreements between AXA SA, Colisée Re and Paris Re in Item 1 of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. The composition of the investments underlying the funds held – directly managed account at June 30, 2011 is discussed below.

At June 30, 2011, approximately 98% of the fixed income securities underlying the funds held – directly managed account were publicly traded and all were rated investment grade (BBB- or higher) by Standard & Poor’s (or estimated equivalent). The average credit quality of the fixed income securities underlying the funds held – directly managed account was AA at June 30, 2011, comparable to December 31, 2010.

The average duration of the investments underlying the funds held – directly managed account was 3.1 years at June 30, 2011 and December 31, 2010. The average yield to maturity on fixed maturities, short-term investments and cash and cash equivalents underlying the funds held – directly managed account was 2.1% at June 30, 2011 compared to 2.4% at December 31, 2010. The decrease in the average yield to maturity during the six months ended June 30, 2011 primarily reflects the sale and maturity of higher yielding investments to finance the release of assets pursuant to the Endorsement (defined below) and to pay losses related to the run-off of the underlying reserves.

The cost, gross unrealized gains, gross unrealized losses and fair value of the investments underlying the funds held – directly managed account at June 30, 2011 were as follows (in millions of U.S. dollars):

June 30, 2011	Cost(1)		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Fixed maturities
U.S. government and agencies	$	223	$	8	$	—		$	231
Non-U.S. sovereign government, supranational and government related		306		7		—			313
Corporate		542		11		(2	)		551
Total fixed maturities		1,071		26		(2	)		1,095
Short-term investments		42		—		—			42
Other invested assets		29		—		(7	)		22
Total	$	1,142	$	26	$	(9	)	$	1,159

(1) Cost is based on the fair value at the date of the acquisition of Paris Re and subsequently adjusted for amortization of fixed maturities and short-term investments.

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The decrease in the fair value of the investments underlying the funds held – directly managed account of $384 million, from $1,543 million at December 31, 2010 to $1,159 million at June 30, 2011 is primarily related to the release of assets of approximately $0.3 billion from the funds held – directly managed account to Partner Reinsurance Europe Limited in February 2011 pursuant to an endorsement to the Quota Share Retrocession Agreement (the Endorsement) with Coliseé Re (See Counterparty Credit Risk in Item 7A of Part II of the Company’s Annual Report on Form 10K for the year ended December 31, 2010). The decrease in the fair value of the investments underlying the funds held – directly managed account is also due to the sale and maturity of investments to pay losses related to the run-off of the underlying reserves.

In addition to the investments in the above table at June 30, 2011, the funds held – directly managed account included cash and cash equivalents of $149 million, other assets and liabilities of $57 million and accrued investment income of $15 million. The other assets and liabilities represent working capital assets held by Colisée Re related to the underlying business. The discussion below focuses on the investments underlying the funds held – directly managed account.

U.S. government and agency securities underlying the funds held – directly managed account are comprised of U.S. government agency securities and U.S. treasuries which accounted for 67% and 33% of this category at June 30, 2011, respectively. With the exception of investments totaling $37 million in government agency securities, which were rated AA, U.S. government agency securities and U.S. treasuries are generally considered to have a credit quality equivalent to or greater than AAA corporate issues.

Non-U.S. sovereign government, supranational and government related category includes obligations of non-U.S. sovereign governments, agencies, political subdivisions and supranational debt. Non-U.S. government related obligations comprised 58% of this category, with investment grade non-U.S government agency obligations, non-U.S. sovereign government obligations, and supranational debt accounting for the remaining 21%, 17% and 4%, respectively. At June 30, 2011, 84% and 100% of this category were rated AA- or A- or better, respectively, by Standard & Poor’s (or estimated equivalent).

Corporate bonds underlying the funds held – directly managed account are comprised of obligations of U.S. and foreign corporations. At June 30, 2011, all of these investments were rated investment grade (BBB- or higher) by Standard & Poor’s (or estimated equivalent), while 92% were rated A- or better. The ten largest issuers accounted for 22% of the corporate bonds underlying the funds held – directly managed account at June 30, 2011 and no single issuer accounted for more than 4% of corporate bonds underlying the funds held – directly managed account or more than 2% of the investments and cash underlying the funds held – directly managed account. U.S. and French bonds comprised 42% and 16%, respectively, of this category at June 30, 2011. The main exposures of this category by economic sector were 50% in finance (28% were banks) and 13% in consumer noncyclical. At June 30, 2011, all of the finance sector corporate bonds held were rated investment grade (BBB- or higher) by Standard & Poor’s (or estimated equivalent) and 98% were rated A- or better. The decrease in the fair value of this category from $799 million at December 31, 2010 to $551 million at June 30, 2011, is primarily related to the release of assets related to the Endorsement described above.

Short-term investments underlying the funds held – directly managed account, are comprised of non-U.S. sovereign government and non-U.S. government related obligations which were rated A- or higher by Standard & Poor’s (or estimated equivalent) at June 30, 2011.

Other invested assets underlying the funds held – directly managed account consist primarily of real estate fund investments.

Maturity Distribution

The distribution of fixed maturities and short-term investments underlying the funds held – directly managed account at June 30, 2011, by contractual maturity date, is shown below (in millions of U.S. dollars). Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations with or without call or prepayment penalties.

June 30, 2011	Cost		Fair Value
One year or less	$	222	$	223
More than one year through five years		607		621
More than five years through ten years		258		266
More than ten years		26		27
Total		1,113		1,137

Rating Distribution

The following table provides a breakdown of the credit quality of fixed maturities and short-term investments underlying the funds held – directly managed account June 30, 2011:

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Rating Category	% of total
AAA		43	%
AA		30
A		23
BBB		4
Total		100	%

The breakdown of the credit quality of the fixed maturities and short-term investments underlying the funds held – directly managed account at June 30, 2011 has not changed significantly compared to December 31, 2010.

Funds Held by Reinsured Companies (Cedants)

Funds held by reinsured companies at June 30, 2011 have not changed significantly since December 31, 2010, other than a decrease of approximately $131 million related to the restructuring of a longevity treaty from a funds held basis to a swap basis (see Policy Benefits for Life and Annuity Contracts below). See Funds Held by Reinsured Companies (Cedants) in Item 7 of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

Unpaid Losses and Loss Expenses

The Company establishes loss reserves to cover the estimated liability for the payment of all losses and loss expenses incurred with respect to premiums earned on the contracts that the Company writes. Loss reserves do not represent an exact calculation of the liability. Estimates of ultimate liabilities are contingent on many future events and the eventual outcome of these events may be different from the assumptions underlying the reserve estimates. The Company believes that the recorded unpaid losses and loss expenses represent Management’s best estimate of the cost to settle the ultimate liabilities based on information available at June 30, 2011. See Critical Accounting Policies and Estimates – Losses and Loss Expenses and Life Policy Benefits above and in Item 7 of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 for additional information concerning losses and loss expenses.

At June 30, 2011 and December 31, 2010, the Company recorded gross Non-life reserves for unpaid losses and loss expenses of $12,016 million and $10,667 million, respectively, and net Non-life reserves for unpaid losses and loss expenses of $11,638 million and $10,318 million, respectively. The net Non-life reserves for unpaid losses and loss expenses at June 30, 2011 include $1,165 million of reserves guaranteed by Colisée Re under the Reserve Agreement (see Summary of certain agreements between AXA SA, Colisée Re and Paris Re in Item 1 of Part I and Note 9 to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 for a discussion of the Reserve Agreement).

The following table provides a reconciliation of the net Non-life reserves for unpaid losses and loss expenses for the six months ended June 30, 2011 (in millions of U.S. dollars):

	For the six months ended June 30, 2011
Net liability at December 31, 2010	$	10,318
Net incurred losses related to:
Current year		2,414
Prior years		(303	)
		2,111
Change in Paris Re reserve agreement		(28	)
Net paid losses		(1,142	)
Effects of foreign exchange rate changes		379
Net liability at June 30, 2011	$	11,638

The Non-life ratio of paid losses to net premiums earned was 64%, while the Non-life ratio of paid losses to incurred losses was 54% for the six months ended June 30, 2011, compared to 69% and 94%, respectively, for the same period of 2010. The decrease in the Non-life ratio of paid losses to net premiums earned for the six months ended June 30, 2011 was primarily due to the relatively lower level of paid losses in the six months ended June 30, 2011 compared to the same period in 2010. The lower level of paid losses was driven by the agriculture line of the North America Non-life sub-segment and was related to the annual settlement of the 2010 agricultural business which was significantly lower than the 2009 annual settlement paid in the same period of 2010, and certain lines of business in our Global (Non-U.S.) Specialty sub-segment, primarily driven by the timing of receipt of cedant accounts. The decrease in the Non-life ratio of paid losses to incurred losses is primarily due to a higher level of incurred losses in the six months ended June 30,

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2011 compared to the same period of 2010, which was related to the significant increase in the level of large catastrophic losses, as described in Results by Segment above.

The Company’s loss estimate related to the Japan Earthquake is inherently more uncertain than those from other catastrophic events given it is based on limited and preliminary information that has been received from cedants to date and is also based, to a lesser extent, on modeled losses. While the Company believes its techniques for modeling the impact of losses related to this event provides a reasonable basis for the estimation of its loss exposure, the Company cautions that estimates based on modeling are subject to a high degree of uncertainty. Additionally, due to the characteristics of the Company’s reinsurance portfolio in the region, changes in loss assumptions for specific cedants may have a material impact on the Company’s loss estimate related to this event given a significant portion of the losses are concentrated with a few large cedants. The Company believes there remains a high degree of uncertainty related to its loss estimates related to the Japan Earthquake and the ultimate losses arising from this event may be materially in excess of, or less than, the amounts provided for in the Unaudited Condensed Consolidated Balance Sheet at June 30, 2011. Any adjustments to the Company’s preliminary estimate of its ultimate losses will be reflected in the periods in which they are determined, which may affect the Company’s operating results in future periods.

See Critical Accounting Policies and Estimates – Losses and Loss Expenses and Life Policy Benefits and Results by Segment above for a discussion of losses and loss expenses and prior years’ reserve developments. See also Business – Reserves in Item 1 of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 for a discussion of the impact of foreign exchange on the net reserves.

Policy Benefits for Life and Annuity Contracts

At June 30, 2011 and December 31, 2010, the Company recorded gross policy benefits for life and annuity contracts of $1,726 million and $1,750 million, respectively, and net policy benefits for life and annuity contracts of $1,715 million and $1,736 million, respectively.

The following table provides a reconciliation of the net policy benefits for life and annuity contracts for the six months ended June 30, 2011 (in millions of U.S. dollars):

	For the six months ended June 30, 2011
Net liability at December 31, 2010	$	1,736
Net incurred losses related to:
Current year		313
Prior years		(2	)
		311
Net policy benefits restructured by a cedant		(131	)
Net paid losses		(292	)
Effects of foreign exchange rate changes		91
Net liability at June 30, 2011	$	1,715

The decrease in net policy benefits for life and annuity contracts of $21 million from December 31, 2010 to June 30, 2011 is due to net paid losses and the restructuring of a longevity treaty from a funds held basis to a swap basis. These decreases were partially offset by incurred losses and the impact of the weaker U.S. dollar, primarily against the euro and the British pound, converting policy benefits for life and annuity contracts that are denominated in these currencies into U.S. dollars at higher exchange rates.

See Critical Accounting Policies and Estimates – Losses and Loss Expenses and Life Policy Benefits and Results by Segment above for a discussion of life policy benefits and prior years’ reserve developments.

Reinsurance Recoverable on Paid and Unpaid Losses

The Company has exposure to credit risk related to reinsurance recoverable on paid and unpaid losses. See Note 10 to Consolidated Financial Statements and Quantitative and Qualitative Disclosures about Market Risk – Counterparty Credit Risk in Item 7A of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 for a discussion of the Company’s risk related to reinsurance recoverable on paid and unpaid losses and the Company’s process to evaluate the financial condition of its reinsurers.

Contractual Obligations and Commitments

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In the normal course of its business, the Company is a party to a variety of contractual obligations, which are discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. These contractual obligations are considered by the Company when assessing its liquidity requirements, and the Company is confident in its ability to meet all of its obligations.

In June 2011, the Company issued 14,950,000 of 7.25% Series E cumulative redeemable preferred shares (Series E preferred shares) for a total consideration of $362 million after underwriting discounts, commissions and other related expenses totaling $12 million. The net proceeds were used for general corporate purposes. On or after June 1, 2016, the Company may redeem the Series E preferred shares, in whole at any time or in part from time to time, at $25.00 per share plus accrued and unpaid dividends, if any, without interest. The Series E preferred shares are also redeemable at any time upon certain changes in tax law. Dividends on the Series E preferred shares are cumulative from the date of issuance and are payable quarterly in arrears, commencing September 1, 2011. In the event of liquidation of the Company, the holders of outstanding Series E preferred shares would have preference over the common shareholders and would receive a distribution of $25.00 per share, or an aggregate value of $374 million, plus accrued and unpaid dividends, if any. See Note 6 to the Condensed Unaudited Consolidated Financial Statements in Item 1 Part I of this report and Shareholders’ Equity and Capital Resources Management below.

Other than the Series E preferred shares, contractual obligations at June 30, 2011 have not changed materially compared to December 31, 2010.

Shareholders’ Equity and Capital Resources Management

Shareholders’ equity was $6.6 billion at June 30, 2011, an 8% decrease compared to $7.2 billion at December 31, 2010. The major factors contributing to the decrease in shareholders’ equity in the six months ended June 30, 2011 were:

• a net loss of $683 million;

• a net decrease of $201 million, due to the repurchase of common shares of $227 million under the Company’s share repurchase program, partially offset by the issuance of common shares under the Company’s employee equity plans of $26 million; and

• dividends declared on both the Company’s common and preferred shares of $95 million; partially offset by

• net proceeds of $362 million, after underwriting discounts, commissions and other related expenses of $12 million, related to the issuance of the Series E preferred shares (see Note 6 to the Unaudited Condensed Consolidated Financial Statements in Item 1 of Part I of this report and Contractual Obligations and Commitments above); and

• an increase of $44 million in the currency translation adjustment, resulting primarily from the translation of PartnerRe Holdings Europe Limited’s financial statements into the U.S. dollar.

See Results of Operations and Review of Net Income (Loss) above for a discussion of the Company’s net loss for the six months ended June 30, 2011.

As part of its long-term strategy, the Company will continue to actively manage capital resources to support its operations throughout the reinsurance cycle and for the benefit of its shareholders, subject to the ability to maintain strong ratings from the major rating agencies and the unquestioned ability to pay claims as they arise. Generally, the Company seeks to increase its capital when its current capital position is not sufficient to support the volume of attractive business opportunities available. Conversely, the Company will seek to reduce its capital, through the payment of dividends on its common shares or stock repurchases, when available business opportunities are insufficient or unattractive to fully utilize the Company’s capital at adequate returns. The Company may also seek to reduce or restructure its capital through the repayment or purchase of debt obligations, or increase or restructure its capital through the issuance of debt, when opportunities arise.

Management uses growth in Diluted Book Value per Share as a prime measure of the value the Company is generating for its common shareholders, as Management believes that growth in the Company’s Diluted Book Value per Share ultimately translates into growth in the Company’s stock price. Diluted Book Value per Share is calculated using common shareholders’ equity (shareholders’ equity less the aggregate liquidation value of preferred shares) divided by the number of fully diluted common shares and common share equivalents outstanding (assuming exercise of all stock-based awards and other dilutive securities). The Company’s Diluted Book Value per Share decreased by 11% to $83.71 at June 30, 2011 from $93.77 at December 31, 2010, primarily due to the comprehensive loss for the six months ended June 30, 2011 that was the result of the large catastrophic losses (see Review of Net Income (Loss)). See Key Financial Measures for further discussion.

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The table below sets forth the capital structure of the Company at June 30, 2011 and December 31, 2010 (in millions of U.S. dollars):

	June 30, 2011				December 31, 2010
Capital Structure:
Senior notes(1)	$	750	10	%	$	750	9	%
Capital efficient notes(2)		63	1			63	1
Preferred shares, aggregate liquidation value		894	12			520	7
Common shareholders’ equity		5,738	77			6,687	83
Total Capital	$	7,445	100	%	$	8,020	100	%

(1) PartnerRe Finance A LLC and PartnerRe Finance B LLC, the issuers of the Senior Notes, do not meet consolidation requirements under U.S. GAAP. Accordingly, the Company shows the related intercompany debt of $750 million in its Unaudited Condensed Consolidated Balance Sheets at June 30, 2011 and December 31, 2010.

(2) PartnerRe Finance II Inc., the issuer of the CENts, does not meet consolidation requirements under U.S. GAAP. Accordingly, the Company shows the related intercompany debt of $71 million in its Unaudited Condensed Consolidated Balance Sheets at June 30, 2011 and December 31, 2010.

The decrease in total capital during the six months ended June 30, 2011 was related to the decrease in shareholders’ equity discussed above, which was partially offset by the issuance of the Series E preferred shares.

In June 2011, the Company issued 14,950,000 of 7.25% Series E cumulative redeemable preferred shares (Series E preferred shares) for a total consideration of $362 million after underwriting discounts, commissions and other related expenses totaling $12 million. The net proceeds were used for general corporate purposes. On or after June 1, 2016, the Company may redeem the Series E preferred shares, in whole at any time or in part from time to time, at $25.00 per share plus accrued and unpaid dividends, if any, without interest. The Series E preferred shares are also redeemable at any time upon certain changes in tax law. Dividends on the Series E preferred shares are cumulative from the date of issuance and are payable quarterly in arrears, commencing September 1, 2011. In the event of liquidation of the Company, the holders of outstanding Series E preferred shares would have preference over the common shareholders and would receive a distribution of $25.00 per share, or an aggregate value of $374 million, plus accrued and unpaid dividends, if any. See Note 6 to the Condensed Unaudited Condensed Consolidated Financial Statements in Item 1 of Part I of this report and Contractual Obligations and Commitments above.

During the six months ended June 30, 2011, the Company repurchased, under its authorized share repurchase program, 2.8 million of its common shares at a total cost of approximately $227 million, representing an average cost of $81.41 per share. At June 30, 2011, the Company had approximately 3.7 million common shares remaining under its current share repurchase authorization and approximately 16.8 million common shares were held in treasury and are available for reissuance. See Unregistered Sales of Equity Securities and Use of Proceeds in Item 2 of Part II of this report.

The Company did not enter into any short-term borrowing arrangements during the six months ended June 30, 2011.

Liquidity

Liquidity is a measure of the Company’s ability to access sufficient cash flows to meet the short-term and long-term cash requirements of its business operations. Management believes that its significant cash flows from operations and high quality liquid investment portfolio will provide sufficient liquidity for the foreseeable future. Cash and cash equivalents were $1.6 billion at June 30, 2011 compared to $2.1 billion at December 31, 2010.

Cash flows from operations for the six months ended June 30, 2011 increased to $742 million from $561 million in the same period in 2010. The increase in cash flows from operations in the six months ended June 30, 2011 compared to the same period in 2010 was primarily due to higher underwriting cash flows, and lower taxes and foreign exchange, which were partially offset by modestly lower net investment cash flows. The higher underwriting cash flows primarily reflect cash received related to the release of assets from the funds held – directly managed account to Partner Reinsurance Europe Limited pursuant to the Endorsement (see Funds Held – Directly Managed above). Without the impact of the cash received related to the release of assets from the funds held – directly managed account, underwriting cash flows were lower in the six months ended June 30, 2011 compared to the same period in 2010 due to a lower level of premiums received, which is driven by the decrease in gross and net premiums written discussed in Overview and Results by Segment above.

Net cash provided by financing activities in the six months ended June 30, 2011 was $36 million compared to net cash used in financing activities of $184 million in the six months ended June 30, 2010. Net cash provided by financing activities in the six months ended June 30, 2011 was primarily related to the net proceeds of $362 million related to the issuance of the Series E preferred shares, which was partially offset by the Company’s share repurchases and dividends on common and preferred shares.

The Company believes that annual positive cash flows from operating activities will be sufficient to cover claims payments through 2011. In the event that paid losses accelerate beyond the ability to fund such payments from operating cash flows, the

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Company would use its cash balances available, liquidate a portion of its high quality and liquid investment portfolio or borrow under the Company’s revolving line of credit (see Credit Facilities below). As discussed in Investments above, the Company’s investments and cash totaled $17.6 billion at June 30, 2011, the main components of which were investment grade fixed maturities, short-term investments and cash and cash equivalents totaling $15.4 billion.

Financial strength ratings and senior unsecured debt ratings represent the opinions of rating agencies on the Company’s capacity to meet its claims paying obligations. In the event of a significant downgrade in ratings, the Company’s ability to write business and to access the capital markets could be impacted.

On June 2, 2011, Fitch downgraded the Company’s financial strength rating to AA- from AA following the significant catastrophe losses incurred in 2011 and given Fitch’s view that the Company’s earnings profile includes variability that is modestly greater than previously considered within the rating. The Company’s other financial strength ratings at June 30, 2011 have not changed since December 31, 2010 and our current financial strength ratings are:

Standard & Poor’s	AA-
Moody’s	Aa3
A.M. Best	A+
Fitch	AA-

See Risk Factors in Item 1A of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

Credit Facilities

In the normal course of its operations, the Company enters into agreements with financial institutions to obtain unsecured and secured credit facilities. The Company’s credit facilities at June 30, 2011 have not changed significantly since December 31, 2010. See Credit Facilities in Item 7 of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

Off-Balance Sheet Arrangements

The Company’s off-balance sheet arrangements at June 30, 2011 have not changed significantly since December 31, 2010. See Off-Balance Sheet Arrangements in Item 7 of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

Currency

See Results of Operations and Review of Net Income (Loss) above for a discussion of the impact of foreign exchange and net foreign exchange gains and losses for six months ended June 30, 2011 and 2010.

The foreign exchange gain or loss resulting from the translation of the Company’s subsidiaries’ and branches’ financial statements (expressed in euro or Canadian dollar functional currency) into U.S. dollars is classified in the currency translation adjustment account, which is a component of accumulated other comprehensive income or loss in shareholders’ equity. The currency translation adjustment account increased by $44 million during the six months ended June 30, 2011 due to the impact of foreign exchange fluctuations on the Company’s net asset exposure to currencies other than the U.S. dollar.

The following table provides a reconciliation of the currency translation adjustment for the six months ended June 30, 2011 (in millions of U.S. dollars):

	For the six months ended June 30, 2011
Currency translation adjustment at December 31, 2010	$	16
Change in currency translation adjustment included in accumulated other comprehensive income		44
Currency translation adjustment at June 30, 2011	$	60

From time to time, the Company enters into net investment hedges. At June 30, 2011, there were no outstanding foreign exchange contracts hedging the Company’s net investment exposure.

See Quantitative and Qualitative Disclosures About Market Risk—Foreign Currency Risk in Item 3 of Part I below for a discussion of the Company’s risk related to changes in foreign currency movements.

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New Accounting Pronouncements

See Note 3 to the Unaudited Condensed Consolidated Financial Statements included in Item 1 of Part I of this report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Overview

Management believes that the Company is principally exposed to five types of market related risk: interest rate risk, credit spread risk, foreign currency risk, counterparty credit risk and equity price risk. How these risks relate to the Company, and the process used to manage them, is discussed in Item 7A of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. The following discussion of market risks at June 30, 2011 focuses only on material changes from December 31, 2010 in the Company’s market risk exposures, or how those exposures are managed.

Interest Rate Risk

The Company’s fixed income portfolio and the fixed income securities in the investment portfolio underlying the funds held – directly managed account are exposed to interest rate risk. Fluctuations in interest rates have a direct impact on the market valuation of these securities. The Company manages interest rate risk on liability funds by constructing bond portfolios in which the economic impact of a general interest rate shift is comparable to the impact on the related liabilities. The Company manages the exposure to interest rate volatility on capital funds by choosing a duration profile that it believes will optimize the risk-reward relationship. For additional information on liability funds and capital funds, see Financial Condition, Liquidity and Capital Resources in Item 7 of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

At June 30, 2011, the Company estimates that the hypothetical case of an immediate 100 basis points or 200 basis points parallel shift in global bond curves would result in a change in the fair value of investments exposed to interest rate risk, the fair value of funds held – directly managed account exposed to interest rate risk, total invested assets, and shareholders’ equity as follows (in millions of U.S. dollars):

	-200 Basis Points		% Change			-100 Basis Points		% Change			June 30, 2011		+100 Basis Points		% Change			+200 Basis Points		% Change
Fair value of investments exposed to interest rate risk(1)(2)	$	17,047		6	%	$	16,561		3	%	$	16,075	$	15,589		(3	)%	$	15,103		(6	)%
Fair value of funds held – directly managed account exposed to interest rate risk(2)		1,364		6			1,325		3			1,286		1,247		(3	)		1,208		(6	)
Total invested assets(3)		20,118		6			19,593		3			19,068		18,543		(3	)		18,018		(6	)
Shareholders’ equity		7,682		16			7,157		8			6,632		6,107		(8	)		5,582		(16	)

(1) Includes certain other invested assets, certain cash and cash equivalents and funds holding fixed income securities.

(2) Excludes accrued interest.

(3) Includes total investments, cash and cash equivalents, the investment portfolio underlying the funds held – directly managed account and accrued interest.

The changes do not take into account any potential mitigating impact from the equity market, taxes or the corresponding change in the economic value of the Company’s reinsurance liabilities, which, as noted above, would substantially offset the economic impact on invested assets, although the offset would not be reflected in the Unaudited Condensed Consolidated Balance Sheets.

The increase in the absolute impact of an immediate change in interest rates of 100 basis points on the Company’s total invested assets and shareholders’ equity, from $488 million at December 31, 2010 to $525 million at June 30, 2011, was primarily due to the increase in the Company’s fixed maturity investments as discussed in Financial Condition, Liquidity and Capital Resources Management—Investments above. There was no material change in the percentage impact of an immediate change in interest rates of 100 basis points on the Company’s total invested assets and shareholders’ equity at June 30, 2011 compared to December 31, 2010.

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Interest rate movements also affect the economic value of the Company’s outstanding debt obligations and preferred securities in the same way that they affect the Company’s fixed income investments, and this can result in a liability whose economic value is different from the value reported in the Unaudited Condensed Consolidated Balance Sheets. At June 30, 2011, the carrying value and fair value of the Series E preferred shares that the Company issued during the three months ended June 30, 2011, was $374 million and $380 million (based on quoted market prices), respectively. The fair value of the Company’s other outstanding debt obligations and preferred securities, has not changed materially compared to December 31, 2010. For additional information related to the Company’s debt obligations, see Note 4 to the Unaudited Condensed Consolidated Financial Statements in Item 1 of Part I of this report and Item 7A of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. For additional information related to the Company’s Series E preferred shares, see Shareholders’ Equity and Capital Resources Management.

Credit Spread Risk

The Company’s fixed income portfolio and the fixed income securities in the investment portfolio underlying the funds held – directly managed account are exposed to credit spread risk. Fluctuations in market credit spreads have a direct impact on the market valuation of these securities.

The Company manages credit spread risk by the selection of securities within its fixed income portfolio. Changes in credit spreads directly affect the market value of certain fixed income securities, but do not necessarily result in a change in the future expected cash flows associated with holding individual securities. Other factors, including liquidity, supply and demand, and changing risk preferences of investors, may affect market credit spreads without any change in the underlying credit quality of the security.

At June 30, 2011, the Company estimates that the hypothetical case of an immediate 100 basis points or 200 basis points parallel shift in global credit spreads would result in a change in the fair value of investments and the fair value of funds held – directly managed account exposed to credit spread risk, total invested assets and shareholders’ equity as follows (in millions of U.S. dollars):

	-200 Basis Points		% Change			-100 Basis Points		% Change			June 30, 2011		+100  Basis Points		% Change			+200  Basis Points		% Change
Fair value of investments exposed to credit spread risk(1)(2)	$	16,839		5	%	$	16,457		2	%	$	16,075	$	15,693		(2	)%	$	15,311		(5	)%
Fair value of funds held – directly managed account exposed to credit spread risk(2)		1,348		5			1,317		2			1,286		1,255		(2	)		1,224		(5	)
Total invested assets(3)		19,894		4			19,481		2			19,068		18,655		(2	)		18,242		(4	)
Shareholders’ equity		7,458		12			7,045		6			6,632		6,219		(6	)		5,806		(12	)

(1) Includes certain other invested assets, certain cash and cash equivalents and funds holding fixed income securities.

(2) Excludes accrued interest.

(3) Includes total investments, cash and cash equivalents, the investment portfolio underlying the funds held – directly managed account and accrued interest.

The impacts of changes in credit spreads for all parallel shifts in basis points are lower than the impacts of changes in interest rates, as the change in credit spreads does not impact government fixed income securities. However, the change in credit spreads does assume that mortgage-backed securities issued by government sponsored entities are affected, even though these typically exhibit significantly lower spread volatility than corporate fixed income securities. These changes also exclude any potential mitigating impact from the equity market, taxes, and the change in the economic value of the Company’s reinsurance liabilities, which may offset the economic impact on invested assets.

The increase in the absolute impact of an immediate change in credit spreads of 100 basis points on the Company’s total invested assets and shareholders’ equity, from $380 million at December 31, 2010 to $413 million at June 30, 2011, was primarily due to the increase in the Company’s investments exposed to credit spread risk as discussed in Financial Condition, Liquidity and Capital Resources—Investments above. There was no material change in the percentage impact of an immediate change in credit spreads of 100 basis points on the Company’s total invested assets and shareholders’ equity at June 30, 2011 compared to December 31, 2010.

Foreign Currency Risk

Through its multinational reinsurance operations, the Company conducts business in a variety of non-U.S. currencies, with the principal exposures being the euro, British pound, Canadian dollar, Swiss Franc and Singapore dollar. As the Company’s reporting currency is the U.S. dollar, foreign exchange rate fluctuations may materially impact the Company’s Unaudited Condensed Consolidated Financial Statements.

69

The table below summarizes the Company’s gross and net exposure in its Unaudited Condensed Consolidated Balance Sheet at June 30, 2011 to foreign currency as well as the associated foreign currency derivatives the Company has entered into to manage this exposure (in millions of U.S. dollars):

	euro			GBP			CAD			CHF			SGD			Other			Total(1)
Total assets	$	5,679		$	1,108		$	1,353		$	98		$	369		$	637		$	9,244
Total liabilities		(5,053	)		(804	)		(860	)		(302	)		(55	)		(2,628	)		(9,702	)
Total gross foreign currency exposure		626			304			493			(204	)		314			(1,991	)		(458	)
Total derivative amount		(409	)		(305	)		27			212			(187	)		1,836			1,174
Net foreign currency exposure		217			(1	)		520			8			127			(155	)		716

(1) As the U.S. dollar is the Company’s reporting currency, there is no currency risk attached to the U.S. dollar and it is excluded from this table. The U.S. dollar accounted for the difference between the Company’s total foreign currency exposure in this table and the total assets and total liabilities in the Company’s Unaudited Condensed Consolidated Balance Sheet at June 30, 2011.

The above numbers include the Company’s investment in PartnerRe Holdings Europe Limited, whose functional currency is the euro, and certain of its subsidiaries and branches, whose functional currencies are the euro or Canadian dollar.

Assuming all other variables remain constant and disregarding any tax effects, a change in the U.S. dollar of 10% or 20% relative to the other currencies held by the Company would result in a change in the Company’s net assets of $72 million and $143 million, respectively, inclusive of the effect of foreign exchange forward contracts and other derivative financial instruments.

Counterparty Credit Risk

The Company has exposure to credit risk primarily as a holder of fixed income securities. The Company controls this exposure by emphasizing investment grade credit quality in the fixed income securities it purchases. At June 30, 2011, approximately 57% of the Company’s fixed income portfolio (including the funds held – directly managed account) was rated AAA (or equivalent rating), 85% was rated A- or better and 6% of the Company’s fixed income portfolio was rated below investment grade. The Company believes this high quality concentration reduces its exposure to credit risk on fixed income investments to an acceptable level. At June 30, 2011, the Company is not exposed to any significant credit concentration risk on its investments, excluding securities issued by the U.S., French and German governments which are rated AAA (see Financial Condition, Liquidity and Capital Resources Management—Investments). In addition, the single largest corporate issuer and the top 10 corporate issuers accounted for less than 3% and 21% of the Company’s total corporate fixed income securities (excluding the funds held – directly managed account), respectively. Within the segregated investment portfolio underlying the funds held – directly managed account, the single largest corporate issuer and the top 10 corporate issuers accounted for less than 4% and 22%, respectively, of total corporate fixed income securities underlying the funds held – directly managed account at June 30, 2011.

The Company keeps cash and cash equivalents in several banks and may keep up to $500 million, excluding custodial accounts, at any point in time in any one bank.

To a lesser extent, the Company is also exposed to the following credit risks:

• as a party to foreign exchange forward contracts and other derivative contracts;

• in its underwriting operations, most notably in the credit/surety line and as part of its principal finance activities;

• credit risk of its cedants in the event of their insolvency or their failure to honor the value of the funds held balances due to the Company;

• credit risk of Colisée Re in the event of their insolvency or their failure to honor the value of the funds held balances due to the Company;

• credit risk of AXA or its affiliates in the event of their insolvency or their failure to honor their obligations under the 2006 Acquisition Agreement (see Summary of certain agreements between AXA SA, Colisée Re and Paris Re in Item 1 of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010);

• as it relates to its business written through brokers if any of the Company’s brokers is unable to fulfill their contractual obligations;

• as it relates to its reinsurance balances receivable and reinsurance recoverable on paid and unpaid losses; and

• under its retrocessional reinsurance contracts.

70

The concentrations of the Company’s counterparty credit risk exposures have not changed materially compared to December 31, 2010. See Counterparty Credit Risk in Item 7A of Part II of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 for additional discussion of credit risks.

Equity Price Risk

The Company invests a portion of its capital funds in marketable equity securities (fair market value of $778 million, excluding funds holding fixed income securities of $217 million) at June 30, 2011. These equity investments are exposed to equity price risk, defined as the potential for loss in market value due to a decline in equity prices. The Company believes that the effects of diversification and the relatively small size of its investments in equities relative to total invested assets mitigate its exposure to equity price risk. The Company estimates that its equity investment portfolio has a beta versus the S&P 500 Index of approximately 1.03 on average. Portfolio beta measures the response of a portfolio’s performance relative to a market return, where a beta of 1 would be an equivalent return to the index. Given the estimated beta for the Company’s equity portfolio, a 10% and 20% movement in the S&P 500 Index would result in a change in the fair value of the Company’s equity portfolio, total invested assets and shareholders’ equity at June 30, 2011 as follows (in millions of U.S. dollars):

	20% Decrease		% Change			10% Decrease		% Change			June 30, 2011		10% Increase		% Change			20% Increase		% Change
Equities(1)	$	618		(21	)%	$	698		(10	)%	$	778	$	858		10	%	$	938		21	%
Total invested assets(2)		18,908		(1	)		18,988		—			19,068		19,148		—			19,228		1
Shareholders’ equity		6,472		(2	)		6,552		(1	)		6,632		6,712		1			6,792		2

(1) Excludes funds holding fixed income securities of $217 million.

(2) Includes total investments, cash and cash equivalents, the investment portfolio underlying the funds held – directly managed account and accrued interest.

This change does not take into account any potential mitigating impact from the fixed income securities or taxes.

The absolute impact of a 10% change in the S&P 500 Index on the Company’s equity portfolio, total invested assets and shareholders’ equity decreased to $80 million at June 30, 2011 compared to $114 million at December 31, 2010, as a result of the decrease in the fair value of the equity portfolio, excluding funds holding fixed income securities, from $1,031 million at December 31, 2010 to $778 million at June 30, 2011. There was no material change in the percentage impact of an immediate change of 10% in the S&P 500 Index on the Company’s total invested assets and shareholders’ equity at June 30, 2011 compared to December 31, 2010.

ITEM 4. CONTROLS AND PROCEDURES

The Company carried out an evaluation, under the supervision and with the participation of Management, including the Chief Executive Officer and Chief Financial Officer, as of June 30, 2011, of the effectiveness of the design and operation of disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2011, the disclosure controls and procedures are effective such that information required to be disclosed by the Company in reports that it files or submits pursuant to the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and is accumulated and communicated to Management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosures.

There have been no changes in the Company’s internal control over financial reporting identified in connection with such evaluation that occurred during the three months ended June 30, 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There has been no significant change in legal proceedings at June 30, 2011 compared to December 31, 2010. See Note 18(e) to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

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ITEM 1A. RISK FACTORS

Cautionary Note Concerning Forward-Looking Statements

Certain statements contained in this document, including Management’s Discussion and Analysis, may be considered forward-looking statements as defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the United States Securities Exchange Act of 1934. Forward-looking statements are based on the Company’s assumptions and expectations concerning future events and financial performance of the Company 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. The Company’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 and integrating new acquisitions, 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.

The words believe, anticipate, estimate, project, plan, expect, intend, hope, forecast, evaluate, will likely result or will continue or words of similar impact generally involve forward-looking statements. We caution readers not to place undue reliance on these forward-looking statements, which speak only as of their dates. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

See Risk Factors in Item 1A of Part I of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 and quarterly report on Form 10-Q for the three months ended March 31, 2011 for a complete review of important risk factors.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information about purchases by the Company during the three months ended June 30, 2011 of equity securities that are registered by the Company pursuant to Section 12 of the Exchange Act.

Issuer Purchases of Equity Securities

Period	Total number  of shares purchased(1)		Average price paid per  share		Total number of  shares purchased as part of a publicly announced program (1) (2)		Maximum number of shares  that may yet be purchased under the program(1)
4/01/2011-4/30/2011		—	$	—		—		3,732,807
5/01/2011-5/31/2011		—		—		—		3,732,807
6/01/2011-6/30/2011		—		—		—		3,732,807
Total		—	$	—		—

(1) In December 2010, the Company’s Board of Directors approved a new share repurchase authorization up to a total of 7 million common shares, which replaced the prior authorization of 7 million common shares approved in September 2010. Unless terminated earlier by resolution of the Company’s Board of Directors, the program will expire when the Company has repurchased all shares authorized for repurchase thereunder.

(2) At June 30, 2011, approximately 16.8 million common shares were held in treasury and available for reissuance.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. RESERVED

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibits—Included on page 76.

72

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PartnerRe Ltd. (Registrant)
By:	/s/    CONSTANTINOS MIRANTHIS
Name:	Constantinos Miranthis
Title:	President and Chief Executive Officer and Director (Principal Executive Officer)

Date: August 4, 2011

By:	/s/    WILLIAM BABCOCK
Name:	William Babcock
Title:	Executive Vice President & Chief Financial Officer (Principal Financial Officer)

Date: August 4, 2011

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EXHIBIT INDEX

Exhibit Number	Exhibit
10.1	Certificate of Designation, Preferences and Rights of the Company’s 7.25% Series E Cumulative Redeemable Preferred Shares (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed June 15, 2011).
10.2	Specimen Share Certificate for the 7.25% Series E Cumulative Redeemable Preferred Shares (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed June 15, 2011).
10.3	PartnerRe Ltd amended and restated Employee Equity Plan.
10.4	PartnerRe Ltd Swiss Share Purchase Plan.
15	Letter Regarding Unaudited Interim Financial Information.
31.1	Section 302 Certification of Constantinos Miranthis.
31.2	Section 302 Certification of William Babcock.
32	Section 906 Certifications.
101.1	The following financial information from PartnerRe Ltd.’s Quarterly Report on Form 10–Q for the quarter ended June 30, 2011 formatted in XBRL: (i) Unaudited Condensed Consolidated Balance Sheets at June 30, 2011, and December 31, 2010; (ii) Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months and six months ended June 30, 2011 and 2010; (iii) Unaudited Condensed Consolidated Statements of Shareholders’ Equity for the six months ended June 30, 2011 and 2010; (iv) Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2011 and 2010; and (v) Notes to Unaudited Condensed Consolidated Financial Statements*.

* As provided in Rule 406T of Regulation S-T, this information is “furnished” herewith and not “filed” for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934. Such exhibit will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934 unless PartnerRe Ltd. specifically incorporates it by reference.

EX-10.3

Exhibit 10.3

PARTNERRE LTD.

AMENDED AND RESTATED EMPLOYEE EQUITY PLAN

Effective May 10, 2005

Section 1. PURPOSE

The purpose of the Plan is to provide a means through which the Company and its Subsidiaries may attract able persons to enter and remain in their employ and to provide a means whereby those key employees and other persons upon whom the responsibilities of the successful administration and management of the Company rest, and whose present and potential contributions to the welfare of the Company are of importance, can acquire and maintain share ownership, thereby strengthening their commitment to the welfare of the Company and promoting an identity of interest between shareholders and these key employees. It is intended that certain options granted under this Plan may qualify as “incentive stock options” under Section 422 of the Code.

Section 2. DEFINITIONS

(a) “Award” means, individually or collectively, any award of Incentive Stock Options, Nonqualified Stock Options, Restricted Shares or Restricted Share Units or any Performance Award.

(b) “Award Agreement” means a written agreement or instrument between the Company and a Participant setting forth the specific terms of an Award, which may, but need not, be executed by the Participant.

(c) “Board” means the Board of Directors of the Company.

(d) “Change in Control” shall occur when (i) any “person” within the meaning of Section 14(d) of the Exchange Act, other than the Company, a Subsidiary or any employee benefit plan(s) sponsored by the Company or any Subsidiary, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty (50%) of the combined voting power of the Company’s outstanding voting securities generally in the election of directors; (ii) at any time during a period of twelve (12) consecutive months, individuals who at the beginning of such period constituted the Board cease for any reason to constitute at least a majority thereof, provided that any person subsequently becoming a director whose election, or nomination for election by the Company’s shareholders was on the recommendation or with the approval of at least two-thirds of the directors comprising the Board on the effective date of this Plan (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be, for purposes of this clause (ii), considered as though such person were a member of the Board at the beginning of such period; and provided further that, notwithstanding the foregoing, no such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 or Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of an individual,

corporation, partnership, group, associate or other entity or “person” other than the Board shall in any event be considered to be a director in office at the beginning of such period; (iii) any one “person”, or more than one “person” acting as a group (as determined under U.S. Treasury Regulation Section 1.409A-3(i)(f)(v)(B)), other than any Subsidiary, acquires (or has acquired during the 12- month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value (as determined in good faith by the Board without regard to any liabilities associated with such assets) of more than fifty percent (50%) of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; or (iv) there occurs a reorganization, merger, consolidation or other corporate transaction involving the Company (a “Transaction”), other than with a wholly-owned Subsidiary and other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or ultimate parent thereof) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity, or the ultimate parent thereof, outstanding immediately after such Transaction.

(e) “Code” means the U.S. Internal Revenue Code of 1986, as amended.

(f) “Committee” means such committee of the Board as the Board may appoint to administer the Plan.

(g) “Common Stock” or “Shares” means the authorized common shares, par value US$1.00 per share, of the Company.

(h) “Company” means PartnerRe Ltd.

(i) “Consultant” means any person, including any advisor, engaged by the Company or a Subsidiary to render consulting, advisory or other services and who is compensated for such services, other than a member of the Board.

(j) “Date of Grant” means the date on which the granting of an Award is authorized or such other date as may be specified in such authorization.

(k) “Disqualifying Disposition” means any disposition (including any sale) of Shares acquired by exercise of an Incentive Stock Option made within the period which is (a) two years after the date the Participant was granted the Incentive Stock Option or (b) one year after the date the Participant acquired Shares by exercising the Incentive Stock Option.

(l) “Eligible Person” means an Employee or a Consultant, or, for the purpose of granting Substitute Awards, a holder of options or other equity based awards relating to the shares of a company acquired by the Company or with which the Company combines.

(m) “Employee” means a current or prospective common law employee of the Company or a Subsidiary.

(n) “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules promulgated thereunder.

(o) “Expiration Date” means the tenth anniversary of the Date of Grant.

(p) Save as otherwise defined in Section 7(c), “Fair Market Value” of a Share on a given date means (A) if the Shares are listed on a national securities exchange, the closing sale price reported as having occurred on the primary exchange with which the Shares are listed and traded on such date, or, if there is no such sale on that date, then on the last preceding date on which such a sale was reported, or (B) if the Shares are not listed on any national securities exchange but are quoted in the National Market System of the National Association of Securities Dealers Automated Quotation System on a last sale basis, the closing sale price reported on such date, or, if there is no such sale on that date then on the last preceding date on which such a sale was reported. If the Common Stock is not quoted on NASDAQ-NMS or listed on an exchange, or representative quotes are not otherwise available, the Fair Market Value shall mean the amount determined by the Committee in good faith to be the fair market value per Share, on a fully diluted basis.

(q) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

(r) “Nonqualified Stock Option” means an Option not intended to qualify as an Incentive Stock Option.

(s) “Option” means an Incentive Stock Option or a Nonqualified Stock Option granted pursuant to the Plan.

(t) “Participant” means an Eligible Person to whom an Award is granted pursuant to the Plan.

(u) “Performance Award” means an award, denominated in cash or Shares or any combination thereof, granted pursuant to Section 9 of the Plan and payable only upon the achievement of performance targets, as set forth in Section 9.

(v) “Plan” means the PartnerRe Ltd. 2005 Equity Compensation Plan, as amended from time to time.

(w) “Restricted Period” means, with respect to any Restricted Share or Restricted Share Unit, the period of time determined by the Committee during which such Restricted Share or Restricted Share Unit is subject to restrictions or forfeiture, as set forth in Section 8 and in the applicable Award Agreement.

(x) “Restricted Share” means a Common Share issued to a Participant pursuant to Section 8.

(y) “Restricted Share Unit” shall mean a contractual right granted under Section 8 that is denominated in Shares, each of which Units represents a right to receive the value of a Share upon the terms and conditions set forth in the Plan and the applicable Award Agreement.

(z) “Subsidiary” means any corporation of which a majority of the outstanding voting securities or voting power is beneficially owned directly or indirectly by the Company and otherwise as provided in Section 86 of the Companies Act 1981 of Bermuda, as amended.

(aa) “Substitute Awards” shall mean Awards granted in assumption of, or in substitution for, outstanding awards previously granted by a company acquired by the Company or with which the Company combines.

Section 3. DURATION

The Plan expires on the date of the annual meeting of shareholders in the year 2015, and no further Awards may be made after the expiration thereof. Notwithstanding the expiration of the Plan, the Plan provisions shall continue to govern outstanding Awards until all matters relating to the payment of Awards and administration of the Plan have been settled.

Section 4. ADMINISTRATION

The Committee shall have authority to administer the Plan, including, without limitation, the authority to:

(a) Select the Eligible Persons to participate in the Plan;

(b) Determine the nature and extent of the Awards to be made to each Participant;

(c) Determine the time or times when Awards will be made;

(d) Determine the duration of each Restricted Period and the conditions to which the payment of Awards may be subject;

(e) Establish and adjudicate the performance goals and Awards consequent thereon for each Restricted Period;

(f) Accelerate the vesting of any outstanding Award, reduce the Restricted Period applicable to any Award and/or extend the period following termination of employment during which an Award may be exercised;

(g) Prescribe the form or forms of Award Agreements; and

(h) Cause records to be established in which there shall be entered, from time to time as Awards are made to Participants, the date and type of each Award, the number of Shares underlying each Award, and the duration of any applicable vesting period or Restricted Period.

All decisions of the Committee shall be final, conclusive and binding upon all parties, including the Company, the shareholders and the Participants.

The Committee may delegate to the Chief Executive Officer of the Company the authority, subject to such terms and limitations as the Committee shall determine, to grant Awards to, or to cancel, modify, waive rights with respect to, alter, discontinue, suspend or terminate Awards held by, employees who are not officers or directors of the Company for purposes of Section 16 of the Exchange Act; provided, however, that any such delegation shall conform to the requirements of the New York Stock Exchange applicable to the Company, and Bermuda corporate law.

Section 5. ELIGIBILITY.

(a) General. Participation shall be limited to Eligible Persons who have received notification from the Committee, or from a person designated by the Committee, that they have been selected to participate in the Plan. Substitute Awards may be granted to holders of options and other equity-based awards relating to the shares of a company acquired by the Company or with which the Company combines.

(b) Incentive Stock Option Limitation. Incentive Stock Options may be granted only to Employees.

Section 6. SHARES AVAILABLE FOR AWARDS.

(a) Subject to adjustment as provided below, the total number of Shares available for issuance to which Awards may be made under the Plan shall be 8,305,089 Shares. Notwithstanding the foregoing and subject to adjustment as provided in Section 6(e), (i) no Participant may receive Options and stock appreciation rights under the Plan in any calendar year that relate to more than 500,000 Shares and (ii) of the 8,305,089 Shares, the maximum number of Shares with respect to which Awards may be made under Section 8 is 3,358,325. Awards may be made under Section 8 without regard to such limit if (x) the vesting conditions relating to such Awards are based upon Company or Subsidiary performance measures, (y) such Awards are made in satisfaction of Company obligations to employees that would otherwise be paid in cash or (z) such Awards are issued in connection with the exercise of an Option or other Award hereunder.

(b) If, after the effective date of the Plan, (i) any Shares covered by an Award (other than a Substitute Award), or to which such an Award relates, are terminated, forfeited, or cancelled, or (ii) such an Award otherwise terminates or is settled without the delivery of all the Shares underlying such Award (other than as a result of a Net-Settled Exercise (as defined below), cashless exercise of an Option or similar arrangement), then the Shares covered by such Award, or to which such Award relates, to the extent of any such forfeiture, termination, settlement or cancellation, shall again be, or shall become, available for issuance under the Plan, Shares becoming available for grant following any such forfeiture, termination, settlement or cancellation may be regranted as the same type of Award as the original Award, for purposes of the limits on Award types set forth in Section 6(a).

(c) Any Shares delivered pursuant to an Award shall consist of authorized and unissued Shares.

(d) In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event affects the Shares such that an adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made

available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Shares (or other securities or property) which thereafter may be made the subject of Awards, including the aggregate and individual limits specified in Section 6(a), (ii) the number and type of Shares (or other securities or property) subject to outstanding Awards, and (iii) the grant, purchase, or exercise price with respect to any Award or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award; provided, however, that the number of Shares subject to any Award denominated in Shares shall always be a whole number.

(e) Shares underlying Substitute Awards shall not reduce the number of Shares remaining available for issuance under the Plan.

Section 7. OPTIONS.

(a) General. Options granted hereunder shall be in such form and shall contain such terms and conditions as the Committee shall deem appropriate. All Options shall be separately designated Incentive Stock Options or Nonqualified Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for Shares purchased on exercise of each type of Option. The provisions of each Option shall be set forth in an Award Agreement, which agreements need not be identical, and each Option shall include (through incorporation of provisions hereof by reference in the Award Agreement or otherwise) the substance of each of the following provisions:

(i) Term. Subject to Section 7(b)(ii) hereof in the case of certain Incentive Stock Options, no Option granted hereunder shall be exercisable after the expiration of ten (10) years from the date it was granted.

(ii) Exercise Price. Except in the case of Substitute Awards, the exercise price per Share for each Option shall not be less than the Fair Market Value per Share at the time of grant. Except in connection with an action taken pursuant to Section 6(d), no Option shall be amended or replaced in any manner that would have the effect of reducing the exercise price of such Option established at the time of grant thereof.

(iii) Payment for Stock. Payment for Shares acquired pursuant to Options granted hereunder shall be made in full, or adequate provision made therefor, upon exercise of the Options (A) in immediately available funds in United States dollars, by wire transfer, certified or bank cashier’s check, (B) by surrender to or withheld by the Company of Shares which have a Fair Market Value equal to such aggregate exercise price and/or any taxes withheld with respect to such exercise and which satisfy such other requirements as the Committee may impose (including by Net-Settled Exercise, as defined below), (C) by delivering irrevocable trade instructions to a stockbroker to deliver promptly to the Company an amount of sale or loan proceeds sufficient to pay the aggregate exercise price, (D) by any combination of (A), (B), or (C) above, or (E) by any other means approved by the Committee. Notwithstanding the above, should any taxes be withheld in accordance with Section 7(a)(iii)(B) in connection with a

Net-Settled Exercise pursuant to Section 7(c), the Fair Market Value of Shares withheld to pay such taxes shall be calculated in accordance with Section 7(c).

(iv) Vesting. Options shall vest and become exercisable in such manner and on such date or dates set forth in the Award Agreement as may be determined by the Committee; provided, however, that notwithstanding any vesting dates set by the Committee, the Committee may in its sole discretion accelerate the vesting of any Option, which acceleration shall not affect the terms and conditions of any such Option other than with respect to vesting. Unless the Committee shall establish another vesting schedule in accordance with the foregoing, Options shall vest and become exercisable in increments of 33%, 33% and 34%, respectively, on the first, second and third anniversaries of the date of grant, provided that the foregoing restriction shall not apply to any Substitute Awards.

Notwithstanding the above, if a Participant ceases employment with the Company by reason of death or disability, (A) any Options (including any Share Appreciation Rights as described below) held by such Participant which are vested on the date of such termination shall remain exercisable for twelve (12) months following the date of such termination, but in no event later than the Expiration Date, and (B) any unvested Options (including any Share Appreciation Rights as described below) held by such Participant shall vest on the date of such termination and shall remain exercisable for twelve (12) months following the date of such termination, but in no event later than the Expiration Date.

In respect of French Participants only:

If a French Participant ceases employment with the Company by reason of:

(X) disability (permanent disability as defined as second and third class of disability as provided by article L341-4 of the French Social Security Code)—(i) any Options held by such Participant which are vested on the date of such termination shall remain exercisable for twelve (12) months following the date of such termination, but in no event later than the Expiration Date, and (ii) any unvested Options held by such Participant shall vest on the date of such termination and shall remain exercisable for twelve (12) months following the date of such termination, but in no event later than the Expiration Date. The Blocking Period (as defined in the applicable Award Agreement) shall be deemed to expire on the date of such termination.

(Y) death—(i) any Options held by such Participant which are vested on the date of such termination shall remain exercisable for six (6) months following the date of such termination, but in no event later than the Expiration Date, and (ii) any unvested Options held by such Participant shall vest on the date of such termination and shall remain exercisable for six (6) months following the date of such termination, but in no event later than the Expiration Date. The Blocking Period (as defined in the applicable Award Agreement) shall be deemed to expire on the date of such termination.

(b) Special Provisions Applicable to Incentive Stock Options.

(i) Exercise Price of Incentive Stock Options. Subject to the provisions of subsection (ii) hereof, the exercise price of each Incentive Stock Option shall be

not less than one hundred percent (100%) of the Fair Market Value of the Shares subject to the Option on the date the Option is granted.

(ii) Ten Percent (10%) Shareholders. No Incentive Stock Option may be granted to an Employee who, at the time the option is granted, owns directly, or indirectly within the meaning of Section 424(d) of the Code, stock possessing more than 10 percent of the total combined voting power of all classes of stock of the Company or of any parent or subsidiary thereof, unless such option (A) has an exercise price of at least 110 percent of the Fair Market Value on the date of the grant of such option; and (B) cannot be exercised more than five years after the date it is granted.

(iii) $100,000 Limitation. To the extent the aggregate Fair Market Value (determined as of the date of grant) of Shares for which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under all plans of the Company and its affiliates) exceeds $100,000, such excess Incentive Stock Options shall be treated as Nonqualified Stock Options.

(iv) Disqualifying Dispositions. Each Participant who receives an Incentive Stock Option must agree to notify the Company in writing immediately after the Participant makes a Disqualifying Disposition of any Shares acquired pursuant to the exercise of an Incentive Stock Option. A Net-Settled Exercise (as defined below) of any Incentive Stock Option will result in a Disqualifying Disposition of all Shares underlying such Incentive Stock Option that are withheld pursuant to such Net-Settled Exercise.

(c) Net-Settled Exercise. Any Option granted hereunder may be exercised such that such Option is settled by delivery to the Participant of a number of Shares having a value equal to the excess of the Fair Market Value of all the Shares underlying the Option (or portion thereof being so exercised) over the aggregate exercise price thereof (such exercise, a “Net-Settled Exercise” and the resulting net shares delivered to the Participant, the “Net Shares”). To effect a Net-Settled Exercise of any Option, the Participant must complete and return to the Company a notice of intent to exercise such Option through a Net-Settled Exercise (the “Net-Settlement Notice”). Once the Company receives the Net-Settlement Notice, the Net-Settled Exercise of any Option so indicated in such Net-Settlement Notice shall be deemed irrevocable and any Net Shares resulting from such Net-Settled Exercise shall be delivered to the Participant on the third business day following the day on which the Company receives the Net-Settlement Notice, with the number of Net Shares to be determined using the Fair Market Value of a Share on the day on which the Company receives the Net-Settlement Notice.

Notwithstanding as defined or as applicable anywhere else in this Plan, for the purposes of this Section 7(c) only, “Fair Market Value” of a Share on a given date means (A) if the Shares are listed on a national securities exchange, the average of the high and low sale prices reported as having occurred on the primary exchange with which the Shares are listed and traded on such date, or, if there is no such sale on that date, then on the last preceding date on which such a sale was reported, or (B) if the Shares are not listed on any national securities exchange but are quoted in the National Market System of the National Association of Securities Dealers Automated Quotation

System on a last sale basis, the average of the high and low sale prices reported on such date, or, if there is no such sale on that date then on the last preceding date on which such a sale was reported. If the Common Stock is not listed on an exchange, or representative quotes are not otherwise available, the Fair Market Value shall mean the amount determined by the Committee in good faith to be the fair market value per Share, on a fully diluted basis.

(d) Share Appreciation Rights. Any Option granted hereunder may contain a provision requiring, or permitting the Participant to elect, that such Option be settled by delivery to the Participant of a number of Shares having a Fair Market Value equal to the excess of the Fair Market Value of all the Shares underlying the Option (or portion thereof being so exercised) over the aggregate exercise price thereof. Any such Award containing such a provision may be denominated a “Share Appreciation Right”. If, and only if, such Share Appreciation Right is issued to a Participant who is not a United States taxpayer at the time of the grant of such Share Appreciation Right and the exercise thereof, the value of the Shares otherwise deliverable to the Participant upon such net share settlement of the Option may, solely at the Company’s discretion, be delivered in cash. For the avoidance of doubt, except in the case of Substitute Awards, the exercise price per Share for each such Share Appreciation Right shall not be less than the Fair Market Value per Share at the time of grant.

Section 8. RESTRICTED SHARES AND RESTRICTED SHARE UNITS

(a) The Committee is hereby authorized to grant Awards of Restricted Shares and Restricted Share Units to Participants.

(b) Restricted Shares and Restricted Share Units shall be subject to such restrictions as the Committee may impose (including, without limitation, any limitation on the right to vote a Restricted Share or the right to receive any dividend, dividend equivalent or other right or property), which restrictions may lapse separately or in combination at such time or times, in such installments or otherwise, as the Committee may deem appropriate. If the restrictions or vesting conditions applicable to an Award of Restricted Shares or Restricted Share Units relate exclusively to the passage of time and continued employment or provision of services, or refraining therefrom, such time period (during which period such restrictions or vesting conditions may lapse ratably or on a “cliff” basis) shall consist of not less than 36 months, except that the foregoing restriction shall not apply to such Awards if they meet any of the conditions described in Section 6(a)(x), (y) or (z) or (ii) are Substitute Awards.

Notwithstanding the above, if a Participant ceases employment with the Company by reason of death or disability, any Restricted Share Units held by such Participant shall vest on the date of such termination.

(c) Restricted Shares granted under the Plan may be evidenced in such manner as the Committee may deem appropriate including, without limitation, book-entry registration or issuance of a share certificate or certificates. In the event any share certificate is issued in respect of Restricted Shares granted under the Plan, such certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Shares.

Section 9. PERFORMANCE BASED COMPENSATION

(a) The Committee is hereby authorized to grant Performance Awards to eligible Participants under this Section 9, if the Committee intends that any such Award should qualify as “qualified performance based compensation” for purposes of Section 162(m) of the Code. Each Performance Award shall include a pre-established formula, such that payment, retention or vesting of the Award is subject to the achievement during a performance period or periods, as determined by the Committee, of a level or levels, as determined by the Committee, of one or more of the following performance measures: (i) Return on Net Assets, (ii) Underwriting Year Return on Equity, (iii) Financial Year Return on Common Equity, (iv) Organizational Objectives, (v) Earnings Per Share or (vi) Premium Growth. For any Award subject to any such pre-established formula, no more than $5,000,000, or if such Award is denominated in Shares, 800,000 Shares, can be paid or delivered in satisfaction of such Award to any Participant.

(b) For purposes of this Section, the following terms shall have the meanings set forth below:

(i) “Earnings Per Share” shall mean earnings per share calculated in accordance with Generally Accepted Accounting Principles.

(ii) “Financial Year Return On Common Equity” for a period shall mean net income less preferred share dividends divided by total beginning shareholders equity, less amounts, if any, attributable to preferred shares.

(iii) “Underwriting Year Return on Equity” for a period shall mean the present value of underwriting income divided by the business unit capitalization, plus the risk free rate plus any adjustments for taxation, cost of holding capital or prior year development.

(iv) “Return On Net Assets” for a period shall mean net income less preferred share dividends divided by the difference of average total assets less average non-debt liabilities, with average defined as the sum of assets or liabilities at the beginning and ending of the period divided by two.

(v) “Organizational Objectives” shall mean specific goals established by the Committee relating to operational, non-financial, performance of the Company.

(vi) “Premium Growth” shall mean either an absolute or relative premiums written target on either a gross or net basis.

(c) The Committee shall establish the performance formula for any Performance Award, and shall certify that the requisite performance has been achieved prior to payment thereof, in accordance with the requirements of Section 162(m) and the regulations promulgated thereunder. The Committee shall have the authority to reduce, but not to increase, the amount payable under a Performance Award upon achievement of the performance goals established therefor.

(d) Performance Awards may be paid in cash, Shares or any combination thereof.

Section 10. GENERAL

(a) Adjustment of Performance Goals. The Committee may, during any Restricted Period, make such adjustments to performance goals as it may deem appropriate, to compensate for, or reflect, any significant changes that may have occurred during such Restricted Period in (i) applicable accounting rules or principles or changes in the Company’s method of accounting or in that of any other corporation whose performance is relevant to the determination of whether an Award has been earned or (ii) tax laws or other laws or regulations that alter or affect the computation of the measures of performance goals used for the calculation of Awards, provided, however, that the Committee may not make any amendment to a Performance Award that is not permitted under Section 162(m) of the Code.

(b) Privileges of Share Ownership. Except as otherwise specifically provided in the Plan, no person shall be entitled to any of the privileges of share ownership in respect of Shares subject to Awards granted hereunder until such Shares have been duly issued and the Participant has become the record owner thereof.

(c) Government and Other Regulations. The obligation of the Company to make payment of Awards in Shares or otherwise shall be subject to all applicable laws, rules, and regulations, and to such approvals by governmental agencies as may be required and to which the Company is subject. The Company shall use its reasonable efforts to cause the offer and sale of Shares reserved under the Plan to be registered under the U.S. Securities Act of 1933, as amended, on Form S-8 prior to the issuance of any Shares under the Plan.

(d) Tax Withholding. Notwithstanding any other provision of the Plan, the Company or a Subsidiary, as appropriate, shall have the right to deduct from all Awards, to the extent paid in cash, all applicable income, employment, social security or other taxes required by law to be withheld with respect to such Awards and, in the case of Awards paid in Shares, the Participant or other person receiving such Shares may be required to pay to the Company or a Subsidiary, as appropriate prior to delivery of such Shares, the amount of any such taxes which the Company or Subsidiary is required to withhold, if any, with respect to such Shares. Subject to such restrictions or limitations as the Committee may impose, the Company may accept or withhold Shares of equivalent Fair Market Value in payment of such withholding tax obligations.

(e) Claim to Awards and Employment Rights. Except as may be provided in any Award Agreement, no employee or other person shall have any claim or right to be granted an Award under the Plan nor, having been selected for the grant of an Award, to be selected for a grant of any other Award. Neither this Plan nor any action taken hereunder shall be construed as giving any Participant any right to be retained in the employ of the Company or a Subsidiary.

(g) Designation and Change of Beneficiary. Each Participant may, in accordance with procedures to be established by the Committee, designate in writing one or more persons as the beneficiary who shall be entitled to receive the amounts payable with respect to Awards granted hereunder, if any, due under the Plan upon his death. A Participant may, from time to time, revoke or change his beneficiary designation without the consent of any prior beneficiary by filing a new such designation. In the

event of any issue or question arising in respect of any beneficiary designation, the Company shall be entitled to pay to the Participant’s estate any amounts owing to the Participant under the Plan or any Award.

(h) No Liability of Committee Members. No member of the Committee shall be personally liable by reason of any contract or other instrument executed by such member or on his behalf in his capacity as a member of the Committee nor for any mistake of judgment made in good faith, and the Company shall indemnify and hold harmless each member of the Committee and each other employee, officer or director of the Company to whom any duty or power relating to the administration or interpretation of the Plan may be allocated or delegated, against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim) arising out of any act or omission to act in connection with the Plan unless arising out of such person’s own fraud or bad faith.

(i) Governing Law. The Plan shall be governed by and construed in accordance with the laws of Bermuda without reference to the principles of conflicts of law thereof.

(j) Funding. No provision of the Plan shall require the Company, for the purpose of satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any assets, nor shall the Company maintain separate bank accounts, books, records or other evidence of the existence of a segregated or separately maintained or administered fund for such purposes. Participants shall have no rights under the Plan other than as unsecured general creditors of the Company, except that insofar as they may have become entitled to payment of additional compensation by performance of services, they shall have the same rights as other employees under general law.

(k) Nontransferability. A Participant’s rights and interest under the Plan or under any Award, including amounts payable, may not be sold, assigned, donated, or transferred or otherwise disposed of, mortgaged, pledged or encumbered except, in the event of a Participant’s death, to a designated beneficiary to the extent permitted by the Committee, or in the absence of such designation, by will or the laws of descent and distribution. Options shall be exercisable during the lifetime of a Participant only by the Participant. Notwithstanding the foregoing, Awards may be transferable, to the extent provided in the respective Award Agreement, to any person or entity who would be considered a “family member” of the Participant for purposes of Form S-8 under the U.S. Securities Act of 1933, as amended.

(l) Relationship to Other Benefits. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance or other benefit plan of the Company or any Subsidiary except as may otherwise be specifically provided.

(m) Expenses. The expenses of administering the Plan shall be borne by the Company and its Subsidiaries.

(n) Pronouns. Masculine pronouns and other words of masculine gender shall refer to both men and women.

(o) Titles and Headings. The titles and headings of the sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings shall control.

Section 11. EFFECT OF CHANGE IN CONTROL

(a) In the event of a Change in Control, notwithstanding any vesting schedule established by the Committee (i) with respect to an Award of Restricted Shares or Restricted Share Units, the Restricted Period shall expire immediately with respect to the maximum number of Restricted Shares or Restricted Share Units subject to such Award, with effect from the day preceding the date of such change, (ii) all outstanding Options shall immediately vest and become exercisable and (iii) all outstanding Performance Awards shall be paid as if the performance goals established in connection therewith were fully achieved, except to the extent expressly set forth in the applicable Award Agreement.

(b) The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to substantially all of the assets and business of the Company.

Section 12. NONEXCLUSIVITY OF THE PLAN

Neither the adoption of this Plan by the Board nor the submission of this Plan to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, arrangements providing for the grant of share options, and such arrangements may be either applicable generally or only in specific cases.

Section 13. AMENDMENTS AND TERMINATION

(a) Except to the extent prohibited by applicable law and unless otherwise expressly provided in an Award Agreement or in the Plan, the Board may amend, alter, suspend, discontinue, or terminate the Plan or any portion thereof at any time; provided, however, that no such amendment, alteration, suspension, discontinuation or termination shall be made without (i) shareholder approval if such approval is necessary to comply with the requirements of the New York Stock Exchange or applicable law, or (ii) the consent of the affected Participant, if such action would adversely affect the rights of such Participant under any outstanding Award. Notwithstanding anything to the contrary herein, the Committee may amend the Plan in such manner as may be necessary to enable the Plan to achieve its stated purposes in any jurisdiction in a tax-efficient manner and in compliance with local rules and regulations.

(b) The Committee may waive any conditions or rights under, amend any terms of, or amend, alter, suspend, discontinue or terminate, any Award theretofore granted, prospectively or retroactively, without the consent of any relevant Participant or holder or beneficiary of an Award, provided, however, that no such action shall impair the

rights of any Participant or holder or beneficiary under any Award theretofore granted under the Plan without the consent of the affected Participant, holder or beneficiary.

(c) Any provision of the Plan or any Award Agreement to the contrary notwithstanding, the Committee may cause any Award granted hereunder to be canceled in consideration of a cash payment or alternative Award made to the holder of such canceled Award equal in value to the fair market value of such canceled Award; provided, however, that in no event (other than in connection with an action taken pursuant to Section 6(d)) shall a canceled Option or Share Appreciation Right (i) be replaced with an Option or Share Appreciation Right with an exercise price that is less than the exercise price of the original Option or Share Appreciation Right or (ii) be exchanged for a cash payment at a time where the exercise price of such Option or Share Appreciation Right is lower than the fair market value of such cancelled Award without shareholder approval.

(d) The Committee may correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem desirable to carry the Plan into effect.

Section 14. SECTION 409A OF THE CODE

With respect to any Awards subject to Section 409A of the Code, the Plan is intended to comply with the requirements of Section 409A of the Code, and the provisions of the Plan and any Award Agreement shall be interpreted in a manner that satisfies the requirements of Section 409A of the Code, and the Plan shall be operated accordingly. If any provision of the Plan or any term or condition of any Award would otherwise frustrate or conflict with this intent, the provision, term or condition will be interpreted and deemed amended so as to avoid this conflict. For the avoidance of doubt, nothing in the Plan is intended to guarantee that the Participants will not be subjected to the payment of “additional tax” or interest under Section 409A, and nothing in the Plan permits the Participants to seek or obtain such indemnification from the Company for any such “additional tax” or interest.

EX-10.4

Exhibit 10.4

SWISS SHARE PURCHASE PLAN

Effective February 25, 2002

1. Purpose. The purpose of the Plan is to provide employees of PartnerRe Holdings Europe Limited (Zurich Branch), a subsidiary of PartnerRe Ltd., with an opportunity to purchase Common Shares of the Company.

2. Definitions.

(a) “Board” shall mean the Board of Directors of the Company.

(b) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(c) “Committee” shall mean the Compensation Committee of the Board, or such other committee as may be appointed by the Board.

(d) “Common Shares” shall mean the common shares of the Company, $1.00 par value per share.

(e) “Company” shall mean PartnerRe Ltd., a Bermuda company.

(f) “Compensation” shall mean all base straight time gross earnings, exclusive of payments for overtime, shift premium, incentive compensation, incentive payments, bonuses, commissions and other compensation.

(g) “Employee” shall mean any individual who is an employee of PartnerRe Holdings Europe Limited (Zurich Branch) and who is customarily employed by the Branch on an open-ended contract for at least 20 hours per week. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on sick leave or other leave of absence approved by the Company. Where the period leave exceeds 90 days and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship will be deemed to have terminated on the 91st day of such leave.

(h) “Enrollment Date” shall mean the first day of each Offering Period.

“Exercise Date” shall mean the last day of each Offering Period.

(j) “Fair Market Value” of a Common Share on a given date means (A) if the Common Shares are listed on a national securities exchange, the closing sale price reported as having occurred on the primary exchange with which the Common Shares are listed and traded on such date, or, if there is no such sale on that date, then on the last preceding date on which such a sale was reported, or (B) if the Common Shares are not listed on any national securities exchange but are quoted in the National Market System of the National Association of Securities Dealers Automated Quotation System (“NASDAQ-NMS”) on a last sale basis, the closing sale price reported on such date, or, if there is no such sale on that date then on the last preceding date on which such a sale was reported. If the Common Stock is not quoted on NASDAQ-NMS or listed on an exchange, or representative quotes are not otherwise available, the Fair Market Value shall mean the amount determined by the Committee in good faith to be the fair market value per Common Share, on a fully diluted basis.

(k) “Offering Period” shall mean, subject to the second sentence of Section 4 hereof, a period of six months, commencing on the first Trading Day coincident with or

immediately after June 1 and December 1, of each year and terminating on the last Trading Day in the period ending on or immediately prior to the following November 30 and May 31, respectively.

(l) “Plan” shall mean this PartnerRe Ltd. Swiss Share Purchase Plan, and any amendment thereto.

(m) “Purchase Price” shall mean an amount equal to 60 percent of the Fair Market Value of a Common Share on the Exercise Date.

(n) “Reserves” shall mean the number of Common Shares covered by each option under the Plan which have not yet been exercised and the number of Common Shares which have been authorized for issuance under the Plan but not yet placed under option.

(o) “Trading Day” shall mean a day on which national stock exchanges and NASDAQ are open for trading.

3. Eligibility. Each person who is an Employee on a given Enrollment Date shall be eligible to participate in the Plan.

4. Offering Periods. The Plan shall be implemented by consecutive Offering Periods continuing from the first Offering Period until terminated in accordance with Section 18 hereof. The Committee shall have the power to change the duration of Offering Periods (including the commencement dates thereof) with respect to future offerings without shareholder approval if such change is announced at least 15 days prior to the scheduled beginning of the first Offering Period to be affected thereafter.

5. Participation.

(a) An Employee may become a participant in the Plan for an Offering Period by enrolling on-line or by contacting a Fidelity phone representative at least 10 business days prior to the applicable Enrollment Date, unless a later time for enrolling in the Plan is set by the Committee for all Employees with respect to a given Offering Period. The employee must also complete a share purchase plan form in the form of Exhibit A to this Plan and submit it to the Company’s Human Resources Department.

(b) Contributions to the Plan by a participant who elects to make direct contributions by wire transfer may be made at any time during the applicable Offering Period, but no later than 10 business days prior to the Exercise Date, unless the participant withdraws from the Plan during such Offering Period pursuant to Section 9.

(c) At the time a participant enrolls and submits the share purchase plan form, he or she shall elect to pay contributions in an amount (expressed as a whole number percentage) not less than one percent and not exceeding eight percent of the Compensation which he or she receives during the Offering Period; provided, however, that in no event may any participant be permitted to contribute more than 5,000 CHF annually.

(d) All contributions made by a participant shall be credited to his or her account under the Plan. A participant may not make any additional payments into such account.

(e) A participant may discontinue his or her participation in the Plan, as provided in Section 9 hereof, at any time during the Offering Period as long as such withdrawal is made not less than 15 business days prior to the Exercise Date. Once an Offering

Period has commenced, a participant may not increase or decrease the rate of his or her contributions for that Offering Period, but may, during that Offering Period, increase or decrease the rate of his or her contributions for the next succeeding Offering Period, by making the election through the participant’s on-line brokerage account, at least 10 business days prior to the end of that Offering Period, authorizing a change in the contribution rate. A participant’s election shall remain in effect for successive Offering Periods unless terminated as provided in Section 9 hereof.

(f) At the time the option is exercised, in whole or in part, or at the time some or all of the Common Shares issued under the Plan are disposed of, the participant must make adequate provisions for the Company’s tax withholding obligations, if any, which arise upon the exercise of the option or the disposition of the Common Shares. At any time, the Company may, but will not be obligated to, withhold from the participant’s compensation the amount necessary for the Company to meet applicable withholding obligations, including any withholding required to make available to the Company any tax deductions or benefits attributable to sale or early disposition of Common Shares by the Employee.

6. Grant of Option. On the Enrollment Date of each Offering Period, each Employee participating in such Offering Period shall be granted an option to purchase on the Exercise Date of such Offering Period (at the applicable Purchase Price) up to a number of Common Shares determined by dividing such Employee’s contributions received by the Company prior to such Exercise Date and retained in the participant’s account as of the Exercise Date by the applicable Purchase Price; provided, however, that in no event shall an Employee be permitted to contribute more than 5,000 CHF annually. Exercise of the option shall occur as provided in Section 7 hereof, unless the participant has withdrawn pursuant to Section 9 hereof, and shall expire on the last day of the Offering Period.

7. Exercise of Option. Unless a participant withdraws from the Plan as provided in Section 9 hereof, his or her option for the purchase of shares will be exercised automatically on the Exercise Date, and, subject to the limitations set forth in Sections 6 and 11 hereof, the maximum number of full shares subject to option shall be purchased for such participant at the applicable Purchase Price with the contributions in his or her account. No fractional shares will be purchased; any contributions in a participant’s account which are not sufficient to purchase a full share shall be retained in the participant’s account for the subsequent Offering Period, subject to earlier withdrawal by the participant as provided in Section 9 hereof. Any other monies left over in a participant’s account after the Exercise Date shall also be retained in the participant’s account for the subsequent Offering Period. During a participant’s lifetime, a participant’s option to purchase shares hereunder is exercisable only by the participant.

8. Delivery. As promptly as practicable after each Exercise Date on which a purchase of shares occurs, the Company shall arrange the allocation of the Common Shares purchased upon exercise of a Participant’s option to the Participant’s account with a broker selected by the Company. The Common Shares shall be held by such brokerage account until such time as the Common Shares are sold or transferred by such Participant consistent with the requirements of Section 14 hereof.

9. Withdrawal; Termination of Employment.

(a) A participant may discontinue his or her participation in the Plan at any time but not less than 15 business days prior to the Exercise Date by withdrawing from the Plan through the participant’s on-line brokerage account. If a participant withdraws from the Plan during an Offering Period, he or she may not resume participation until the next Offering Period. He or she may resume participation for any other Offering Period by enrolling on-line or by contacting a Fidelity phone representative to enroll in the Plan at least 10 business days prior to the Enrollment Date for such Offering Period.

(b) Any provisions of the Plan to the contrary notwithstanding, a participant will be deemed to have withdrawn from the Plan if his or her contributions are not received by the Company 10 business days prior to the Exercise Date.

(c) Upon a participant’s ceasing to be an Employee, for any reason, he or she will be deemed to have elected to withdraw from the Plan and any monies credited to such participant’s account but not yet used to exercise the option will be returned to such participant or, in the case of his or her death, to the person or persons entitled thereto under Section 13 hereof, and such participant’s option will be automatically terminated.

(d) A participant’s withdrawal from an Offering Period will not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted by the Company.

10. Interest. No interest or other increment shall accrue or be payable with respect to any of the contributions of a participant in the Plan.

11. Shares.

(a) The maximum number of Common Shares which shall be made available for sale under the Plan shall be 400,000 shares, subject to adjustment upon changes in capitalization of the Company as provided in Section 17 hereof. If on a given Exercise Date the number of shares with respect to which options are to be exercised exceeds the number of shares then available under the Plan, the Company shall make a pro rata allocation of the shares remaining available for purchase in as uniform a manner as shall be practicable and as it shall determine to be equitable.

(b) No participant will have an interest or voting right in shares covered by his option until such option has been exercised.

(c) Shares to be delivered to a participant under the Plan will be registered in the name of the participant or in the name of the participant and his or her spouse.

12. Administration. The Committee shall have authority to administer the Plan or delegate certain matters to the Company’s Chief Executive Officer, including without limitation:

(a) Method of contribution

(b) Amount of contribution

(c) Annual limitation of contributions

(d) Amount of discount

(e) Adjustment to time period of restriction on sale or transfer of Common Shares

(f) Cut off time for withdrawal of contributions.

13. Designation of Beneficiary.

(a) A participant may file a written designation of a beneficiary who is to receive any shares and cash, if any, from the participant’s account under the plan in the event of such participant’s death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such participant of such shares or cash. In addition, a participant may file a written designation of a beneficiary who is to receive any cash from the participant’s account under the Plan in the event of such participant’s death prior to exercise of the option.

(b) Such designation of beneficiary may be changed by the participant at any time by written notice. In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such participant’s death, the Company shall deliver such shares or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

14. Transferability. Neither contributions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 13 hereof) by the participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds from an Offering Period in accordance with Section 9 hereof. Common Shares acquired by a Participant pursuant to the Plan may not be sold, transferred, pledged or otherwise encumbered or disposed of by the Participant during the two-year period beginning on the date of the acquisition of such shares by the Participant.

15. Use of Funds. All contributions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such contributions.

16. Reports. Individual accounts will be maintained for each participant in the Plan. Statements of account will be given by the Broker to participating Employees quarterly such statements shall set forth the amounts of contributions, the Purchase Price, the number of shares purchased and the remaining cash balance, if any.

17. Adjustments upon Changes in Capitalization.

(a) Changes in Capitalization. Subject to any required action by the shareholders of the Company, the Reserves as well as the price per Common Share covered by each option under the Plan which has not yet been exercised shall be proportionately adjusted for any increase or decrease in the number of issued Common Shares resulting from a share split, reverse share split, share dividend, combination or reclassification of the

Common Shares, or any other increase or decrease in the number of Common Shares effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Common Shares subject to an option.

(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Offering Period will terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Board.

(c) Merger or Asset Sale. In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger of the Company with or into another corporation, each option under the Plan shall be assumed or an equivalent option shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation, unless the Board determines, in the exercise of its sole discretion and in lieu of such assumption or substitution, to shorten the Offering Period then in progress by setting a new Exercise Date (the “New Exercise Date”). If the Board shortens the Offering Period then in progress in lieu of assumption or substitution in the event of a merger or sale of assets, the Board shall notify each participant in writing, at least 10 business days prior to the New Exercise Date, that the Exercise Date for his option has been changed to the New Exercise Date and that his option will be exercised automatically on the New Exercise Date, unless prior to such date he has withdrawn from the Offering Period as provided in Section 9 hereof. For purposes of this paragraph, an option granted under the Plan shall be deemed to be assumed if, following the sale of assets or merger, the option confers the right to purchase, for each share subject to the option immediately prior to the sale of assets or merger, the consideration (whether shares, cash or other securities or property) received in the sale of assets or merger by holders of Common Shares for each Common Share held on the effective date of the transaction (and if such holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Common Shares); provided, however, that if such consideration received in the sale of assets or merger was not solely common shares of the successor corporation or its parent (as defined in Section 424 (e) of the Code), the Board may, with the consent of the successor corporation and the participant, provide for the consideration to be received upon exercise of the option to be solely common shares of the successor corporation or its parent equal in fair market value to the per share consideration received by holders of Common Shares in the sale of assets or merger.

The Board may, if it so determines in the exercise of its sole discretion, also make provision for adjusting the Reserves, as well as the price per Common Share covered by each outstanding option, in the event the Company effects one or more reorganizations, recapitalizations, rights offerings or other increases or reductions of its outstanding Common Shares, and in the event of the Company being consolidated with or merged into any other corporation.

18. Amendment or Termination.

(a) The Committee may at any time and for any reason terminate or amend the Plan. Except as provided in Section 17 hereof, no such termination may adversely affect options previously granted; provided, that an Offering Period may be terminated by the Board on any Exercise Date if the Board determines that the termination of the Plan is in the best interests of the Company and its shareholders. Except as provided in Section 17 hereof, no amendment may make any change in any option theretofore granted which adversely affects the rights of any participant.

(b) Without shareholder consent and without regard to whether any participant rights may be considered to have been “adversely affected,” the Committee shall be entitled to change the Offering Periods, limit the frequency or number of changes in the amount withheld during an Offering Period, establish and change, at any time in its sole discretion, a formula for determining the conversion rate applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in the Company’s processing of properly completed withholding elections, establish reasonable waiting and adjustment periods or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Shares for each participant properly correspond with amounts withheld from the participant’s Compensation, and establish such other limitations or procedures as the Committee finds, in its sole discretion, advisable and consistent with the Plan.

19. Notices. All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.

20. Conditions upon Issuance of Shares. Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, the rules and regulations promulgated thereunder and the requirements of any shares exchange upon which the shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance.

As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present attention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law.

21. Term of Plan. The Plan shall become effective upon the earlier to occur of its adoption by the Board of Directors or its approval by the shareholders of the Company. It shall continue in effect thereafter until the earlier to occur of (i) the tenth (10^th) year anniversary of the date on which the shareholders of the Company approve the Plan or (ii) the Committee terminates the Plan under Section 18 hereof.

22. Section 409A of the Code. The Plan is intended to comply with the requirements of Section 409A of the Code, and the provisions of the Plan shall be interpreted in a manner that satisfies the requirements of Section 409A of the Code, and the Plan shall be operated accordingly. If any provision of the Plan would otherwise frustrate or conflict with this intent, the provision, term or condition will be interpreted and deemed amended so as to avoid this conflict. For the avoidance of doubt, nothing in the Plan is intended to guarantee that participants of the Plan will not be subjected to the payment of “additional tax” or interest under Section 409A, and nothing in the Plan permits participants of the Plan to seek or obtain such indemnification from the Company for any such “additional tax” or interest.

EX-15

Exhibit 15

August 4, 2011

PartnerRe Ltd.

Wellesley House

90 Pitts Bay Road

Pembroke HM 08

Bermuda

We have reviewed, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the unaudited condensed consolidated interim financial information of PartnerRe Ltd. and subsidiaries for the periods ended June 30, 2011 and 2010, as indicated in our report dated August 4, 2011; because we did not perform an audit, we expressed no opinion on that information.

We are aware that our report referred to above, which is included in your Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, is incorporated by reference in Registration Statements Nos. 333-11998, 333-107242, 333-129762, 333-157585, 333-161207, 333-163445 and 333-163446 on Form S-8, and in Registration Statements Nos. 333-124713, 333-133573 and 333-158531 on Form S-3.

We also are aware that the aforementioned report, pursuant to Rule 436(c) under the Securities Act of 1933, is not considered a part of the Registration Statement prepared or certified by an accountant or a report prepared or certified by an accountant within the meaning of Sections 7 and 11 of that Act.

/s/ Deloitte & Touche Ltd.

Deloitte & Touche Ltd.

Hamilton, Bermuda

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Constantinos Miranthis, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of PartnerRe Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2011

/s/    CONSTANTINOS MIRANTHIS        

Constantinos Miranthis

President & Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, William Babcock, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of PartnerRe Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2011

/s/    WILLIAM BABCOCK        

William Babcock

Executive Vice President & Chief Financial Officer

EX-32

Exhibit 32

SECTION 906 CERTIFICATIONS

The certification set forth below is being submitted in connection with the Quarterly Report on Form 10-Q of PartnerRe Ltd. (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.

Constantinos Miranthis, the Chief Executive Officer, and William Babcock, the Chief Financial Officer, each certifies that, to the best of his knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of PartnerRe Ltd.

Date: August 4, 2011

/s/    CONSTANTINOS MIRANTHIS        

Constantinos Miranthis

President & Chief Executive Officer

/s/    WILLIAM BABCOCK        

William Babcock

Executive Vice President & Chief Financial Officer

XML



Unaudited Condensed Consolidated Balance Sheets (Parentheticals) (USD $) In Thousands, except Share data	Jun. 30, 2011	Dec. 31, 2010
Balance Sheet Parenthetical Disclosure Assets
Fixed maturities, trading securities, amortized cost	$ 13,984,225	$ 12,394,797
Short-term investments, trading securities, amortized cost	216,881	49,132
Equities, trading securities, cost	880,222	942,745
Funds held - directly managed, cost	1,362,997	1,751,276
Balance Sheet Parenthetical Disclosures Equity
Common shares, par value	$ 1	$ 1
Common shares, shares issued	84,569,310	84,033,089
Other accumulated comprehensive loss, tax	5,838	4,872
Common shares held in treasury, shares	16,831,534	14,046,895
Preferred shares, par value	$ 1	$ 1
Preferred shares, shares issued	35,750,000	20,800,000
Preferred shares, shares outstanding	35,750,000	20,800,000
Aggregate liquidation value	$ 893,750	$ 520,000

XML



Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $) In Thousands, except Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Revenues
Gross premiums written	$ 1,082,205	$ 1,140,175	$ 2,639,766	$ 3,049,501
Net premiums written	1,056,467	1,112,735	2,526,887	2,896,899
Decrease (increase) in unearned premiums	50,978	(8,104)	(354,853)	(638,489)
Net premiums earned	1,107,445	1,104,631	2,172,034	2,258,410
Net investment income	158,328	174,454	309,962	347,576
Net realized and unrealized investment gains (losses)	78,199	46,046	(34,000)	191,519
Other income	1,596	753	3,408	2,028
Total revenues	1,345,568	1,325,884	2,451,404	2,799,533
Expenses
Losses and loss expenses and life policy benefits	814,523	704,631	2,421,740	1,716,967
Acquisition costs	229,251	244,144	437,100	464,251
Other operating expenses	113,694	160,151	217,991	288,286
Interest expense	12,214	12,803	24,514	19,935
Amortization of intangible assets	9,165	7,833	17,992	12,636
Net foreign exchange gains	(8,737)	(11,021)	(9,433)	(14,648)
Total expenses	1,170,110	1,118,541	3,109,904	2,487,427
Income (loss) before taxes and interest in (losses) earnings of equity investments	175,458	207,343	(658,500)	312,106
Income tax expense	50,085	17,762	23,828	45,316
Interest in (losses) earnings of equity investments	(1,188)	1,346	(443)	3,791
Net income (loss)	124,185	190,927	(682,771)	270,581
Preferred dividends	8,631	8,631	17,263	17,263
Net income (loss) available to common shareholders	115,554	182,296	(700,034)	253,318
Comprehensive income (loss)
Net income (loss)	124,185	190,927	(682,771)	270,581
Change in currency translation adjustment	6,303	(105,335)	44,084	(174,078)
Change in other accumulated comprehensive loss, net of tax	(1,920)	(1,321)	(2,155)	(5,254)
Comprehensive income (loss)	$ 128,568	$ 84,271	$ (640,842)	$ 91,249
Per share data
Basic net income (loss)	$ 1.71	$ 2.36	$ (10.32)	$ 3.19
Diluted net income (loss)	$ 1.69	$ 2.31	$ (10.32)	$ 3.13
Weighted average number of common shares outstanding	67,628,052	77,365,445	67,811,366	79,519,198
Weighted average number of common shares and common share equivalents outstanding	68,442,300	78,796,431	67,811,366	81,050,662
Dividends declared per common share	$ 0.60	$ 0.50	$ 1.15	$ 1.00

XML



Derivatives (Details) (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Derivative [Line Items]
Asset derivatives at fair value		$ 70,222
Liability derivatives at fair value		(44,685)
Fair value		25,537
Designated as hedging instrument [Member]
Derivative [Line Items]
Asset derivatives at fair value		0
Liability derivatives at fair value		(1,160)
Fair value		(1,160)
Designated as hedging instrument [Member] | Forward Contracts Net Investment Hedge [Member]
Derivative [Line Items]
Asset derivatives at fair value		0
Liability derivatives at fair value		(1,160)
Notional value		198,448
Fair value		(1,160)
Foreign exchange forward contracts [Member] | Derivates not designated as hedges [Member]
Derivative [Line Items]
Asset derivatives at fair value	11,634	27,880
Liability derivatives at fair value	(4,512)	(12,487)
Notional value	2,956,150	1,770,448
Fair value	7,122	15,393
Foreign currency option contracts [Member] | Derivates not designated as hedges [Member]
Derivative [Line Items]
Asset derivatives at fair value	2,921	3,516
Liability derivatives at fair value	(470)	0
Notional value	163,304	104,386
Fair value	2,451	3,516
Futures contracts [Member] | Derivates not designated as hedges [Member]
Derivative [Line Items]
Asset derivatives at fair value	6,398	30,593
Liability derivatives at fair value	(19,613)	(7,956)
Notional value	2,334,365	1,756,811
Fair value	(13,215)	22,637
Credit default swaps (protection purchased) [Member] | Derivates not designated as hedges [Member]
Derivative [Line Items]
Asset derivatives at fair value	4	93
Liability derivatives at fair value	(2,162)	(2,407)
Notional value	109,890	113,752
Fair value	(2,158)	(2,314)
Credit default swaps (assumed risks) [Member] | Derivates not designated as hedges [Member]
Derivative [Line Items]
Asset derivatives at fair value	906	533
Liability derivatives at fair value	0	(401)
Notional value	27,500	27,500
Fair value	906	132
Insurance-linked securities [Member] | Derivates not designated as hedges [Member]
Derivative [Line Items]
Asset derivatives at fair value	274	1,320
Liability derivatives at fair value	(15,126)	(1,393)
Notional value	95,848	88,765
Fair value	(14,852)	(73)
Total return swaps [Member] | Derivates not designated as hedges [Member]
Derivative [Line Items]
Asset derivatives at fair value	4,685	6,041
Liability derivatives at fair value	(11,459)	(12,848)
Notional value	159,720	161,408
Fair value	(6,774)	(6,807)
Interest rate swaps [Member] | Derivates not designated as hedges [Member]
Derivative [Line Items]
Asset derivatives at fair value	52	246
Liability derivatives at fair value	(5,203)	(6,033)
Notional value	0	0
Fair value	(5,151)	(5,787)
Derivates not designated as hedges [Member]
Derivative [Line Items]
Asset derivatives at fair value	26,874	70,222
Liability derivatives at fair value	(58,545)	(43,525)
Fair value	$ (31,671)	$ 26,697

XML



Document and Entity Information	3 Months Ended
	Jun. 30, 2011	Aug. 01, 2011
Document And Entity Information [Abstract]
Document type	10-Q
Document period end date	Jun. 30, 2011
Amendment flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Entity registrant name	PARTNERRE LTD
Entity central index key	0000911421
Entity current reporting status	Yes
Entity voluntary filers	No
Current fiscal year end date	--12-31
Entity filer category	Large Accelerated Filer
Entity well known seasoned issuer	Yes
Entity common stock shares outstanding		67,739,564

XML



Net Income (Loss) Per Share (Details) (USD $) In Thousands, except Share data	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Numerator [Abstract]
Net income (loss)	$ 124,185	$ 190,927	$ (682,771)	$ 270,581
Dividends on preferred shares	(8,631)	(8,631)	(17,263)	(17,263)
Net income (loss) available to common shareholders	$ 115,554	$ 182,296	$ (700,034)	$ 253,318
Denominator [Abstract]
Weighted average number of common shares outstanding	67,628,052	77,365,445	67,811,366	79,519,198
Share options and other	814,200	1,431,000	0	1,531,500
Weighted average number of common shares and common share equivalents outstanding	68,442,300	78,796,431	67,811,366	81,050,662
Basic net income (loss)	$ 1.71	$ 2.36	$ (10.32)	$ 3.19
Diluted net income (loss)	$ 1.69	$ 2.31	$ (10.32)	$ 3.13
Notes to Net Income (Loss) Per Share [Abstract]
Weighted average number of common shares and common share equivalents outstanding including potentially dilutive securities			68,769,900
Stock Compensation Plans [Member]
Notes to Net Income (Loss) Per Share [Abstract]
Share options excluded from computation of weighted average number of common share and common share equivalents outstanding			1,253,600	840,400

XML



Shareholders' Equity

6 Months Ended

Jun. 30, 2011

Stockholders' Equity

Stockholders' Equity Disclosure [Text Block]

6. Shareholders' Equity

Series E Cumulative Redeemable Preferred Shares

In June 2011, the Company issued 14,950,000 of 7.25% Series E cumulative redeemable preferred shares (Series E preferred shares) for a total consideration of $362 million after underwriting discounts, commissionsand other related expenses totaling $12 million. The net proceeds were used for general corporate purposes.On or afterJune 1, 2016, the Company may redeem the Series E preferred shares, in whole at any time or in part from time to time, at $25.00 per share plus accrued and unpaid dividends, if any, without interest. The Series E preferred shares are also redeemable at any time upon certain changes in tax law. Dividends on the Series E preferred shares are cumulative from the date of issuance and are payable quarterly in arrears, commencing September 1, 2011. In the event of liquidation of the Company, the holders of outstanding Series E preferred shares would have preference over the common shareholders and would receive a distribution of $25.00 per share, or an aggregate value of $374 million, plus accrued and unpaid dividends, if any.

XML



Commitments and Contingencies (Details) (USD $) In Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2011
Financing Receivable Recorded Investment [Line Items]
Financing receivables, purchases during the period	$ 66.0	$ 66.0
Financing receivables, sales during the period	0	0
Performing [Member]
Financing Receivable Recorded Investment [Line Items]
Financing receivable	101.6	101.6
Performing [Member] | Commercial Real Estate Other Receivable [Member]
Financing Receivable Recorded Investment [Line Items]
Financing receivable	49.8	49.8
Performing [Member] | Residential Prime Financing Receivable [Member]
Financing Receivable Recorded Investment [Line Items]
Financing receivable	51.8	51.8
Nonperforming [Member]
Financing Receivable Recorded Investment [Line Items]
Financing receivable	$ 0	$ 0

XML



Shareholders' Equity (Details) (USD $)	6 Months Ended			3 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010	Jun. 30, 2011 Series E Cumulative Redeemable Preferred Shares [Member]
Redeemable Preferred Shares
Preferred shares, shares issued	35,750,000		20,800,000	14,950,000
Preferred shares, dividend rate				7.25%
Net proceeds from issuance of preferred shares	$ 361,722,000	$ 0		$ 362,000,000
Issuance costs				12,000,000
Preferred shares, redemption price per share				$ 25,000,000
Aggregate liquidation value	$ 893,750,000		$ 520,000,000	$ 374,000,000

XML



Fair Value (Tables)

6 Months Ended

Jun. 30, 2011

Fair Value

Financial instruments measured at fair value and categorized between Levels 1, 2 and 3

			Quoted prices in				Significant
			active markets for		Significant other		unobservable
			identical assets		observable inputs		inputs
June 30, 2011			(Level 1)		(Level 2)		(Level 3)		Total
Fixed maturities
	U.S. government and agencies		$	—	$	1,486,790	$	86,782	$	1,573,572
	Non-U.S. sovereign government,
		supranational and government related		—		3,258,355		—		3,258,355
	Corporate			—		5,713,985		116,428		5,830,413
	Asset-backed securities			—		394,046		261,843		655,889
	Residential mortgage-backed securities			—		2,999,005		—		2,999,005
	Other mortgage-backed securities			—		89,710		1		89,711
Fixed maturities			$	—	$	13,941,891	$	465,054	$	14,406,945
Short-term investments			$	—	$	212,769	$	2,923	$	215,692
Equities
	Consumer noncyclical		$	138,638	$	178	$	—	$	138,816
	Energy			96,782		1,051		—		97,833
	Finance			89,054		617		163		89,834
	Technology			78,939		—		—		78,939
	Communications			76,188		33		—		76,221
	Industrials			71,405		—		—		71,405
	Consumer cyclical			57,087		86		—		57,173
	Insurance			38,447		—		—		38,447
	Other			70,343		408		—		70,751
	Mutual funds and exchange traded funds			58,736		210,216		6,542		275,494
Equities			$	775,619	$	212,589	$	6,705	$	994,913
Other invested assets
	Derivative assets
		Foreign exchange forward contracts	$	—	$	11,634	$	—	$	11,634
		Foreign currency option contracts		—		2,921		—		2,921
		Futures contracts		6,179		219		—		6,398
		Credit default swaps (protection purchased)		—		4		—		4
		Credit default swaps (assumed risks)		—		906		—		906
		Insurance-linked securities		23		—		251		274
		Total return swaps		—		379		4,306		4,685
		Interest rate swaps		—		52		—		52
	Other assets			—		—		74,018		74,018
	Derivative liabilities
		Foreign exchange forward contracts		—		(4,512)		—		(4,512)
		Foreign currency option contracts		—		(470)		—		(470)
		Futures contracts		(19,126)		(487)		—		(19,613)
		Credit default swaps (protection purchased)		—		(2,162)		—		(2,162)
		Insurance-linked securities		(493)		—		(14,633)		(15,126)
		Total return swaps		—		—		(11,459)		(11,459)
		Interest rate swaps		—		(5,203)		—		(5,203)
	Other liabilities			—		(1,570)		—		(1,570)
Other invested assets			$	(13,417)	$	1,711	$	52,483	$	40,777
Funds held – directly managed
	U.S. government and agencies		$	—	$	230,481	$	355	$	230,836
	Non-U.S. sovereign government,
		supranational and government related		—		313,284		—		313,284
	Corporate			—		550,644		—		550,644
	Short-term investments			—		42,330		—		42,330
	Other invested assets			—		—		21,720		21,720
Funds held – directly managed			$	—	$	1,136,739	$	22,075	$	1,158,814
Total			$	762,202	$	15,505,699	$	549,240	$	16,817,141
			Quoted prices in				Significant
			active markets for		Significant other		unobservable
			identical assets		observable inputs		inputs
December 31, 2010			(Level 1)		(Level 2)		(Level 3)		Total
Fixed maturities
	U.S. government and agencies		$	—	$	917,600	$	55,124	$	972,724
	Non-U.S. sovereign government,
		supranational and government related		—		2,819,193		—		2,819,193
	Corporate			—		6,066,865		76,982		6,143,847
	Asset-backed securities			—		343,518		213,139		556,657
	Residential mortgage-backed securities			—		2,305,525		—		2,305,525
	Other mortgage-backed securities			—		26,153		290		26,443
Fixed maturities			$	—	$	12,478,854	$	345,535	$	12,824,389
Short-term investments			$	—	$	49,397	$	—	$	49,397
Equities
	Consumer noncyclical		$	186,016	$	—	$	—	$	186,016
	Technology			119,214		—		—		119,214
	Energy			118,372		—		—		118,372
	Finance			112,309		—		2,486		114,795
	Communications			110,982		—		—		110,982
	Industrials			100,572		—		—		100,572
	Consumer cyclical			81,595		—		—		81,595
	Insurance			48,611		—		—		48,611
	Other			90,220		—		—		90,220
	Mutual funds and exchange traded funds			60,372		—		40,927		101,299
Equities			$	1,028,263	$	—	$	43,413	$	1,071,676
Other invested assets
	Derivative assets
		Foreign exchange forward contracts	$	—	$	27,880	$	—	$	27,880
		Foreign currency option contracts		—		3,516		—		3,516
		Futures contracts		30,593		—		—		30,593
		Credit default swaps (protection purchased)		—		93		—		93
		Credit default swaps (assumed risks)		—		533		—		533
		Insurance-linked securities		1,320		—		—		1,320
		Total return swaps		—		449		5,592		6,041
		Interest rate swaps		—		246		—		246
	Other assets			—		—		86,278		86,278
	Derivative liabilities
		Foreign exchange forward contracts		—		(13,647)		—		(13,647)
		Futures contracts		(7,956)		—		—		(7,956)
		Credit default swaps (protection purchased)		—		(2,407)		—		(2,407)
		Credit default swaps (assumed risks)		—		(401)		—		(401)
		Insurance-linked securities		(695)		—		(698)		(1,393)
		Total return swaps		—		—		(12,848)		(12,848)
		Interest rate swaps		—		(6,033)		—		(6,033)
	Other liabilities			—		(441)		—		(441)
Other invested assets			$	23,262	$	9,788	$	78,324	$	111,374
Funds held – directly managed
	U.S. government and agencies		$	—	$	288,164	$	368	$	288,532
	Non-U.S. sovereign government,
		supranational and government related		—		384,553		—		384,553
	Corporate			—		798,587		—		798,587
	Mortgage/asset-backed securities			—		—		12,118		12,118
	Short-term investments			—		38,613		—		38,613
	Other invested assets			—		—		20,528		20,528
Funds held – directly managed			$	—	$	1,509,917	$	33,014	$	1,542,931
Total			$	1,051,525	$	14,047,956	$	500,286	$	15,599,767

Reconciliation of beginning and ending balances for all financial instruments measured at fair value using Level 3 inputs

															Change in
						Realized and										unrealized
						unrealized										investment
						investment						Net				gains (losses)
				Balance at		gains (losses)						transfers		Balance		relating to
For the three months ended			beginning		included in						(out of)/into		at end		assets held at
June 30, 2011			of period		net income		Purchases		Sales		Level 3(a)		of period		end of period
Fixed maturities
	U.S. government and agencies		$	55,929	$	819	$	30,064	$	(30)	$	—	$	86,782	$	819
	Corporate			115,107		2,049		84		(812)		—		116,428		2,049
	Asset-backed securities			262,408		7,707		47,130		(55,402)		—		261,843		(2,660)
	Residential mortgage-backed
		securities		4,301		846		—		(5,147)		—		—		—
	Other mortgage-backed securities			576		(191)		—		(384)		—		1		(166)
Fixed maturities			$	438,321	$	11,230	$	77,278	$	(61,775)	$	—	$	465,054	$	42
Short-term investments			$	1,204	$	(730)	$	2,449	$	—	$	—	$	2,923	$	(730)
Equities
	Finance		$	161	$	2	$	—	$	—	$	—	$	163	$	2
	Mutual funds and exchange
		traded funds		41,451		594		—		(35,503)		—		6,542		(804)
Equities			$	41,612	$	596	$	—	$	(35,503)	$	—	$	6,705	$	(802)
Other invested assets
	Derivatives, net		$	(17,042)	$	322	$	(4,815)	$	—	$	—	$	(21,535)	$	234
	Other			84,662		(1,303)		3,568		(12,909)		—		74,018		(1,016)
Other invested assets			$	67,620	$	(981)	$	(1,247)	$	(12,909)	$	—	$	52,483	$	(782)
Funds held – directly managed
	U.S. government and agencies		$	366	$	(11)	$	—	$	—	$	—	$	355	$	(11)
	Other invested assets			22,456		(736)		—		—		—		21,720		(736)
Funds held – directly managed			$	22,822	$	(747)	$	—	$	—	$	—	$	22,075	$	(747)
Total			$	571,579	$	9,368	$	78,480	$	(110,187)	$	—	$	549,240	$	(3,019)
____________
(a) The Company’s policy is to recognize the transfers between the hierarchy levels at the beginning of the period.

				Realized and								Change in
					unrealized								unrealized
					investment		Net		Net				investment gains
			Balance at		gains (losses)		purchases,		transfers		Balance		(losses) relating
For the three months ended		beginning		included in		sales and		(out of)/into		at end of		to assets held
June 30, 2010		of period		net income		settlements		Level 3 (a)		period		at end of period
Fixed maturities
	U.S. government and agencies	$	9,720	$	272	$	7	$	—	$	9,999	$	272
	Corporate		10,057		300		5,080		—		15,437		300
	Asset-backed securities		84,984		7,359		133,615		—		225,958		7,359
	Residential mortgage-backed securities		95,029		—		(95,029)		—		—		—
	Other mortgage-backed securities		811		123		(80)		—		854		123
Fixed maturities		$	200,601	$	8,054	$	43,593	$	—	$	252,248	$	8,054
Equities
	Finance	$	2,459	$	(1,039)	$	695	$	—	$	2,115	$	(1,039)
	Mutual funds and exchange traded funds		35,670		(1,058)		5,000		—		39,612		(1,058)
Equities		$	38,129	$	(2,097)	$	5,695	$	—	$	41,727	$	(2,097)
Other invested assets
	Derivatives, net	$	(7,998)	$	1,772	$	(8,353)	$	—	$	(14,579)	$	1,772
	Other		25,918		(253)		24,624		—		50,289		(253)
Other invested assets		$	17,920	$	1,519	$	16,271	$	—	$	35,710	$	1,519
Funds held – directly managed
	U.S. government and agencies	$	204	$	153	$	—	$	—	$	357	$	153
	Mortgage/asset-backed securities		13,260		(683)		—		—		12,577		(683)
	Other invested assets		30,348		(3,523)		—		—		26,825		(3,523)
Funds held – directly managed		$	43,812	$	(4,053)	$	—	$	—	$	39,759	$	(4,053)
Total		$	300,462	$	3,423	$	65,559	$	—	$	369,444	$	3,423

															Change in
						Realized and										unrealized
						unrealized										investment
						investment						Net				gains (losses)
				Balance at		gains (losses)						transfers		Balance		relating to
For the six months ended			beginning		included in						into		at end		assets held at
June 30, 2011			of period		net loss		Purchases		Sales		Level 3(a)		of period		end of period
Fixed maturities
	U.S. government and agencies		$	55,124	$	1,624	$	30,064	$	(30)	$	—	$	86,782	$	1,624
	Corporate			76,982		(37,066)		40,878		(4,546)		40,180		116,428		2,368
	Asset-backed securities			213,139		10,678		101,644		(63,618)		—		261,843		4,257
	Residential mortgage-backed
		securities		—		1,385		4,212		(5,597)		—		—		—
	Other mortgage-backed securities			290		(224)		408		(473)		—		1		(203)
Fixed maturities			$	345,535	$	(23,603)	$	177,206	$	(74,264)	$	40,180	$	465,054	$	8,046
Short-term investments			$	—	$	(1,069)	$	3,992	$	—	$	—	$	2,923	$	(1,069)
Equities
	Finance		$	2,486	$	239	$	—	$	(2,562)	$	—	$	163	$	13
	Mutual funds and exchange
		traded funds		40,927		1,242		—		(35,627)		—		6,542		(382)
Equities			$	43,413	$	1,481	$	—	$	(38,189)	$	—	$	6,705	$	(369)
Other invested assets
	Derivatives, net		$	(7,954)	$	(8,803)	$	(4,778)	$	—	$	—	$	(21,535)	$	(8,893)
	Other			86,278		(3,207)		6,548		(15,601)		—		74,018		(2,497)
Other invested assets			$	78,324	$	(12,010)	$	1,770	$	(15,601)	$	—	$	52,483	$	(11,390)
Funds held – directly managed
	U.S. government and agencies		$	368	$	(13)	$	—	$	—	$	—	$	355	$	(13)
	Mortgage/asset-backed securities			12,118		(150)		—		(11,968)		—		—		—
	Other invested assets			20,528		1,192		—		—		—		21,720		1,192
Funds held – directly managed			$	33,014	$	1,029	$	—	$	(11,968)	$	—	$	22,075	$	1,179
Total			$	500,286	$	(34,172)	$	182,968	$	(140,022)	$	40,180	$	549,240	$	(3,603)

					Realized and								Change in
						unrealized								unrealized
						investment		Net		Net				investment gains
				Balance at		gains (losses)		purchases,		transfers		Balance		(losses) relating
For the six months ended			beginning		included in		sales and		(out of)/into		at end of		to assets held
June 30, 2010			of period		net income		settlements		Level 3 (a)		period		at end of period
Fixed maturities
	U.S. government and agencies		$	4,286	$	272	$	9,727	$	(4,286)	$	9,999	$	272
	Corporate			15,041		423		10,900		(10,927)		15,437		423
	Asset-backed securities			99,952		4,601		124,305		(2,900)		225,958		4,576
	Residential mortgage-backed securities			77,440		191		(77,631)		—		—		—
	Other mortgage-backed securities			874		153		(173)		—		854		153
Fixed maturities			$	197,593	$	5,640	$	67,128	$	(18,113)	$	252,248	$	5,424
Equities
	Finance		$	2,488	$	(1,068)	$	695	$	—	$	2,115	$	(1,068)
	Industrials			805		(84)		(721)		—		—		—
	Mutual funds and exchange traded funds			34,810		(198)		5,000		—		39,612		(198)
Equities			$	38,103	$	(1,350)	$	4,974	$	—	$	41,727	$	(1,266)
Other invested assets
	Derivatives, net		$	(9,361)	$	4,315	$	(17,699)	$	8,166	$	(14,579)	$	2,490
	Other			25,815		(169)		24,643		—		50,289		(169)
Other invested assets			$	16,454	$	4,146	$	6,944	$	8,166	$	35,710	$	2,321
Funds held – directly managed
	U.S. government and agencies		$	375	$	(18)	$	—	$	—	$	357	$	(18)
	Non-U.S. sovereign government,
		supranational and government related		3,417		(13)		(3,404)		—		—		—
	Mortgage/asset-backed securities			142		(4,431)		—		16,866		12,577		(4,426)
	Other invested assets			35,685		(8,860)		—		—		26,825		(8,860)
Funds held – directly managed			$	39,619	$	(13,322)	$	(3,404)	$	16,866	$	39,759	$	(13,304)
Total			$	291,769	$	(4,886)	$	75,642	$	6,919	$	369,444	$	(6,825)

Change in fair value of financial instruments subject to fair value option

	For the three		For the three		For the six		For the six
	months ended		months ended		months ended		months ended
	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Fixed maturities	$	130,907	$	165,665	$	(9,321)	$	264,762
Short-term investments		194		7		(446)		(2,418)
Equities		(30,197)		(126,610)		(14,079)		(101,198)
Other invested assets		(3,689)		(226)		(3,333)		(142)
Funds held – directly managed		10,756		19,988		(1,494)		31,167
Total	$	107,971	$	58,824	$	(28,673)	$	192,171

Carrying values and fair values of financial instrument liabilities

	June 30, 2011				December 31, 2010
	Carrying Value		Fair Value		Carrying Value		Fair Value
Debt related to senior notes(1)		750,000		793,773		750,000		781,950
Debt related to capital efficient notes (2)		63,384		61,133		63,384		59,261

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Significant Accounting Policies

6 Months Ended

Jun. 30, 2011

Significant Accounting Policies

Basis Of Presentation And Significant Accounting Policies [Text Block]

2. Significant Accounting Policies

The Company's Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP)for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. The Unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries. Intercompany accounts and transactions have been eliminated. To facilitate comparison of information across periods, certain reclassifications have been made to prior year amounts to conform to the current year's presentation.

The preparation of financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. While Management believes that the amounts included in the Unaudited Condensed Consolidated Financial Statements reflect its best estimates and assumptions, actual results could differ from those estimates. The Company's principal estimates include:

•       Unpaid losses and loss expenses;

•       Policy benefits for life and annuity contracts;

•        Gross and net premiums written and net premiums earned;

•       Recoverability of deferred acquisition costs;

•       Recoverability of deferred tax assets;

•       Valuation of goodwill and intangible assets; and

•        Valuation of certain assets and derivative financial instruments that are measured using significant unobservable inputs.

In the opinion of Management, all adjustments (which include normal recurring adjustments) necessary for a fair presentation of results for the interim periods have been made. As the Company's reinsurance operations are exposed to low-frequency, high-severity risk events, some of which are seasonal, results for certain interim periods may include unusually low loss experience, while results for other interim periods may include significant catastrophic losses. Consequently, the Company's results for interim periods are not necessarily indicative of results for the full year. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2011

Commitments and Contingencies

Commitments and Contingencies

8. Commitments and Contingencies

(a) Concentration of Credit Risk

Financing receivables

Included in the Company's Other invested assets are certain notes receivable which meet the definition of financing receivables and are accounted for using the cost method of accounting. Performance of these notes receivable to date has been within expectations. At June 30, 2011 and December 31, 2010, none of the Company's notes receivable are past due or in default and, accordingly, the Company believes that an allowance for credit losses related to these notes receivable is not required at June 30, 2011 and December 31, 2010.

The Company monitors the performance of the notes receivable based on the type of underlying collateral and by assigning a “performing” or a “non-performing” indicator of credit quality to each individual receivable. At June 30, 2011, the Company's notes receivable of $101.6 million were all performing and were collateralized by residential property and commercial property of $51.8 million and $49.8 million, respectively.

TheCompany purchased financing receivables of $66.0 million during the three months andsix months ended June 30, 2011. There were no sales of financing receivables during the three months and six months ended June 30, 2011,however, the outstanding balance has been reduced by settlements of the underlying debt.

(b) Legal Proceedings

There has been no significant change in legal proceedings at June 30, 2011compared toDecember 31, 2010. See Note 18(e) to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010.

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Net Income (Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2011

Disclosure - Net Income (Loss) Per Share [Abstract]

Schedule Of Net Income Per Share Table [Text Block]

			For the three		For the three		For the six		For the six
			months ended		months ended		months ended		months ended
			June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Numerator:
	Net income (loss)		$	124,185	$	190,927	$	(682,771)	$	270,581
	Less: preferred dividends			(8,631)		(8,631)		(17,263)		(17,263)
	Net income (loss) available to common shareholders		$	115,554	$	182,296	$	(700,034)	$	253,318
Denominator:
	Weighted number of common shares outstanding - basic			67,628.1		77,365.4		67,811.4		79,519.2
	Share options and other (1)			814.2		1,431.0		—		1,531.5
	Weighted average number of common shares and
		common share equivalents outstanding - diluted		68,442.3		78,796.4		67,811.4		81,050.7
Basic net income (loss) per share			$	1.71	$	2.36	$	(10.32)	$	3.19
Diluted net income (loss) per share(1)			$	1.69	$	2.31	$	(10.32)	$	3.13

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Segment Information

6 Months Ended

Jun. 30, 2011

Segment Information

Segment Information

9. Segment Information

The Company monitors the performance of its operations in three segments, Non-life, Life and Corporate and Other as described in Note 22 to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010. The Non-life segment is further divided into four sub-segments: North America, Global (Non-U.S.) Property and Casualty (Global(Non-U.S.) P&C), Global (Non-U.S.) Specialty and Catastrophe. Following the completion of the Company's integration of PARIS RE Holdings Limited into its other Non-life sub-segments, and to reflect other changes in management responsibilities for certain lines of business and treaties, the Company redefined its financial reporting segments. The comparative data that was previously presented in the Company's Form 10-Q for the three months and six months ended June 30, 2010 has been recast to conform to the current period presentation.

Because the Company does not manage its assets by segment, net investment income is not allocated to the Non-life segment. However, because of the interest-sensitive nature of some of the Company's Life products, net investment income is considered in Management's assessment of the profitability of the Life segment. The following items are not considered in evaluating the results of the Non-life and Life segments: net realized and unrealized investment gains and losses, interest expense, amortization of intangible assets, net foreign exchange gains and losses, income tax expense or benefit and interest in earnings and losses of equity investments. Segment results are shown before consideration of intercompany transactions.

Management measures results for the Non-life segment on the basis of the loss ratio, acquisition ratio, technical ratio, other operating expense ratio and combined ratio (all defined below). Management measures results for the Non-life sub-segments on the basis of the loss ratio, acquisition ratio and technical ratio. Management measures results for the Life segment on the basis of the allocated underwriting result, which includes revenues from net premiums earned, other income or loss and allocated net investment income for Life, and expenses from life policy benefits, acquisition costs and other operating expenses.

The followingtables provide a summary of the segment revenues and results for the three months and six months ended June 30, 2011 and 2010 (in millions of U.S. dollars, except ratios):

Segment Information
For the three months ended June 30, 2011
					Global			Global						Total
		North			(Non-U.S.)			(Non-U.S.)						Non-life			Life		Corporate
		America			P&C			Specialty			Catastrophe			Segment			Segment		and Other		Total
Gross premiums written		$	242		$	122		$	350		$	169		$	883		$	195	$	4	$	1,082
Net premiums written		$	242		$	121		$	333		$	161		$	857		$	195	$	4	$	1,056
Decrease (increase) in unearned premiums			19			72			8			(51)			48			6		(3)		51
Net premiums earned		$	261		$	193		$	341		$	110		$	905		$	201	$	1	$	1,107
Losses and loss expenses and
life policy benefits			(190)			(127)			(206)			(123)			(646)			(166)		(2)		(814)
Acquisition costs			(63)			(53)			(78)			(9)			(203)			(26)		—		(229)
Technical result		$	8		$	13		$	57		$	(22)		$	56		$	9	$	(1)	$	64
Other income															—			—		1		1
Other operating expenses															(71)			(13)		(30)		(114)
Underwriting result														$	(15)		$	(4)		n/a	$	(49)
Net investment income																		16		142		158
Allocated underwriting result	(1)																$	12		n/a		n/a
Net realized and unrealized investment gains																				78		78
Interest expense																				(12)		(12)
Amortization of intangible assets																				(9)		(9)
Net foreign exchange gains																				9		9
Income tax expense																				(50)		(50)
Interest in losses of equity investments																				(1)		(1)
Net income																				n/a	$	124
Loss ratio (2)			72.8	%		65.9	%		60.3	%		111.7	%		71.4	%
Acquisition ratio (3)			24.1			27.6			22.9			8.1			22.4
Technical ratio (4)			96.9	%		93.5	%		83.2	%		119.8	%		93.8	%
Other operating expense ratio (5)															7.9
Combined ratio (6)															101.7	%

_______________

(1)       Allocated underwriting result is defined as net premiums earned, other income or loss 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 defined as the sum of the technical ratio and the other operating expense ratio.

Segment Information
For the three months ended June 30, 2010
				Global			Global						Total
	North			(Non-U.S.)			(Non-U.S.)						Non-life			Life		Corporate
	America			P&C			Specialty			Catastrophe			Segment			Segment		and Other		Total
Gross premiums written	$	207		$	189		$	371		$	206		$	973		$	167	$	—	$	1,140
Net premiums written	$	207		$	186		$	355		$	191		$	939		$	167	$	7	$	1,113
Decrease (increase) in unearned premiums		16			45			21			(90)			(8)			6		(6)		(8)
Net premiums earned	$	223		$	231		$	376		$	101		$	931		$	173	$	1	$	1,105
Losses and loss expenses and
life policy benefits		(116)			(141)			(292)			13			(536)			(169)		—		(705)
Acquisition costs		(69)			(61)			(82)			(7)			(219)			(25)		—		(244)
Technical result	$	38		$	29		$	2		$	107		$	176		$	(21)	$	1	$	156
Other income (loss)														1			1		(1)		1
Other operating expenses														(82)			(13)		(65)		(160)
Underwriting result													$	95		$	(33)		n/a	$	(3)
Net investment income																	20		154		174
Allocated underwriting result																$	(13)		n/a		n/a
Net realized and unrealized investment gains																			46		46
Interest expense																			(13)		(13)
Amortization of intangible assets																			(8)		(8)
Net foreign exchange gains																			11		11
Income tax expense																			(17)		(17)
Interest in earnings of equity investments																			1		1
Net income																			n/a	$	191
Loss ratio		52.2	%		61.1	%		77.6	%		(12.8)	%		57.6	%
Acquisition ratio		30.7			26.4			21.9			6.3			23.4
Technical ratio		82.9	%		87.5	%		99.5	%		(6.5)	%		81.0	%
Other operating expense ratio														8.8
Combined ratio														89.8	%

Segment Information
For the six months ended June 30, 2011
				Global			Global						Total
	North			(Non-U.S.)			(Non-U.S.)						Non-life			Life		Corporate
	America			P&C			Specialty			Catastrophe			Segment			Segment		and Other		Total
Gross premiums written	$	581		$	440		$	724		$	486		$	2,231		$	403	$	6	$	2,640
Net premiums written	$	581		$	437		$	648		$	453		$	2,119		$	402	$	6	$	2,527
(Increase) decrease in unearned premiums		(60)			(63)			10			(220)			(333)			(17)		(5)		(355)
Net premiums earned	$	521		$	374		$	658		$	233		$	1,786		$	385	$	1	$	2,172
Losses and loss expenses and
life policy benefits		(365)			(277)			(427)			(1,040)			(2,109)			(311)		(2)		(2,422)
Acquisition costs		(129)			(93)			(158)			(1)			(381)			(56)		—		(437)
Technical result	$	27		$	4		$	73		$	(808)		$	(704)		$	18	$	(1)	$	(687)
Other income														2			—		1		3
Other operating expenses														(137)			(25)		(56)		(218)
Underwriting result													$	(839)		$	(7)		n/a	$	(902)
Net investment income																	31		279		310
Allocated underwriting result																$	24		n/a		n/a
Net realized and unrealized investment losses																			(34)		(34)
Interest expense																			(24)		(24)
Amortization of intangible assets																			(18)		(18)
Net foreign exchange gains																			9		9
Income tax expense																			(24)		(24)
Interest in losses of equity investments																			—		—
Net loss																			n/a	$	(683)
Loss ratio		70.0	%		74.0	%		64.9	%		446.3	%		118.0	%
Acquisition ratio		24.8			25.0			24.0			0.3			21.4
Technical ratio		94.8	%		99.0	%		88.9	%		446.6	%		139.4	%
Other operating expense ratio														7.7
Combined ratio														147.1	%

Segment Information
For the six months ended June 30, 2010
				Global			Global						Total
	North			(Non-U.S.)			(Non-U.S.)						Non-life			Life		Corporate
	America			P&C			Specialty			Catastrophe			Segment			Segment		and Other		Total
Gross premiums written	$	564		$	633		$	880		$	615		$	2,692		$	354	$	3	$	3,049
Net premiums written	$	564		$	621		$	811		$	550		$	2,546		$	349	$	2	$	2,897
Increase in unearned premiums		(73)			(160)			(98)			(295)			(626)			(12)		(1)		(639)
Net premiums earned	$	491		$	461		$	713		$	255		$	1,920		$	337	$	1	$	2,258
Losses and loss expenses and
life policy benefits		(296)			(387)			(595)			(140)			(1,418)			(299)		—		(1,717)
Acquisition costs		(137)			(114)			(146)			(18)			(415)			(49)		—		(464)
Technical result	$	58		$	(40)		$	(28)		$	97		$	87		$	(11)	$	1	$	77
Other income (loss)														2			1		(1)		2
Other operating expenses														(160)			(27)		(101)		(288)
Underwriting result													$	(71)		$	(37)		n/a	$	(209)
Net investment income																	37		311		348
Allocated underwriting result																$	—		n/a		n/a
Net realized and unrealized investment gains																			191		191
Interest expense																			(20)		(20)
Amortization of intangible assets																			(13)		(13)
Net foreign exchange gains																			15		15
Income tax expense																			(45)		(45)
Interest in earnings of equity investments																			4		4
Net income																			n/a	$	271
Loss ratio		60.2	%		84.0	%		83.4	%		54.6	%		73.9	%
Acquisition ratio		28.0			24.6			20.5			7.3			21.6
Technical ratio		88.2	%		108.6	%		103.9	%		61.9	%		95.5	%
Other operating expense ratio														8.3
Combined ratio														103.8	%

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Net Income (Loss) Per Share

6 Months Ended

Jun. 30, 2011

Disclosure - Net Income (Loss) Per Share [Abstract]

Net Income (Loss) Per Share

7. Net Income(Loss)per Share

The reconciliation of basic and diluted net income (loss) per share for the three months and six months ended June 30, 2011 and 2010 is as follows (in thousands of U.S. dollars or shares, except per share amounts):

			For the three		For the three		For the six		For the six
			months ended		months ended		months ended		months ended
			June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Numerator:
	Net income (loss)		$	124,185	$	190,927	$	(682,771)	$	270,581
	Less: preferred dividends			(8,631)		(8,631)		(17,263)		(17,263)
	Net income (loss) available to common shareholders		$	115,554	$	182,296	$	(700,034)	$	253,318
Denominator:
	Weighted number of common shares outstanding - basic			67,628.1		77,365.4		67,811.4		79,519.2
	Share options and other (1)			814.2		1,431.0		—		1,531.5
	Weighted average number of common shares and
		common share equivalents outstanding - diluted		68,442.3		78,796.4		67,811.4		81,050.7
Basic net income (loss) per share			$	1.71	$	2.36	$	(10.32)	$	3.19
Diluted net income (loss) per share(1)			$	1.69	$	2.31	$	(10.32)	$	3.13

(1)       Dilutive securities, in the form of share options and other, that could potentially dilute basic net loss per share were not included in the computation of diluted net loss per share because to do so would have been anti-dilutive for the six months ended June 30, 2011. The weighted average number of common and common share equivalents outstanding would have amounted to 68,769.9 thousand shares if these securities had been included for the six months ended June 30, 2011. In addition, atJune 30, 2011and2010, share based awards to purchase 1,253.6 and 840.4 thousand common shares, respectively, were excluded from the calculation of diluted weighted average number of common sharesand common share equivalents outstanding because their exercise prices were greater than the average market price of the common shares.

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Unaudited Condensed Consolidated Statements of Cash Flows (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Cash flows from operating activities
Net (loss) income	$ (682,771)	$ 270,581
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Amortization of net premium on investments	37,494	37,518
Amortization of intangible assets	17,992	12,636
Net realized and unrealized investment gains (losses)	34,000	(191,519)
Changes in:
Reinsurance balances, net	(361,501)	(443,469)
Reinsurance recoverable on paid and unpaid losses, net of ceded premiums payable	11,481	7,542
Funds held by reinsured companies and funds held - directly managed	552,361	189,635
Deferred acquisition costs	(31,484)	(80,901)
Net tax assets and liabilities	(32,493)	(66,175)
Unpaid losses and loss expenses including life policy benefits	853,057	194,878
Unearned premiums	354,853	638,489
Other net changes in operating assets and liabilities	(10,651)	(8,671)
Net cash provided by operating activities	742,338	560,544
Redemptions of fixed maturities	801,285	561,593
Sales and redemptions of short-term investments	76,061	94,045
Purchases of short-term investments	(240,207)	(69,056)
Other, net	(17,820)	(138,272)
Net cash (used in) provided by investing activities	(1,307,078)	33,090
Cash flows from financing activities
Cash dividends paid to shareholders	(95,009)	(96,608)
Net proceeds from issuance of preferred shares	361,722	0
Repurchase of common shares	(244,222)	(600,086)
Issuance of common shares	13,125	15,013
Proceeds from issuance of senior notes	0	500,000
Contract fees on forward sale agreement	0	(2,638)
Net cash provided by (used in) financing activities	35,616	(184,319)
Effect of foreign exchange rate changes on cash	24,882	(62,299)
(Decrease) increase in cash and cash equivalents	(504,242)	347,016
Cash and cash equivalents - beginning of period	2,111,084	738,309
Cash and cash equivalents - end of period	1,606,842	1,085,325
Supplemental cash flow information:
Taxes paid	103,965	109,841
Interest paid	24,630	17,866
Fixed maturities [Member]
Changes in:
Sales	2,713,137	4,003,008
Purchases	4,766,381	4,248,444
Equity securities [Member]
Changes in:
Sales	457,170	171,643
Purchases	$ 330,323	$ 341,427

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New Accounting Pronouncements

6 Months Ended

Jun. 30, 2011

New Accounting Pronouncements

New Accounting Pronouncements [Text Block]

3. New Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (FASB) issued new accounting guidance, which updates the existing guidance, related to fair value measurement and disclosures.The amendments clarify or change the application of certain existing requirements and also require some additional disclosures. The guidance is effective for interim and annual periods beginning after December 15, 2011. The Company is currentlyevaluating the impact of the adoption of this guidance on its disclosures.

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Fair Value

6 Months Ended

Jun. 30, 2011

Fair Value

Fair Value Disclosures [Text Block]

4. Fair Value

(a) Fair Value of Financial Instrument Assets

The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value by maximizing the use of observable inputs and minimizing the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about what market participants would use in pricing the asset or liability based on the best information available in the circumstances. The level in the hierarchy within which a given fair value measurement falls is determined based on the lowest level input that is significant to the measurement.

The Company determines the appropriate level in the hierarchy for each financial instrument that it measures at fair value. In determining fair value, the Company uses various valuation approaches, including market, income and cost approaches. The hierarchy is broken down into three levels based on the observability of inputs as follows:

•       Level 1 inputs—Unadjusted, quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

The Company's financial instruments that it measures at fair value using Level 1 inputs generally include: equities listed on a major exchange, exchange traded funds and exchange traded derivatives, such as futures and certain weather derivatives that are actively traded.

•       Level 2 inputs—Quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets and directly or indirectly observable inputs, other than quoted prices, used in industry accepted models.

The Company's financial instruments that it measures at fair value using Level 2 inputs generally include: U.S. Treasury bonds; U.S. Government Sponsored Entities bonds; Organization for Economic Co-operation and Development Sovereign Treasury bonds; investment grade and high yield corporate bonds; catastrophe bonds; mortality bonds; mortgage-backed securities; asset-backed securities; certain fixed income mutual funds; foreign exchange forward contracts and over-the-counter derivatives such as foreign currency option contracts, equity put and call options, credit default swaps, non-exchange traded futures and interest rate swaps.

•       Level 3 inputs—Unobservable inputs.

The Company's financial instruments that it measures at fair value using Level 3 inputs generally include: unlisted equities; inactively traded fixed maturities including bonds issued by U.S. domiciled state and municipal entities, privately issued corporate securities and special purpose financing asset-backed bonds; real estate mutual fund investments; inactively traded weather derivatives; notes receivable and total return swaps.

The Company's financial instruments measured at fair value include investments classified as trading securities, certain other invested assets and the segregated investment portfolio underlying the funds held – directly managed account. At June 30, 2011 and December 31, 2010, the Company's financial instruments measured at fair value were categorized between Levels 1, 2 and 3 as follows (in thousands of U.S. dollars):

			Quoted prices in				Significant
			active markets for		Significant other		unobservable
			identical assets		observable inputs		inputs
June 30, 2011			(Level 1)		(Level 2)		(Level 3)		Total
Fixed maturities
	U.S. government and agencies		$	—	$	1,486,790	$	86,782	$	1,573,572
	Non-U.S. sovereign government,
		supranational and government related		—		3,258,355		—		3,258,355
	Corporate			—		5,713,985		116,428		5,830,413
	Asset-backed securities			—		394,046		261,843		655,889
	Residential mortgage-backed securities			—		2,999,005		—		2,999,005
	Other mortgage-backed securities			—		89,710		1		89,711
Fixed maturities			$	—	$	13,941,891	$	465,054	$	14,406,945
Short-term investments			$	—	$	212,769	$	2,923	$	215,692
Equities
	Consumer noncyclical		$	138,638	$	178	$	—	$	138,816
	Energy			96,782		1,051		—		97,833
	Finance			89,054		617		163		89,834
	Technology			78,939		—		—		78,939
	Communications			76,188		33		—		76,221
	Industrials			71,405		—		—		71,405
	Consumer cyclical			57,087		86		—		57,173
	Insurance			38,447		—		—		38,447
	Other			70,343		408		—		70,751
	Mutual funds and exchange traded funds			58,736		210,216		6,542		275,494
Equities			$	775,619	$	212,589	$	6,705	$	994,913
Other invested assets
	Derivative assets
		Foreign exchange forward contracts	$	—	$	11,634	$	—	$	11,634
		Foreign currency option contracts		—		2,921		—		2,921
		Futures contracts		6,179		219		—		6,398
		Credit default swaps (protection purchased)		—		4		—		4
		Credit default swaps (assumed risks)		—		906		—		906
		Insurance-linked securities		23		—		251		274
		Total return swaps		—		379		4,306		4,685
		Interest rate swaps		—		52		—		52
	Other assets			—		—		74,018		74,018
	Derivative liabilities
		Foreign exchange forward contracts		—		(4,512)		—		(4,512)
		Foreign currency option contracts		—		(470)		—		(470)
		Futures contracts		(19,126)		(487)		—		(19,613)
		Credit default swaps (protection purchased)		—		(2,162)		—		(2,162)
		Insurance-linked securities		(493)		—		(14,633)		(15,126)
		Total return swaps		—		—		(11,459)		(11,459)
		Interest rate swaps		—		(5,203)		—		(5,203)
	Other liabilities			—		(1,570)		—		(1,570)
Other invested assets			$	(13,417)	$	1,711	$	52,483	$	40,777
Funds held – directly managed
	U.S. government and agencies		$	—	$	230,481	$	355	$	230,836
	Non-U.S. sovereign government,
		supranational and government related		—		313,284		—		313,284
	Corporate			—		550,644		—		550,644
	Short-term investments			—		42,330		—		42,330
	Other invested assets			—		—		21,720		21,720
Funds held – directly managed			$	—	$	1,136,739	$	22,075	$	1,158,814
Total			$	762,202	$	15,505,699	$	549,240	$	16,817,141
			Quoted prices in				Significant
			active markets for		Significant other		unobservable
			identical assets		observable inputs		inputs
December 31, 2010			(Level 1)		(Level 2)		(Level 3)		Total
Fixed maturities
	U.S. government and agencies		$	—	$	917,600	$	55,124	$	972,724
	Non-U.S. sovereign government,
		supranational and government related		—		2,819,193		—		2,819,193
	Corporate			—		6,066,865		76,982		6,143,847
	Asset-backed securities			—		343,518		213,139		556,657
	Residential mortgage-backed securities			—		2,305,525		—		2,305,525
	Other mortgage-backed securities			—		26,153		290		26,443
Fixed maturities			$	—	$	12,478,854	$	345,535	$	12,824,389
Short-term investments			$	—	$	49,397	$	—	$	49,397
Equities
	Consumer noncyclical		$	186,016	$	—	$	—	$	186,016
	Technology			119,214		—		—		119,214
	Energy			118,372		—		—		118,372
	Finance			112,309		—		2,486		114,795
	Communications			110,982		—		—		110,982
	Industrials			100,572		—		—		100,572
	Consumer cyclical			81,595		—		—		81,595
	Insurance			48,611		—		—		48,611
	Other			90,220		—		—		90,220
	Mutual funds and exchange traded funds			60,372		—		40,927		101,299
Equities			$	1,028,263	$	—	$	43,413	$	1,071,676
Other invested assets
	Derivative assets
		Foreign exchange forward contracts	$	—	$	27,880	$	—	$	27,880
		Foreign currency option contracts		—		3,516		—		3,516
		Futures contracts		30,593		—		—		30,593
		Credit default swaps (protection purchased)		—		93		—		93
		Credit default swaps (assumed risks)		—		533		—		533
		Insurance-linked securities		1,320		—		—		1,320
		Total return swaps		—		449		5,592		6,041
		Interest rate swaps		—		246		—		246
	Other assets			—		—		86,278		86,278
	Derivative liabilities
		Foreign exchange forward contracts		—		(13,647)		—		(13,647)
		Futures contracts		(7,956)		—		—		(7,956)
		Credit default swaps (protection purchased)		—		(2,407)		—		(2,407)
		Credit default swaps (assumed risks)		—		(401)		—		(401)
		Insurance-linked securities		(695)		—		(698)		(1,393)
		Total return swaps		—		—		(12,848)		(12,848)
		Interest rate swaps		—		(6,033)		—		(6,033)
	Other liabilities			—		(441)		—		(441)
Other invested assets			$	23,262	$	9,788	$	78,324	$	111,374
Funds held – directly managed
	U.S. government and agencies		$	—	$	288,164	$	368	$	288,532
	Non-U.S. sovereign government,
		supranational and government related		—		384,553		—		384,553
	Corporate			—		798,587		—		798,587
	Mortgage/asset-backed securities			—		—		12,118		12,118
	Short-term investments			—		38,613		—		38,613
	Other invested assets			—		—		20,528		20,528
Funds held – directly managed			$	—	$	1,509,917	$	33,014	$	1,542,931
Total			$	1,051,525	$	14,047,956	$	500,286	$	15,599,767

At June 30, 2011 and December 31, 2010, the aggregate carrying amounts of items included in Other invested assets that the Company did not measure at fair value were $297.6 million and $241.0 million, respectively, which related to the Company's investments that are accounted for using the cost method of accounting, equity method of accounting or investment company accounting.

In addition to the investments underlying the funds held – directly managed account held at fair value of $1,158.8 million and $1,542.9 million at June 30, 2011 and December 31, 2010, respectively, the funds held – directly managed account also included cash and cash equivalents, carried at fair value, of $149.3million and $129.2 million, respectively, and accrued investment income of $14.9 million and $19.9 million, respectively. At June 30, 2011 and December 31, 2010, the aggregate carrying amounts of items included in the funds held – directly managed account that the Company did not measure at fair value were $56.5million and $80.1 million, respectively, which primarily related to other assets and liabilities held by Colisée Re related to the underlying business, which are carried at cost (see Note 5 to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010).

At June 30, 2011 and December 31, 2010, substantially all of the accrued investment income in the Unaudited Condensed Consolidated Balance Sheets related to the Company's investments and the investments underlying the funds held – directly managed account for which the fair value option was elected.

During the three months and six months ended June 30, 2011, there were no significant transfers between Levels 1 and 2.

Disclosuresabout the fair value of financial instrumentsthat the Company does not measure at fair value exclude insurance contracts and certain other financial instruments. At June 30, 2011 and December 31, 2010, the fair values of financial instrumentassets recorded in the Unaudited Condensed Consolidated Balance Sheets not described above, approximate their carrying values.

The following tables are reconciliations of the beginning and ending balances for all financial instruments measured at fair value using Level 3 inputs for the three months ended June 30, 2011 and 2010 (in thousands of U.S. dollars):

															Change in
						Realized and										unrealized
						unrealized										investment
						investment						Net				gains (losses)
				Balance at		gains (losses)						transfers		Balance		relating to
For the three months ended			beginning		included in						(out of)/into		at end		assets held at
June 30, 2011			of period		net income		Purchases		Sales		Level 3(a)		of period		end of period
Fixed maturities
	U.S. government and agencies		$	55,929	$	819	$	30,064	$	(30)	$	—	$	86,782	$	819
	Corporate			115,107		2,049		84		(812)		—		116,428		2,049
	Asset-backed securities			262,408		7,707		47,130		(55,402)		—		261,843		(2,660)
	Residential mortgage-backed
		securities		4,301		846		—		(5,147)		—		—		—
	Other mortgage-backed securities			576		(191)		—		(384)		—		1		(166)
Fixed maturities			$	438,321	$	11,230	$	77,278	$	(61,775)	$	—	$	465,054	$	42
Short-term investments			$	1,204	$	(730)	$	2,449	$	—	$	—	$	2,923	$	(730)
Equities
	Finance		$	161	$	2	$	—	$	—	$	—	$	163	$	2
	Mutual funds and exchange
		traded funds		41,451		594		—		(35,503)		—		6,542		(804)
Equities			$	41,612	$	596	$	—	$	(35,503)	$	—	$	6,705	$	(802)
Other invested assets
	Derivatives, net		$	(17,042)	$	322	$	(4,815)	$	—	$	—	$	(21,535)	$	234
	Other			84,662		(1,303)		3,568		(12,909)		—		74,018		(1,016)
Other invested assets			$	67,620	$	(981)	$	(1,247)	$	(12,909)	$	—	$	52,483	$	(782)
Funds held – directly managed
	U.S. government and agencies		$	366	$	(11)	$	—	$	—	$	—	$	355	$	(11)
	Other invested assets			22,456		(736)		—		—		—		21,720		(736)
Funds held – directly managed			$	22,822	$	(747)	$	—	$	—	$	—	$	22,075	$	(747)
Total			$	571,579	$	9,368	$	78,480	$	(110,187)	$	—	$	549,240	$	(3,019)
____________
(a) The Company’s policy is to recognize the transfers between the hierarchy levels at the beginning of the period.

				Realized and								Change in
					unrealized								unrealized
					investment		Net		Net				investment gains
			Balance at		gains (losses)		purchases,		transfers		Balance		(losses) relating
For the three months ended		beginning		included in		sales and		(out of)/into		at end of		to assets held
June 30, 2010		of period		net income		settlements		Level 3 (a)		period		at end of period
Fixed maturities
	U.S. government and agencies	$	9,720	$	272	$	7	$	—	$	9,999	$	272
	Corporate		10,057		300		5,080		—		15,437		300
	Asset-backed securities		84,984		7,359		133,615		—		225,958		7,359
	Residential mortgage-backed securities		95,029		—		(95,029)		—		—		—
	Other mortgage-backed securities		811		123		(80)		—		854		123
Fixed maturities		$	200,601	$	8,054	$	43,593	$	—	$	252,248	$	8,054
Equities
	Finance	$	2,459	$	(1,039)	$	695	$	—	$	2,115	$	(1,039)
	Mutual funds and exchange traded funds		35,670		(1,058)		5,000		—		39,612		(1,058)
Equities		$	38,129	$	(2,097)	$	5,695	$	—	$	41,727	$	(2,097)
Other invested assets
	Derivatives, net	$	(7,998)	$	1,772	$	(8,353)	$	—	$	(14,579)	$	1,772
	Other		25,918		(253)		24,624		—		50,289		(253)
Other invested assets		$	17,920	$	1,519	$	16,271	$	—	$	35,710	$	1,519
Funds held – directly managed
	U.S. government and agencies	$	204	$	153	$	—	$	—	$	357	$	153
	Mortgage/asset-backed securities		13,260		(683)		—		—		12,577		(683)
	Other invested assets		30,348		(3,523)		—		—		26,825		(3,523)
Funds held – directly managed		$	43,812	$	(4,053)	$	—	$	—	$	39,759	$	(4,053)
Total		$	300,462	$	3,423	$	65,559	$	—	$	369,444	$	3,423

During the three months ended June 30, 2011 and 2010, there were no transfers into or out ofLevel 3.

The following tables are reconciliations of the beginning and ending balances for all financial instruments measured at fair value using Level 3 inputs for the six months ended June 30, 2011 and 2010 (in thousands of U.S. dollars):

															Change in
						Realized and										unrealized
						unrealized										investment
						investment						Net				gains (losses)
				Balance at		gains (losses)						transfers		Balance		relating to
For the six months ended			beginning		included in						into		at end		assets held at
June 30, 2011			of period		net loss		Purchases		Sales		Level 3(a)		of period		end of period
Fixed maturities
	U.S. government and agencies		$	55,124	$	1,624	$	30,064	$	(30)	$	—	$	86,782	$	1,624
	Corporate			76,982		(37,066)		40,878		(4,546)		40,180		116,428		2,368
	Asset-backed securities			213,139		10,678		101,644		(63,618)		—		261,843		4,257
	Residential mortgage-backed
		securities		—		1,385		4,212		(5,597)		—		—		—
	Other mortgage-backed securities			290		(224)		408		(473)		—		1		(203)
Fixed maturities			$	345,535	$	(23,603)	$	177,206	$	(74,264)	$	40,180	$	465,054	$	8,046
Short-term investments			$	—	$	(1,069)	$	3,992	$	—	$	—	$	2,923	$	(1,069)
Equities
	Finance		$	2,486	$	239	$	—	$	(2,562)	$	—	$	163	$	13
	Mutual funds and exchange
		traded funds		40,927		1,242		—		(35,627)		—		6,542		(382)
Equities			$	43,413	$	1,481	$	—	$	(38,189)	$	—	$	6,705	$	(369)
Other invested assets
	Derivatives, net		$	(7,954)	$	(8,803)	$	(4,778)	$	—	$	—	$	(21,535)	$	(8,893)
	Other			86,278		(3,207)		6,548		(15,601)		—		74,018		(2,497)
Other invested assets			$	78,324	$	(12,010)	$	1,770	$	(15,601)	$	—	$	52,483	$	(11,390)
Funds held – directly managed
	U.S. government and agencies		$	368	$	(13)	$	—	$	—	$	—	$	355	$	(13)
	Mortgage/asset-backed securities			12,118		(150)		—		(11,968)		—		—		—
	Other invested assets			20,528		1,192		—		—		—		21,720		1,192
Funds held – directly managed			$	33,014	$	1,029	$	—	$	(11,968)	$	—	$	22,075	$	1,179
Total			$	500,286	$	(34,172)	$	182,968	$	(140,022)	$	40,180	$	549,240	$	(3,603)

					Realized and								Change in
						unrealized								unrealized
						investment		Net		Net				investment gains
				Balance at		gains (losses)		purchases,		transfers		Balance		(losses) relating
For the six months ended			beginning		included in		sales and		(out of)/into		at end of		to assets held
June 30, 2010			of period		net income		settlements		Level 3 (a)		period		at end of period
Fixed maturities
	U.S. government and agencies		$	4,286	$	272	$	9,727	$	(4,286)	$	9,999	$	272
	Corporate			15,041		423		10,900		(10,927)		15,437		423
	Asset-backed securities			99,952		4,601		124,305		(2,900)		225,958		4,576
	Residential mortgage-backed securities			77,440		191		(77,631)		—		—		—
	Other mortgage-backed securities			874		153		(173)		—		854		153
Fixed maturities			$	197,593	$	5,640	$	67,128	$	(18,113)	$	252,248	$	5,424
Equities
	Finance		$	2,488	$	(1,068)	$	695	$	—	$	2,115	$	(1,068)
	Industrials			805		(84)		(721)		—		—		—
	Mutual funds and exchange traded funds			34,810		(198)		5,000		—		39,612		(198)
Equities			$	38,103	$	(1,350)	$	4,974	$	—	$	41,727	$	(1,266)
Other invested assets
	Derivatives, net		$	(9,361)	$	4,315	$	(17,699)	$	8,166	$	(14,579)	$	2,490
	Other			25,815		(169)		24,643		—		50,289		(169)
Other invested assets			$	16,454	$	4,146	$	6,944	$	8,166	$	35,710	$	2,321
Funds held – directly managed
	U.S. government and agencies		$	375	$	(18)	$	—	$	—	$	357	$	(18)
	Non-U.S. sovereign government,
		supranational and government related		3,417		(13)		(3,404)		—		—		—
	Mortgage/asset-backed securities			142		(4,431)		—		16,866		12,577		(4,426)
	Other invested assets			35,685		(8,860)		—		—		26,825		(8,860)
Funds held – directly managed			$	39,619	$	(13,322)	$	(3,404)	$	16,866	$	39,759	$	(13,304)
Total			$	291,769	$	(4,886)	$	75,642	$	6,919	$	369,444	$	(6,825)

During the six months ended June 30, 2011, a catastrophe bond (included within corporate fixed maturities) with a fair value of $40.2 million was transferred from Level 2 into Level 3. The transfer into Level 3 was due to the lack of observable market inputs at March 31, 2011, leading the Company to apply inputs that were not directly observable. The catastrophe bond matured during the three months ended June 30, 2011.

During the six months ended June 30, 2010, certain fixed maturities with a fair value of $18.1 million were transferred from Level 3 into Level 2. The reclassifications to Level 2 consisted of municipal (included within U.S. government and agencies), corporate and student loans (included within asset-backed securities) fixed maturities. The transfers into Level 2 were due to the availability of quoted prices for similar assets in active markets used for valuation as of June 30, 2010, resulting from the continued recovery of the financial markets. In addition, during the six months ended June 30, 2010, certain derivatives with a fair value in a net liability position of $8.2 million were transferred out of Level 3 into Level 2 due to the availability of observable inputs.

During the six months ended June 30, 2010, certain fixed maturities within the investments underlying the funds held – directly managed account with a fair value of $16.9 million were transferred from Level 2 into Level 3. The reclassification into Level 3 consisted of asset-backed securities and residential and commercial mortgage-backed securities. The transfers into Level 3 were the result of the lack of observable market inputs, leading the Company to apply inputs that were not directly observable.

Changes in the fair value of the Company's financial instruments subject to the fair value option during the three months and six months ended June 30, 2011 and 2010,respectively, were as follows (in thousands of U.S. dollars):

	For the three		For the three		For the six		For the six
	months ended		months ended		months ended		months ended
	June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Fixed maturities	$	130,907	$	165,665	$	(9,321)	$	264,762
Short-term investments		194		7		(446)		(2,418)
Equities		(30,197)		(126,610)		(14,079)		(101,198)
Other invested assets		(3,689)		(226)		(3,333)		(142)
Funds held – directly managed		10,756		19,988		(1,494)		31,167
Total	$	107,971	$	58,824	$	(28,673)	$	192,171

All of the above changes in fair value are included in the Unaudited Condensed Consolidated Statements of Operations under the caption Net realized and unrealized investment gains (losses).

The following methods and assumptions were used by the Company in estimating the fair value of each class of financial instrument recorded in the Unaudited Condensed Consolidated Balance Sheets. There have been no material changes in the Company's valuation techniques during the periods presented.

Fixed maturities and short-term investments

•       U.S. government and agencies —U.S. government and agencies securities consist primarily of bonds issued by the U.S. Treasury, corporate debt securities issued by the Federal National Mortgage Association, the Federal Home Loan Bank and other U.S. agencies as well as bonds issued by U.S. domiciled state and municipal entities. These securities are generally priced by independent pricing services. The independent pricing services may use actual transaction prices for securities that have been actively traded. For securities that have not been actively traded, each pricing source has its own proprietary method to determine the fair value, which may incorporate option adjusted spreads (OAS), interest rate data and market news. The Company generally classifies thesesecurities in Level 2.Certain of the U.S. domiciled states and municipal investments issued by municipal housing authorities are not actively traded and are priced based on internal models using unobservable inputs. Accordingly, the Company classifies these securities in Level3.

•       Non-U.S. sovereign government, supranational and government related— Non-U.S. sovereign government, supranational and government related securities consist primarily of bonds issued by non-U.S. national governments and their agencies, non-U.S. regional governments and supranational organizations. These securities are generally priced by independent pricing services using the techniques described for U.S. government and agencies above. The Company generally classifies these securities in Level 2.

•       Corporate— Corporate securities consist primarily of U.S. and foreign corporations covering a variety of industries. These securities are generally priced by independent pricing services and brokers. The pricing provider incorporates information including credit spreads, interest rate data and market news into the valuation of each security. The Company generally classifies these securities in Level 2. When a corporate security is inactively traded or the valuation model uses unobservable inputs, the Company classifies the security in Level 3.

•       Asset-backed securities— Asset-backed securities primarily consist of student loans, automobile loans, credit card receivables, equipment leases, and special purpose financing. With the exception of special purpose financing, these asset-backed securities are generally priced by independent pricing services and brokers. The pricing provider applies dealer quotes and other available trade information, prepayment speeds, yield curves and credit spreads to the valuation. The Company generally classifies these securities in Level 2. Special purpose financing securities are generally inactively traded and are priced based on valuation models using unobservable inputs, including cash flow assumptions and credit spreads. The Company generally classifies these securities in Level 3.

•       Residential mortgage-backed securities — Residential mortgage-backed securities primarily consist of bonds issued by the Government National Mortgage Association, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, as well as private, non-agency issuers. With the exception of private, non-agency issuers, these residential mortgage-backed securities are generally priced by independent pricing services and brokers. When current market trades are not available, the pricing provider will employ proprietary models with observable inputs including other trade information, prepayment speeds, yield curves and credit spreads. The Company generally classifies these securities in Level 2. Bonds issued by private, non-agency issuers are generally inactively traded and are priced based on valuation models using unobservable inputs, including cash flow assumptions and credit spreads. The Company generally classifies these securities in Level 3.

•       Other mortgage-backed securities— Other mortgage-backed securities primarily consist of commercial mortgage-backed securities. These securities are generally priced by independent pricing services and brokers. The pricing provider applies dealer quotes and other available trade information, prepayment speeds, yield curves and credit spreads to the valuation. The Company generally classifies these securities in Level 2. When a commercial mortgage-backed security is inactively traded or the valuation model uses unobservable inputs, the Company classifies the security in Level 3.

In general, the methods employed by the independent pricing services to determine the fair value of the securities that have not actively traded involve the use of “matrix pricing” in which the independent pricing source applies the credit spread for a comparable security that has traded recently to the current yield curve to determine a reasonable fair value. The Company uses a pricing service ranking to consistently select the most appropriate pricing service in instances where it receives multiple quotes on the same security. When fair values are unavailable from these independent pricing sources, quotes are obtained directly from broker-dealers who are active in the corresponding markets. Most of the Company's fixed maturities are priced from the pricing services or dealer quotes. The Company will typically not make adjustments to prices received from pricing services or dealer quotes; however, in instances where the quoted external price for a security uses significant unobservable inputs, the Company will categorize that security as Level 3. The Company's inactively traded fixed maturities are classified as Level 3. For all fixed maturity investments, the bid price is used for estimating fair value.

To validate prices, the Company compares the fair value estimates to its knowledge of the current market and will investigate prices that it considers not to be representative of fair value. The Company also reviews an internally generated fixed maturity price validation report which converts prices received for fixed maturity investments from the independent pricing sources and from broker-dealers quotes and plots OAS and duration on a sector and rating basis. The OAS is calculated using established algorithms developed by an independent risk analytics platform vendor. The OAS on the fixed maturity price validation report are compared for securities in a similar sector and having a similar rating, and outliers are identified and investigated for price reasonableness. In addition, the Company completes quantitative analyses to compare the performance of each fixed maturity investment portfolio to the performance of an appropriate benchmark, with significant differences identified and investigated.

Short term investments

Short term investments are valued in a manner similar to the Company's fixed maturity investments and are generally classified in Level 2.Special purpose financing securities purchased with less than 12 months to maturity are generally inactively traded and are priced based on valuation models using unobservable inputs, including cash flow assumptions and credit spreads. The Company generally classifies these securities in Level 3.

Equities

Equity securities include U.S. and foreign common and preferred stocks, exchange traded funds and mutual funds. Equities and exchange traded funds are generally classified in Level 1 as the Company uses prices received from independent pricing sources based on quoted prices in active markets. Equities categorized as Level 2 are generally mutual funds invested in fixed income securities, where the net asset value of the fund is provided on a daily basis and common stocks traded in inactive markets. Equities categorized as Level 3 are generally mutual funds invested in securities other than the common stock of publicly traded companies, where the net asset value is not provided on a daily basis.

To validate prices, the Company completes quantitative analyses to compare the performance of each equity investment portfolio to the performance of an appropriate benchmark, with significant differences identified and investigated.

Other invested assets

The Company's exchange traded derivatives, such as futures and certain weather derivatives, are generally categorized as Level1 as their fair values are quoted prices in active markets. The Company's foreign exchange forward contracts, foreign currency option contracts, equity put and call options, interest rate swaps, non-exchange traded futures and credit default swaps are generally categorized as Level 2 within the fair value hierarchy and are priced by independent pricing services.

Included in the Company's Level 3 categorization, in general, are unlisted equities, credit linked notes, certain inactively traded weather derivatives, notes and loans receivable and total return swaps. For Level 3 instruments, the Company will generally either (i) receive a price based on a manager's or trustee's valuation for the asset; or (ii) develop an internal discounted cash flow model to measure fair value. Where the Company receives prices from the manager or trustee, these prices are based on the manager's or trustee's estimate of fair value for the assets and are generally audited on an annual basis. Where the Company develops its own discounted cash flow models, the inputs will be specific to the asset in question, based on appropriate historical information, adjusted as necessary, and using appropriate discount rates. As part of the Company's modeling to determine the fair value of an investment, the Company considers counterparty credit risk as an input to the model, however, the majority of the Company's counterparties are highly rated institutions and the failure of any one counterparty would not have a significant impact on the Company's financial statements.

To validate prices, the Company will compare them to benchmarks, where appropriate, or to the business results generally within that asset class and specifically to those particular assets. In addition, the fair value measurements of all Level 3 investments are presented to, and peer reviewed by, an internal valuation committee that the Company has established.

Funds held – directly managed

The segregated investment portfolio underlying the funds held – directly managed account is comprised of fixed maturities, short-term investments and other invested assets which are fair valued on a basis consistent with the methods described above. Substantially all fixed maturities and short-term investments within the funds held – directly managed account are categorized as Level 2 within the fair value hierarchy.

The other invested assets within the segregated investment portfolio underlying the funds held – directly managed account, which are categorized as Level 3 investments, are primarily real estate mutual fund investments carried at fair value. For the real estate mutual fund investments, the Company receives a price based on the real estate fund manager's valuation for the asset and further adjusts the price, if necessary, based on appropriate current information on the real estate market.

To validate prices within the segregated investment portfolio underlying the funds held – directly managed account, the Company utilizes the methods described above.

(b) Fair Value of Financial Instrument Liabilities

Disclosures about the fair value of financial instrument liabilities exclude insurance contracts and certain other financial instruments. At June 30, 2011 and December 31, 2010, the fair values of financial instrument liabilities recorded in the Unaudited Condensed Consolidated Balance Sheets approximate their carrying values, with the exception of the debt related to senior notes (Senior Notes) and the debt related to capital efficient notes (CENts). The methods and assumptions used by the Company in estimating the fair value of the Senior Notes and CENtsdid not change from December 31, 2010.

The carrying values and fair values of the Senior Notes and CENts as of June 30, 2011 and December 31, 2010 were as follows (in thousands of U.S. dollars):

	June 30, 2011				December 31, 2010
	Carrying Value		Fair Value		Carrying Value		Fair Value
Debt related to senior notes(1)		750,000		793,773		750,000		781,950
Debt related to capital efficient notes (2)		63,384		61,133		63,384		59,261

(1)       PartnerRe Finance A LLC and PartnerRe Finance B LLC, the issuers of the Senior Notes, do not meet consolidation requirements under U.S. GAAP. Accordingly, the Company shows the related intercompany debt of $750 million in its Unaudited Condensed Consolidated Balance Sheets at June 30, 2011 and December 31, 2010.

(2)       PartnerRe Finance II Inc., the issuer of the CENts, does not meet consolidation requirements under U.S. GAAP. Accordingly, the Company shows the related intercompany debt of $71 million in its Unaudited Condensed Consolidated Balance Sheets at June 30, 2011 and December 31, 2010.

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Segment Information (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Segment Reporting [Line Items]
Gross premiums written	$ 1,082,205,000	$ 1,140,175,000	$ 2,639,766,000	$ 3,049,501,000
Net premiums written	1,056,467,000	1,112,735,000	2,526,887,000	2,896,899,000
Decrease (increase) in unearned premiums	50,978,000	(8,104,000)	(354,853,000)	(638,489,000)
Net premiums earned	1,107,445,000	1,104,631,000	2,172,034,000	2,258,410,000
Losses and loss expenses and life policy benefits	(814,000,000)	(705,000,000)	(2,422,000,000)	(1,717,000,000)
Acquisition costs	(229,251,000)	(244,144,000)	(437,100,000)	(464,251,000)
Technical result	64,000,000	156,000,000	(687,000,000)	77,000,000
Other income	1,596,000	753,000	3,408,000	2,028,000
Other operating expenses	(113,694,000)	(160,151,000)	(217,991,000)	(288,286,000)
Underwriting result	(49,000,000)	(3,000,000)	(902,000,000)	(209,000,000)
Net investment income	158,328,000	174,454,000	309,962,000	347,576,000
Net realized and unrealized investment gains (losses)	78,199,000	46,046,000	(34,000,000)	191,519,000
Interest expense	(12,214,000)	(12,803,000)	(24,514,000)	(19,935,000)
Amortization of intangible assets	(9,165,000)	(7,833,000)	(17,992,000)	(12,636,000)
Net foreign exchange gains	8,737,000	11,021,000	9,433,000	14,648,000
Income tax expense	(50,085,000)	(17,762,000)	(23,828,000)	(45,316,000)
Interest in (losses) earnings of equity investments	(1,188,000)	1,346,000	(443,000)	3,791,000
Net income (loss)	124,185,000	190,927,000	(682,771,000)	270,581,000
Life [Member]
Segment Reporting [Line Items]
Gross premiums written	195,000,000	167,000,000	403,000,000	354,000,000
Net premiums written	195,000,000	167,000,000	402,000,000	349,000,000
Decrease (increase) in unearned premiums	6,000,000	6,000,000	(17,000,000)	(12,000,000)
Net premiums earned	201,000,000	173,000,000	385,000,000	337,000,000
Losses and loss expenses and life policy benefits	(166,000,000)	(169,000,000)	(311,000,000)	(299,000,000)
Acquisition costs	(26,000,000)	(25,000,000)	(56,000,000)	(49,000,000)
Technical result	9,000,000	(21,000,000)	18,000,000	(11,000,000)
Other income	0	1,000,000	0	1,000,000
Other operating expenses	(13,000,000)	(13,000,000)	(25,000,000)	(27,000,000)
Underwriting result	(4,000,000)	(33,000,000)	(7,000,000)	(37,000,000)
Net investment income	16,000,000	20,000,000	31,000,000	37,000,000
Allocated underwriting result	12,000,000	(13,000,000)	24,000,000	0
Corporate And Other [Member]
Segment Reporting [Line Items]
Gross premiums written	4,000,000	0	6,000,000	3,000,000
Net premiums written	4,000,000	7,000,000	6,000,000	2,000,000
Decrease (increase) in unearned premiums	(3,000,000)	(6,000,000)	(5,000,000)	(1,000,000)
Net premiums earned	1,000,000	1,000,000	1,000,000	1,000,000
Losses and loss expenses and life policy benefits	(2,000,000)	0	(2,000,000)	0
Acquisition costs	0	0	0	0
Technical result	(1,000,000)	1,000,000	(1,000,000)	1,000,000
Other income	1,000,000	(1,000,000)	1,000,000	(1,000,000)
Other operating expenses	(30,000,000)	(65,000,000)	(56,000,000)	(101,000,000)
Net investment income	142,000,000	154,000,000	279,000,000	311,000,000
Net realized and unrealized investment gains (losses)	78,000,000	46,000,000	(34,000,000)	191,000,000
Interest expense	(12,000,000)	(13,000,000)	(24,000,000)	(20,000,000)
Amortization of intangible assets	(9,000,000)	(8,000,000)	(18,000,000)	(13,000,000)
Net foreign exchange gains	9,000,000	11,000,000	9,000,000	15,000,000
Income tax expense	(50,000,000)	(17,000,000)	(24,000,000)	(45,000,000)
Interest in (losses) earnings of equity investments	(1,000,000)	1,000,000	0	4,000,000
Non Life [Member]
Segment Reporting [Line Items]
Gross premiums written	883,000,000	973,000,000	2,231,000,000	2,692,000,000
Net premiums written	857,000,000	939,000,000	2,119,000,000	2,546,000,000
Decrease (increase) in unearned premiums	48,000,000	(8,000,000)	(333,000,000)	(626,000,000)
Net premiums earned	905,000,000	931,000,000	1,786,000,000	1,920,000,000
Losses and loss expenses and life policy benefits	(646,000,000)	(536,000,000)	(2,109,000,000)	(1,418,000,000)
Acquisition costs	(203,000,000)	(219,000,000)	(381,000,000)	(415,000,000)
Technical result	56,000,000	176,000,000	(704,000,000)	87,000,000
Other income	0	1,000,000	2,000,000	2,000,000
Other operating expenses	(71,000,000)	(82,000,000)	(137,000,000)	(160,000,000)
Underwriting result	(15,000,000)	95,000,000	(839,000,000)	(71,000,000)
Reinsurance Ratios [Abstract]
Loss ratio	71.40%	57.60%	118.00%	73.90%
Acquisition ratio	22.40%	23.40%	21.40%	21.60%
Technical ratio	93.80%	81.00%	139.40%	95.50%
Other operating expense ratio	7.90%	8.80%	7.70%	8.30%
Combined ratio	101.70%	89.80%	147.10%	103.80%
Non Life [Member] | North America [Member]
Segment Reporting [Line Items]
Gross premiums written	242,000,000	207,000,000	581,000,000	564,000,000
Net premiums written	242,000,000	207,000,000	581,000,000	564,000,000
Decrease (increase) in unearned premiums	19,000,000	16,000,000	(60,000,000)	(73,000,000)
Net premiums earned	261,000,000	223,000,000	521,000,000	491,000,000
Losses and loss expenses and life policy benefits	(190,000,000)	(116,000,000)	(365,000,000)	(296,000,000)
Acquisition costs	(63,000,000)	(69,000,000)	(129,000,000)	(137,000,000)
Technical result	8,000,000	38,000,000	27,000,000	58,000,000
Reinsurance Ratios [Abstract]
Loss ratio	72.80%	52.20%	70.00%	60.20%
Acquisition ratio	24.10%	30.70%	24.80%	28.00%
Technical ratio	96.90%	82.90%	94.80%	88.20%
Non Life [Member] | Global (Non-US) P&C [Member]
Segment Reporting [Line Items]
Gross premiums written	122,000,000	189,000,000	440,000,000	633,000,000
Net premiums written	121,000,000	186,000,000	437,000,000	621,000,000
Decrease (increase) in unearned premiums	72,000,000	45,000,000	(63,000,000)	(160,000,000)
Net premiums earned	193,000,000	231,000,000	374,000,000	461,000,000
Losses and loss expenses and life policy benefits	(127,000,000)	(141,000,000)	(277,000,000)	(387,000,000)
Acquisition costs	(53,000,000)	(61,000,000)	(93,000,000)	(114,000,000)
Technical result	13,000,000	29,000,000	4,000,000	(40,000,000)
Reinsurance Ratios [Abstract]
Loss ratio	65.90%	61.10%	74.00%	84.00%
Acquisition ratio	27.60%	26.40%	25.00%	24.60%
Technical ratio	93.50%	87.50%	99.00%	108.60%
Non Life [Member] | Global (Non-US) Specialty [Member]
Segment Reporting [Line Items]
Gross premiums written	350,000,000	371,000,000	724,000,000	880,000,000
Net premiums written	333,000,000	355,000,000	648,000,000	811,000,000
Decrease (increase) in unearned premiums	8,000,000	21,000,000	10,000,000	(98,000,000)
Net premiums earned	341,000,000	376,000,000	658,000,000	713,000,000
Losses and loss expenses and life policy benefits	(206,000,000)	(292,000,000)	(427,000,000)	(595,000,000)
Acquisition costs	(78,000,000)	(82,000,000)	(158,000,000)	(146,000,000)
Technical result	57,000,000	2,000,000	73,000,000	(28,000,000)
Reinsurance Ratios [Abstract]
Loss ratio	60.30%	77.60%	64.90%	83.40%
Acquisition ratio	22.90%	21.90%	24.00%	20.50%
Technical ratio	83.20%	99.50%	88.90%	103.90%
Non Life [Member] | Catastrophe Segment [Member]
Segment Reporting [Line Items]
Gross premiums written	169,000,000	206,000,000	486,000,000	615,000,000
Net premiums written	161,000,000	191,000,000	453,000,000	550,000,000
Decrease (increase) in unearned premiums	(51,000,000)	(90,000,000)	(220,000,000)	(295,000,000)
Net premiums earned	110,000,000	101,000,000	233,000,000	255,000,000
Losses and loss expenses and life policy benefits	(123,000,000)	13,000,000	(1,040,000,000)	(140,000,000)
Acquisition costs	(9,000,000)	(7,000,000)	(1,000,000)	(18,000,000)
Technical result	$ (22,000,000)	$ 107,000,000	$ (808,000,000)	$ 97,000,000
Reinsurance Ratios [Abstract]
Loss ratio	111.70%	(12.80%)	446.30%	54.60%
Acquisition ratio	8.10%	6.30%	0.30%	7.30%
Technical ratio	119.80%	(6.50%)	446.60%	61.90%

XML



Derivatives (Tables)

6 Months Ended

Jun. 30, 2011

Disclosure - Derivatives [Abstract]

Fair values and related notional values of derivatives, balance sheets

	Asset		Liability		Net derivatives
	derivatives		derivatives		Net notional
June 30, 2011	at fair value		at fair value		exposure		Fair value
Derivatives not designated as hedges
Foreign exchange forward contracts	$	11,634	$	(4,512)	$	2,956,150	$	7,122
Foreign currency option contracts		2,921		(470)		163,304		2,451
Futures contracts		6,398		(19,613)		2,334,365		(13,215)
Credit default swaps (protection purchased)		4		(2,162)		109,890		(2,158)
Credit default swaps (assumed risks)		906		—		27,500		906
Insurance-linked securities		274		(15,126)		95,848		(14,852)
Total return swaps		4,685		(11,459)		159,720		(6,774)
Interest rate swaps(1)		52		(5,203)		—		(5,151)
Total derivatives	$	26,874	$	(58,545)			$	(31,671)
	Asset		Liability		Net derivatives
	derivatives		derivatives		Net notional
December 31, 2010	at fair value		at fair value		exposure		Fair value
Derivatives designated as hedges
Foreign exchange forward contracts (net investment hedge)	$	—	$	(1,160)	$	198,448	$	(1,160)
Total derivatives designated as hedges	$	—	$	(1,160)			$	(1,160)
Derivatives not designated as hedges
Foreign exchange forward contracts	$	27,880	$	(12,487)	$	1,770,448	$	15,393
Foreign currency option contracts		3,516		—		104,386		3,516
Futures contracts		30,593		(7,956)		1,756,811		22,637
Credit default swaps (protection purchased)		93		(2,407)		113,752		(2,314)
Credit default swaps (assumed risks)		533		(401)		27,500		132
Insurance-linked securities		1,320		(1,393)		88,765		(73)
Total return swaps		6,041		(12,848)		161,408		(6,807)
Interest rate swaps(1)		246		(6,033)		—		(5,787)
Total derivatives not designated as hedges	$	70,222	$	(43,525)			$	26,697
Total derivatives	$	70,222	$	(44,685)			$	25,537

Gains and losses for derivatives not designated as hedges, statement of operations

		Amount of gain		Amount of gain		Amount of gain		Amount of gain
		(loss) on derivatives		(loss) on derivatives		(loss) on derivatives		(loss) on derivatives
		recognized in		recognized in		recognized in		recognized in
		income for the		income for the		income for the		income for the
		three months ended		three months ended		six months ended		six months ended
		June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Foreign exchange forward contracts		$	65,250	$	14,557	$	48,234	$	10,542
Foreign currency option contracts			2,457		(1,066)		2,381		1,134
Total included in net foreign exchange gains and losses		$	67,707	$	13,491	$	50,615	$	11,676
Futures contracts		$	(66,231)	$	(55,170)	$	(86,514)	$	(76,115)
Credit default swaps (protection purchased)			(306)		311		(551)		(341)
Credit default swaps (assumed risks)			770		(1,400)		1,607		(1,379)
Insurance-linked securities			(2,546)		2,676		(9,620)		3,814
Total return swaps			(115)		(212)		684		2,409
Interest rate swaps			(182)		(104)		641		393
Interest rate derivatives			—		—		—		(3,848)
Other			—		55		—		(66)
Total included in net realized and unrealized
	investment gains and losses	$	(68,610)	$	(53,844)	$	(93,753)	$	(75,133)
Total derivatives		$	(903)	$	(40,353)	$	(43,138)	$	(63,457)

XML



Derivatives

6 Months Ended

Jun. 30, 2011

Disclosure - Derivatives [Abstract]

Derivatives

5. Derivatives

The Company's derivative instruments are recorded in the Unaudited CondensedConsolidated Balance Sheets at fair value, with changes in fair value mainly recognized in either net foreign exchange gains and losses or net realized and unrealized investment gains and losses in the Unaudited Condensed Consolidated Statements of Operations or accumulated other comprehensive income or loss in the Unaudited Condensed Consolidated Balance Sheets, depending on the nature of the derivative instrument. The Company's objectives for holding or issuing these derivatives are as follows:

Foreign Exchange Forward Contracts

The Company utilizes foreign exchange forward contracts as part of its overall currency risk management and investment strategies. From time to time, the Company also utilizes foreign exchange forward contracts to hedge a portion of its net investment exposure resulting from the translation of its foreign subsidiaries and branches whose functional currency is other than the U.S. dollar.

Foreign Currency Option Contracts and Futures Contracts

The Company also utilizes foreign currency option contracts to mitigate foreign currency risk. The Company uses exchange traded treasury note futures contracts to manage portfolio duration and commodity and equity futures to hedge certain investments. The Company also uses commodities futures to replicate the investment return on certain benchmarked commodities.

Credit Default Swaps

The Company purchases protection through credit default swaps to mitigate the risk associated with its underwriting operations, most notably in the credit/surety line, and to manage market exposures.

The Company also assumes credit risk through credit default swaps to replicate investment positions. The original term of these credit default swaps is generally five years or less and there are no recourse provisions associated with these swaps. While the Company would be required to perform under exposure assumed through credit default swaps in the event of a default on the underlying issuer, no issuer was in default at June 30, 2011. The counterparties on the Company's assumed credit default swaps are all highly rated financial institutions.

Insurance-Linked Securities

The Company has entered into various weather derivatives, weather futures and longevity total return swaps for which the underlying risks reference parametric weather risks for the weather derivatives and weather futures, and longevity risk for the longevity total return swaps.

Total Return and Interest Rate Swaps and Interest Rate Derivatives

The Company has entered into total return swaps referencing various project, investments and principal finance obligations. The Company has also entered into interest rate swaps to mitigate the interest rate risk on certain of the total return swaps. The Company may also use other interest rate derivatives to mitigate exposure to interest rate volatility.

The fair values and the related notional values of derivatives included in the Company's Unaudited Condensed Consolidated Balance Sheets at June 30, 2011 and December 31, 2010 were as follows (in thousands of U.S. dollars):

	Asset		Liability		Net derivatives
	derivatives		derivatives		Net notional
June 30, 2011	at fair value		at fair value		exposure		Fair value
Derivatives not designated as hedges
Foreign exchange forward contracts	$	11,634	$	(4,512)	$	2,956,150	$	7,122
Foreign currency option contracts		2,921		(470)		163,304		2,451
Futures contracts		6,398		(19,613)		2,334,365		(13,215)
Credit default swaps (protection purchased)		4		(2,162)		109,890		(2,158)
Credit default swaps (assumed risks)		906		—		27,500		906
Insurance-linked securities		274		(15,126)		95,848		(14,852)
Total return swaps		4,685		(11,459)		159,720		(6,774)
Interest rate swaps(1)		52		(5,203)		—		(5,151)
Total derivatives	$	26,874	$	(58,545)			$	(31,671)
	Asset		Liability		Net derivatives
	derivatives		derivatives		Net notional
December 31, 2010	at fair value		at fair value		exposure		Fair value
Derivatives designated as hedges
Foreign exchange forward contracts (net investment hedge)	$	—	$	(1,160)	$	198,448	$	(1,160)
Total derivatives designated as hedges	$	—	$	(1,160)			$	(1,160)
Derivatives not designated as hedges
Foreign exchange forward contracts	$	27,880	$	(12,487)	$	1,770,448	$	15,393
Foreign currency option contracts		3,516		—		104,386		3,516
Futures contracts		30,593		(7,956)		1,756,811		22,637
Credit default swaps (protection purchased)		93		(2,407)		113,752		(2,314)
Credit default swaps (assumed risks)		533		(401)		27,500		132
Insurance-linked securities		1,320		(1,393)		88,765		(73)
Total return swaps		6,041		(12,848)		161,408		(6,807)
Interest rate swaps(1)		246		(6,033)		—		(5,787)
Total derivatives not designated as hedges	$	70,222	$	(43,525)			$	26,697
Total derivatives	$	70,222	$	(44,685)			$	25,537

_______________

(1)       The Company enters into interest rate swaps to mitigate notional exposures oncertain total return swaps. Accordingly, the notional valueof interest rate swaps is not presented separately in the table.       

The fair value of all derivatives at June 30, 2011 andDecember 31, 2010 is recorded in Other invested assets in the Company's Unaudited Condensed Consolidated Balance Sheets. At June 30, 2011, none of the Company's derivatives were designated as hedges.

The gains and losses in the Unaudited Condensed Consolidated Statements of Operations for derivatives not designated as hedges for the three months and sixmonths ended June 30, 2011 and 2010 were as follows (in thousands of U.S. dollars):

		Amount of gain		Amount of gain		Amount of gain		Amount of gain
		(loss) on derivatives		(loss) on derivatives		(loss) on derivatives		(loss) on derivatives
		recognized in		recognized in		recognized in		recognized in
		income for the		income for the		income for the		income for the
		three months ended		three months ended		six months ended		six months ended
		June 30, 2011		June 30, 2010		June 30, 2011		June 30, 2010
Foreign exchange forward contracts		$	65,250	$	14,557	$	48,234	$	10,542
Foreign currency option contracts			2,457		(1,066)		2,381		1,134
Total included in net foreign exchange gains and losses		$	67,707	$	13,491	$	50,615	$	11,676
Futures contracts		$	(66,231)	$	(55,170)	$	(86,514)	$	(76,115)
Credit default swaps (protection purchased)			(306)		311		(551)		(341)
Credit default swaps (assumed risks)			770		(1,400)		1,607		(1,379)
Insurance-linked securities			(2,546)		2,676		(9,620)		3,814
Total return swaps			(115)		(212)		684		2,409
Interest rate swaps			(182)		(104)		641		393
Interest rate derivatives			—		—		—		(3,848)
Other			—		55		—		(66)
Total included in net realized and unrealized
	investment gains and losses	$	(68,610)	$	(53,844)	$	(93,753)	$	(75,133)
Total derivatives		$	(903)	$	(40,353)	$	(43,138)	$	(63,457)

XML



Fair Value (Details) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	$ 14,406,945		$ 14,406,945		$ 12,824,389
Short-term investments, trading securities	215,692		215,692		49,397
Equities, trading securities	994,913		994,913		1,071,676
Other invested assets	40,777		40,777		111,374
Funds held - directly managed	1,158,814		1,158,814		1,542,931
Investments Fair Value Disclosure	16,817,141		16,817,141		15,599,767
Fair Value, Option, Quantitative Disclosures [Line Items]
Change in unrealized gain/loss	107,971	58,824	(28,673)	192,171
Quoted prices in active markets for identical assets (Level 1)
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	0		0		0
Short-term investments, trading securities	0		0		0
Equities, trading securities	775,619		775,619		1,028,263
Other invested assets	(13,417)		(13,417)		23,262
Funds held - directly managed	0		0		0
Investments Fair Value Disclosure	762,202		762,202		1,051,525
Quoted prices in active markets for identical assets (Level 1) | US Government and agencies [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	0		0		0
Funds held - directly managed	0		0		0
Quoted prices in active markets for identical assets (Level 1) | Non US sovereign government supranational and government related [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	0		0		0
Funds held - directly managed	0		0		0
Quoted prices in active markets for identical assets (Level 1) | Corporate [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	0		0		0
Funds held - directly managed	0		0		0
Quoted prices in active markets for identical assets (Level 1) | Asset-backed securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	0		0		0
Quoted prices in active markets for identical assets (Level 1) | Mortgage/asset-backed securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Funds held - directly managed					0
Quoted prices in active markets for identical assets (Level 1) | Residential mortgage-backed securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	0		0		0
Quoted prices in active markets for identical assets (Level 1) | Other mortgage-backed securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	0		0		0
Quoted prices in active markets for identical assets (Level 1) | Consumer noncyclical [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	138,638		138,638		186,016
Quoted prices in active markets for identical assets (Level 1) | Energy [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	96,782		96,782		118,372
Quoted prices in active markets for identical assets (Level 1) | Finance [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	89,054		89,054		112,309
Quoted prices in active markets for identical assets (Level 1) | Technology [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	78,939		78,939		119,214
Quoted prices in active markets for identical assets (Level 1) | Communications [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	76,188		76,188		110,982
Quoted prices in active markets for identical assets (Level 1) | Industrials [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	71,405		71,405		100,572
Quoted prices in active markets for identical assets (Level 1) | Consumer cyclical [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	57,087		57,087		81,595
Quoted prices in active markets for identical assets (Level 1) | Insurance [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	38,447		38,447		48,611
Quoted prices in active markets for identical assets (Level 1) | Other equities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	70,343		70,343		90,220
Quoted prices in active markets for identical assets (Level 1) | Mutual funds and exchange traded funds [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	58,736		58,736		60,372
Quoted prices in active markets for identical assets (Level 1) | Other invested assets other assets [Member ]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Quoted prices in active markets for identical assets (Level 1) | Short-term investments [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Funds held - directly managed	0		0		0
Quoted prices in active markets for identical assets (Level 1) | Other invested assets funds held directly managed [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Funds held - directly managed	0		0		0
Quoted prices in active markets for identical assets (Level 1) | Derivative assets [Member] | Foreign exchange forward contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Quoted prices in active markets for identical assets (Level 1) | Derivative assets [Member] | Foreign currency option contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Quoted prices in active markets for identical assets (Level 1) | Derivative assets [Member] | Futures contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	6,179		6,179		30,593
Quoted prices in active markets for identical assets (Level 1) | Derivative assets [Member] | Credit Default Swap, Buying Protection [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Quoted prices in active markets for identical assets (Level 1) | Derivative assets [Member] | Credit default swaps (assumed risks) [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Quoted prices in active markets for identical assets (Level 1) | Derivative assets [Member] | Insurance-linked securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	23		23		1,320
Quoted prices in active markets for identical assets (Level 1) | Derivative assets [Member] | Total return swaps [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Quoted prices in active markets for identical assets (Level 1) | Derivative assets [Member] | Interest rate swaps [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Quoted prices in active markets for identical assets (Level 1) | Derivative liabilities [Member] | Foreign exchange forward contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Quoted prices in active markets for identical assets (Level 1) | Derivative liabilities [Member] | Foreign currency option contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0
Quoted prices in active markets for identical assets (Level 1) | Derivative liabilities [Member] | Futures contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	(19,126)		(19,126)		(7,956)
Quoted prices in active markets for identical assets (Level 1) | Derivative liabilities [Member] | Credit Default Swap, Buying Protection [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Quoted prices in active markets for identical assets (Level 1) | Derivative liabilities [Member] | Credit default swaps (assumed risks) [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets					0
Quoted prices in active markets for identical assets (Level 1) | Derivative liabilities [Member] | Insurance-linked securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	(493)		(493)		(695)
Quoted prices in active markets for identical assets (Level 1) | Derivative liabilities [Member] | Total return swaps [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Quoted prices in active markets for identical assets (Level 1) | Derivative liabilities [Member] | Interest rate swaps [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Quoted prices in active markets for identical assets (Level 1) | Other invested assets other liabilties [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Significant other observable inputs (Level 2)
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	13,941,891		13,941,891		12,478,854
Short-term investments, trading securities	212,769		212,769		49,397
Equities, trading securities	212,589		212,589		0
Other invested assets	1,711		1,711		9,788
Funds held - directly managed	1,136,739		1,136,739		1,509,917
Investments Fair Value Disclosure	15,505,699		15,505,699		14,047,956
Significant other observable inputs (Level 2) | US Government and agencies [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	1,486,790		1,486,790		917,600
Funds held - directly managed	230,481		230,481		288,164
Significant other observable inputs (Level 2) | Non US sovereign government supranational and government related [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	3,258,355		3,258,355		2,819,193
Funds held - directly managed	313,284		313,284		384,553
Significant other observable inputs (Level 2) | Corporate [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	5,713,985		5,713,985		6,066,865
Funds held - directly managed	550,644		550,644		798,587
Significant other observable inputs (Level 2) | Asset-backed securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	394,046		394,046		343,518
Significant other observable inputs (Level 2) | Mortgage/asset-backed securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Funds held - directly managed					0
Significant other observable inputs (Level 2) | Residential mortgage-backed securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	2,999,005		2,999,005		2,305,525
Significant other observable inputs (Level 2) | Other mortgage-backed securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	89,710		89,710		26,153
Significant other observable inputs (Level 2) | Consumer noncyclical [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	178		178		0
Significant other observable inputs (Level 2) | Energy [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	1,051		1,051		0
Significant other observable inputs (Level 2) | Finance [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	617		617		0
Significant other observable inputs (Level 2) | Technology [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	0		0		0
Significant other observable inputs (Level 2) | Communications [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	33		33		0
Significant other observable inputs (Level 2) | Industrials [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	0		0		0
Significant other observable inputs (Level 2) | Consumer cyclical [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	86		86		0
Significant other observable inputs (Level 2) | Insurance [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	0		0		0
Significant other observable inputs (Level 2) | Other equities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	408		408		0
Significant other observable inputs (Level 2) | Mutual funds and exchange traded funds [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	210,216		210,216		0
Significant other observable inputs (Level 2) | Other invested assets other assets [Member ]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Significant other observable inputs (Level 2) | Short-term investments [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Funds held - directly managed	42,330		42,330		38,613
Significant other observable inputs (Level 2) | Other invested assets funds held directly managed [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Funds held - directly managed	0		0		0
Significant other observable inputs (Level 2) | Derivative assets [Member] | Foreign exchange forward contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	11,634		11,634		27,880
Significant other observable inputs (Level 2) | Derivative assets [Member] | Foreign currency option contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	2,921		2,921		3,516
Significant other observable inputs (Level 2) | Derivative assets [Member] | Futures contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	219		219		0
Significant other observable inputs (Level 2) | Derivative assets [Member] | Credit Default Swap, Buying Protection [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	4		4		93
Significant other observable inputs (Level 2) | Derivative assets [Member] | Credit default swaps (assumed risks) [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	906		906		533
Significant other observable inputs (Level 2) | Derivative assets [Member] | Insurance-linked securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Significant other observable inputs (Level 2) | Derivative assets [Member] | Total return swaps [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	379		379		449
Significant other observable inputs (Level 2) | Derivative assets [Member] | Interest rate swaps [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	52		52		246
Significant other observable inputs (Level 2) | Derivative liabilities [Member] | Foreign exchange forward contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	(4,512)		(4,512)		(13,647)
Significant other observable inputs (Level 2) | Derivative liabilities [Member] | Foreign currency option contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	(470)		(470)
Significant other observable inputs (Level 2) | Derivative liabilities [Member] | Futures contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	(487)		(487)		0
Significant other observable inputs (Level 2) | Derivative liabilities [Member] | Credit Default Swap, Buying Protection [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	(2,162)		(2,162)		(2,407)
Significant other observable inputs (Level 2) | Derivative liabilities [Member] | Credit default swaps (assumed risks) [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets					(401)
Significant other observable inputs (Level 2) | Derivative liabilities [Member] | Insurance-linked securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Significant other observable inputs (Level 2) | Derivative liabilities [Member] | Total return swaps [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Significant other observable inputs (Level 2) | Derivative liabilities [Member] | Interest rate swaps [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	(5,203)		(5,203)		(6,033)
Significant other observable inputs (Level 2) | Other invested assets other liabilties [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	(1,570)		(1,570)		(441)
Significant unobservable inputs (Level 3)
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	465,054		465,054		345,535
Short-term investments, trading securities	2,923		2,923		0
Equities, trading securities	6,705		6,705		43,413
Other invested assets	52,483		52,483		78,324
Funds held - directly managed	22,075		22,075		33,014
Investments Fair Value Disclosure	549,240		549,240		500,286
Significant unobservable inputs (Level 3) | US Government and agencies [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	86,782		86,782		55,124
Funds held - directly managed	355		355		368
Significant unobservable inputs (Level 3) | Non US sovereign government supranational and government related [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	0		0		0
Funds held - directly managed	0		0		0
Significant unobservable inputs (Level 3) | Corporate [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	116,428		116,428		76,982
Funds held - directly managed	0		0		0
Significant unobservable inputs (Level 3) | Asset-backed securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	261,843		261,843		213,139
Significant unobservable inputs (Level 3) | Mortgage/asset-backed securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Funds held - directly managed					12,118
Significant unobservable inputs (Level 3) | Residential mortgage-backed securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	0		0		0
Significant unobservable inputs (Level 3) | Other mortgage-backed securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	1		1		290
Significant unobservable inputs (Level 3) | Consumer noncyclical [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	0		0		0
Significant unobservable inputs (Level 3) | Energy [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	0		0		0
Significant unobservable inputs (Level 3) | Finance [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	163		163		2,486
Significant unobservable inputs (Level 3) | Technology [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	0		0		0
Significant unobservable inputs (Level 3) | Communications [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	0		0		0
Significant unobservable inputs (Level 3) | Industrials [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	0		0		0
Significant unobservable inputs (Level 3) | Consumer cyclical [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	0		0		0
Significant unobservable inputs (Level 3) | Insurance [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	0		0		0
Significant unobservable inputs (Level 3) | Other equities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	0		0		0
Significant unobservable inputs (Level 3) | Mutual funds and exchange traded funds [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	6,542		6,542		40,927
Significant unobservable inputs (Level 3) | Other invested assets other assets [Member ]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	74,018		74,018		86,278
Significant unobservable inputs (Level 3) | Short-term investments [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Funds held - directly managed	0		0		0
Significant unobservable inputs (Level 3) | Other invested assets funds held directly managed [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Funds held - directly managed	21,720		21,720		20,528
Significant unobservable inputs (Level 3) | Derivative assets [Member] | Foreign exchange forward contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Significant unobservable inputs (Level 3) | Derivative assets [Member] | Foreign currency option contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Significant unobservable inputs (Level 3) | Derivative assets [Member] | Futures contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Significant unobservable inputs (Level 3) | Derivative assets [Member] | Credit Default Swap, Buying Protection [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Significant unobservable inputs (Level 3) | Derivative assets [Member] | Credit default swaps (assumed risks) [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Significant unobservable inputs (Level 3) | Derivative assets [Member] | Insurance-linked securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	251		251		0
Significant unobservable inputs (Level 3) | Derivative assets [Member] | Total return swaps [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	4,306		4,306		5,592
Significant unobservable inputs (Level 3) | Derivative assets [Member] | Interest rate swaps [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Significant unobservable inputs (Level 3) | Derivative liabilities [Member] | Foreign exchange forward contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Significant unobservable inputs (Level 3) | Derivative liabilities [Member] | Foreign currency option contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0
Significant unobservable inputs (Level 3) | Derivative liabilities [Member] | Futures contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Significant unobservable inputs (Level 3) | Derivative liabilities [Member] | Credit Default Swap, Buying Protection [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Significant unobservable inputs (Level 3) | Derivative liabilities [Member] | Credit default swaps (assumed risks) [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets					0
Significant unobservable inputs (Level 3) | Derivative liabilities [Member] | Insurance-linked securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	(14,633)		(14,633)		(698)
Significant unobservable inputs (Level 3) | Derivative liabilities [Member] | Total return swaps [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	(11,459)		(11,459)		(12,848)
Significant unobservable inputs (Level 3) | Derivative liabilities [Member] | Interest rate swaps [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
Significant unobservable inputs (Level 3) | Other invested assets other liabilties [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	0		0		0
US Government and agencies [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	1,573,572		1,573,572		972,724
Funds held - directly managed	230,836		230,836		288,532
Non US sovereign government supranational and government related [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	3,258,355		3,258,355		2,819,193
Funds held - directly managed	313,284		313,284		384,553
Corporate [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	5,830,413		5,830,413		6,143,847
Funds held - directly managed	550,644		550,644		798,587
Asset-backed securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	655,889		655,889		556,657
Mortgage/asset-backed securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Funds held - directly managed					12,118
Residential mortgage-backed securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	2,999,005		2,999,005		2,305,525
Other mortgage-backed securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Fixed maturities, trading securities	89,711		89,711		26,443
Consumer noncyclical [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	138,816		138,816		186,016
Energy [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	97,833		97,833		118,372
Finance [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	89,834		89,834		114,795
Technology [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	78,939		78,939		119,214
Communications [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	76,221		76,221		110,982
Industrials [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	71,405		71,405		100,572
Consumer cyclical [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	57,173		57,173		81,595
Insurance [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	38,447		38,447		48,611
Other equities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	70,751		70,751		90,220
Mutual funds and exchange traded funds [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Equities, trading securities	275,494		275,494		101,299
Other invested assets other assets [Member ]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	74,018		74,018		86,278
Short-term investments [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Funds held - directly managed	42,330		42,330		38,613
Short-term investments [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Change in unrealized gain/loss	194	7	(446)	(2,418)
Other invested assets funds held directly managed [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Funds held - directly managed	21,720		21,720		20,528
Derivative assets [Member] | Foreign exchange forward contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	11,634		11,634		27,880
Derivative assets [Member] | Foreign currency option contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	2,921		2,921		3,516
Derivative assets [Member] | Futures contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	6,398		6,398		30,593
Derivative assets [Member] | Credit Default Swap, Buying Protection [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	4		4		93
Derivative assets [Member] | Credit default swaps (assumed risks) [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	906		906		533
Derivative assets [Member] | Insurance-linked securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	274		274		1,320
Derivative assets [Member] | Total return swaps [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	4,685		4,685		6,041
Derivative assets [Member] | Interest rate swaps [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	52		52		246
Derivative liabilities [Member] | Foreign exchange forward contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	(4,512)		(4,512)		(13,647)
Derivative liabilities [Member] | Foreign currency option contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	(470)		(470)
Derivative liabilities [Member] | Futures contracts [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	(19,613)		(19,613)		(7,956)
Derivative liabilities [Member] | Credit Default Swap, Buying Protection [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	(2,162)		(2,162)		(2,407)
Derivative liabilities [Member] | Credit default swaps (assumed risks) [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets					(401)
Derivative liabilities [Member] | Insurance-linked securities [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	(15,126)		(15,126)		(1,393)
Derivative liabilities [Member] | Total return swaps [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	(11,459)		(11,459)		(12,848)
Derivative liabilities [Member] | Interest rate swaps [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	(5,203)		(5,203)		(6,033)
Other invested assets other liabilties [Member]
Fair Value Assets Measured On Recurring Basis Financial Statement Captions [Line Items]
Other invested assets	(1,570)		(1,570)		(441)
Fixed maturities [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Change in unrealized gain/loss	130,907	165,665	(9,321)	264,762
Other invested assets [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Change in unrealized gain/loss	(3,689)	(226)	(3,333)	(142)
Equity securities [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Change in unrealized gain/loss	(30,197)	(126,610)	(14,079)	(101,198)
Funds Held - Directly Managed investment [Member]
Fair Value, Option, Quantitative Disclosures [Line Items]
Change in unrealized gain/loss	$ 10,756	$ 19,988	$ (1,494)	$ 31,167

XML



Unaudited Condensed Consolidated Statements of Shareholders' Equity (USD $) In Thousands	Total	Common shares	Preferred shares	Additional paid-in capital	Accumulated other comprehensive income (loss)	Retained earnings	Common shares held in treasury
Balance at beginning of period at Dec. 31, 2009		$ 82,586	$ 20,800	$ 3,357,004	$ 84,927	$ 4,100,782	$ (372)
Net (loss) income	270,581					270,581
Dividends on common shares						(79,345)
Dividends on preferred shares	(17,263)					(17,263)
Issuance of common shares		629		30,331
Issuance of preferred shares			0	0
Change in currency translation adjustment	(174,078)				(174,078)
Change in other accumulated comprehensive loss, net of tax	(5,254)				(5,254)
Repurchase of common shares							(600,086)
Balance at end of period at Jun. 30, 2010	7,071,242	83,215	20,800	3,387,335	(94,405)	4,274,755	(600,458)
Balance at beginning of period at Dec. 31, 2010	7,206,919	84,033	20,800	3,419,864	4,056	4,761,178	(1,083,012)
Net (loss) income	(682,771)					(682,771)
Dividends on common shares						(77,746)
Dividends on preferred shares	(17,263)					(17,263)
Issuance of common shares		536		25,421
Issuance of preferred shares			14,950	346,772
Change in currency translation adjustment	44,084				44,084
Change in other accumulated comprehensive loss, net of tax	(2,155)				(2,155)
Repurchase of common shares							(226,703)
Balance at end of period at Jun. 30, 2011	$ 6,632,044	$ 84,569	$ 35,750	$ 3,792,057	$ 45,985	$ 3,983,398	$ (1,309,715)

XML



Fair Value (Details - Level 3 inputs and transfers) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Dec. 31, 2010
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	$ 571,579,000	$ 300,462,000	$ 500,286,000	$ 291,769,000
Realized and unrealized investment gains (losses) included in net income	9,368,000	3,423,000	(34,172,000)	(4,886,000)
Purchases	78,480,000		182,968,000
Sales	(110,187,000)		(140,022,000)
Net purchases, sales and settlements		65,559,000		75,642,000
Net transfers (out of)/ into Level 3	0	0	40,180,000	6,919,000
Balance, end of period	549,240,000	369,444,000	549,240,000	369,444,000
Change in unrealized investment gains (losses) relating to assets held at the end of period	(3,019,000)	3,423,000	(3,603,000)	(6,825,000)
Fair value of financial instrument liabilities [Line Items]
Debt related to senior notes	750,000,000		750,000,000		750,000,000
Debt related to capital efficient notes	70,989,000		70,989,000		70,989,000
Fixed maturities [Member] | Funds held directly managed [Member]
Fair Value - Other Details [Line Items]
Transfers into Level 3				16,900,000
Fixed maturities [Member] | Trading securities [Member]
Fair Value - Other Details [Line Items]
Transfers out of Level 3				18,100,000
Transfers into Level 3			40,200,000
US Government and agencies [Member] | Fixed maturities [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	55,929,000	9,720,000	55,124,000	4,286,000
Realized and unrealized investment gains (losses) included in net income	819,000	272,000	1,624,000	272,000
Purchases	30,064,000		30,064,000
Sales	(30,000)		(30,000)
Net purchases, sales and settlements		7,000		9,727,000
Net transfers (out of)/ into Level 3	0	0	0	(4,286,000)
Balance, end of period	86,782,000	9,999,000	86,782,000	9,999,000
Change in unrealized investment gains (losses) relating to assets held at the end of period	819,000	272,000	1,624,000	272,000
Corporate [Member] | Fixed maturities [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	115,107,000	10,057,000	76,982,000	15,041,000
Realized and unrealized investment gains (losses) included in net income	2,049,000	300,000	(37,066,000)	423,000
Purchases	84,000		40,878,000
Sales	(812,000)		(4,546,000)
Net purchases, sales and settlements		5,080,000		10,900,000
Net transfers (out of)/ into Level 3	0	0	40,180,000	(10,927,000)
Balance, end of period	116,428,000	15,437,000	116,428,000	15,437,000
Change in unrealized investment gains (losses) relating to assets held at the end of period	2,049,000	300,000	2,368,000	423,000
Asset-backed securities [Member] | Fixed maturities [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	262,408,000	84,984,000	213,139,000	99,952,000
Realized and unrealized investment gains (losses) included in net income	7,707,000	7,359,000	10,678,000	4,601,000
Purchases	47,130,000		101,644,000
Sales	(55,402,000)		(63,618,000)
Net purchases, sales and settlements		133,615,000		124,305,000
Net transfers (out of)/ into Level 3	0	0	0	(2,900,000)
Balance, end of period	261,843,000	225,958,000	261,843,000	225,958,000
Change in unrealized investment gains (losses) relating to assets held at the end of period	(2,660,000)	7,359,000	4,257,000	4,576,000
Residential mortgage-backed securities [Member] | Fixed maturities [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	4,301,000	95,029,000	0	77,440,000
Realized and unrealized investment gains (losses) included in net income	846,000	0	1,385,000	191,000
Purchases	0		4,212,000
Sales	(5,147,000)		(5,597,000)
Net purchases, sales and settlements		(95,029,000)		(77,631,000)
Net transfers (out of)/ into Level 3	0	0	0	0
Balance, end of period	0	0	0	0
Change in unrealized investment gains (losses) relating to assets held at the end of period	0	0	0	0
Other mortgage-backed securities [Member] | Fixed maturities [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	576,000	811,000	290,000	874,000
Realized and unrealized investment gains (losses) included in net income	(191,000)	123,000	(224,000)	153,000
Purchases	0		408,000
Sales	(384,000)		(473,000)
Net purchases, sales and settlements		(80,000)		(173,000)
Net transfers (out of)/ into Level 3	0	0	0	0
Balance, end of period	1,000	854,000	1,000	854,000
Change in unrealized investment gains (losses) relating to assets held at the end of period	(166,000)	123,000	(203,000)	153,000
Fixed maturities [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	438,321,000	200,601,000	345,535,000	197,593,000
Realized and unrealized investment gains (losses) included in net income	11,230,000	8,054,000	(23,603,000)	5,640,000
Purchases	77,278,000		177,206,000
Sales	(61,775,000)		(74,264,000)
Net purchases, sales and settlements		43,593,000		67,128,000
Net transfers (out of)/ into Level 3	0	0	40,180,000	(18,113,000)
Balance, end of period	465,054,000	252,248,000	465,054,000	252,248,000
Change in unrealized investment gains (losses) relating to assets held at the end of period	42,000	8,054,000	8,046,000	5,424,000
Finance [Member] | Equity securities [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	161,000	2,459,000	2,486,000	2,488,000
Realized and unrealized investment gains (losses) included in net income	2,000	(1,039,000)	239,000	(1,068,000)
Purchases	0		0
Sales	0		(2,562,000)
Net purchases, sales and settlements		695,000		695,000
Net transfers (out of)/ into Level 3	0	0	0	0
Balance, end of period	163,000	2,115,000	163,000	2,115,000
Change in unrealized investment gains (losses) relating to assets held at the end of period	2,000	(1,039,000)	13,000	(1,068,000)
Industrials [Member] | Equity securities [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period				805,000
Realized and unrealized investment gains (losses) included in net income				(84,000)
Net purchases, sales and settlements				(721,000)
Net transfers (out of)/ into Level 3				0
Balance, end of period		0		0
Change in unrealized investment gains (losses) relating to assets held at the end of period				0
Mutual funds and exchange traded funds [Member] | Equity securities [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	41,451,000	35,670,000	40,927,000	34,810,000
Realized and unrealized investment gains (losses) included in net income	594,000	(1,058,000)	1,242,000	(198,000)
Purchases	0		0
Sales	(35,503,000)		(35,627,000)
Net purchases, sales and settlements		5,000,000		5,000,000
Net transfers (out of)/ into Level 3	0	0	0	0
Balance, end of period	6,542,000	39,612,000	6,542,000	39,612,000
Change in unrealized investment gains (losses) relating to assets held at the end of period	(804,000)	(1,058,000)	(382,000)	(198,000)
Equity securities [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	41,612,000	38,129,000	43,413,000	38,103,000
Realized and unrealized investment gains (losses) included in net income	596,000	(2,097,000)	1,481,000	(1,350,000)
Purchases	0		0
Sales	(35,503,000)		(38,189,000)
Net purchases, sales and settlements		5,695,000		4,974,000
Net transfers (out of)/ into Level 3	0	0	0	0
Balance, end of period	6,705,000	41,727,000	6,705,000	41,727,000
Change in unrealized investment gains (losses) relating to assets held at the end of period	(802,000)	(2,097,000)	(369,000)	(1,266,000)
Other invested assets other assets [Member ] | Other invested assets [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	84,662,000	25,918,000	86,278,000	25,815,000
Realized and unrealized investment gains (losses) included in net income	(1,303,000)	(253,000)	(3,207,000)	(169,000)
Purchases	3,568,000		6,548,000
Sales	(12,909,000)		(15,601,000)
Net purchases, sales and settlements		24,624,000		24,643,000
Net transfers (out of)/ into Level 3	0	0	0	0
Balance, end of period	74,018,000	50,289,000	74,018,000	50,289,000
Change in unrealized investment gains (losses) relating to assets held at the end of period	(1,016,000)	(253,000)	(2,497,000)	(169,000)
Other invested assets [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	67,620,000	17,920,000	78,324,000	16,454,000
Realized and unrealized investment gains (losses) included in net income	(981,000)	1,519,000	(12,010,000)	4,146,000
Purchases	(1,247,000)		1,770,000
Sales	(12,909,000)		(15,601,000)
Net purchases, sales and settlements		16,271,000		6,944,000
Net transfers (out of)/ into Level 3	0	0	0	8,166,000
Balance, end of period	52,483,000	35,710,000	52,483,000	35,710,000
Change in unrealized investment gains (losses) relating to assets held at the end of period	(782,000)	1,519,000	(11,390,000)	2,321,000
Other invested assets [Member] | Derivatives, net [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	(17,042,000)	(7,998,000)	(7,954,000)	(9,361,000)
Realized and unrealized investment gains (losses) included in net income	322,000	1,772,000	(8,803,000)	4,315,000
Purchases	(4,815,000)		(4,778,000)
Sales	0		0
Net purchases, sales and settlements		(8,353,000)		(17,699,000)
Net transfers (out of)/ into Level 3	0	0	0	8,166,000
Balance, end of period	(21,535,000)	(14,579,000)	(21,535,000)	(14,579,000)
Change in unrealized investment gains (losses) relating to assets held at the end of period	234,000	1,772,000	(8,893,000)	2,490,000
US Government and agencies [Member] | Funds Held - Directly Managed investment [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	366,000	204,000	368,000	375,000
Realized and unrealized investment gains (losses) included in net income	(11,000)	153,000	(13,000)	(18,000)
Purchases	0		0
Sales	0		0
Net purchases, sales and settlements		0		0
Net transfers (out of)/ into Level 3	0	0	0	0
Balance, end of period	355,000	357,000	355,000	357,000
Change in unrealized investment gains (losses) relating to assets held at the end of period	(11,000)	153,000	(13,000)	(18,000)
Mortgage/asset-backed securities [Member] | Funds Held - Directly Managed investment [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period		13,260,000	12,118,000	142,000
Realized and unrealized investment gains (losses) included in net income		(683,000)	(150,000)	(4,431,000)
Purchases			0
Sales			(11,968,000)
Net purchases, sales and settlements		0		0
Net transfers (out of)/ into Level 3		0	0	16,866,000
Balance, end of period	0	12,577,000	0	12,577,000
Change in unrealized investment gains (losses) relating to assets held at the end of period		(683,000)	0	(4,426,000)
Other invested assets funds held directly managed [Member] | Funds Held - Directly Managed investment [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	22,456,000	30,348,000	20,528,000	35,685,000
Realized and unrealized investment gains (losses) included in net income	(736,000)	(3,523,000)	1,192,000	(8,860,000)
Purchases	0		0
Sales	0		0
Net purchases, sales and settlements		0		0
Net transfers (out of)/ into Level 3	0	0	0	0
Balance, end of period	21,720,000	26,825,000	21,720,000	26,825,000
Change in unrealized investment gains (losses) relating to assets held at the end of period	(736,000)	(3,523,000)	1,192,000	(8,860,000)
Funds Held - Directly Managed investment [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	22,822,000	43,812,000	33,014,000	39,619,000
Realized and unrealized investment gains (losses) included in net income	(747,000)	(4,053,000)	1,029,000	(13,322,000)
Purchases	0		0
Sales	0		(11,968,000)
Net purchases, sales and settlements		0		(3,404,000)
Net transfers (out of)/ into Level 3	0	0	0	16,866,000
Balance, end of period	22,075,000	39,759,000	22,075,000	39,759,000
Change in unrealized investment gains (losses) relating to assets held at the end of period	(747,000)	(4,053,000)	1,179,000	(13,304,000)
Funds Held - Directly Managed investment [Member] | Non US Sovereign Government Supranational And Government Related Debt Securities [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period				3,417,000
Realized and unrealized investment gains (losses) included in net income				(13,000)
Net purchases, sales and settlements				(3,404,000)
Net transfers (out of)/ into Level 3				0
Balance, end of period		0		0
Change in unrealized investment gains (losses) relating to assets held at the end of period				0
Short-term investments [Member]
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Balance, beginning of period	1,204,000		0
Realized and unrealized investment gains (losses) included in net income	(730,000)		(1,069,000)
Purchases	2,449,000		3,992,000
Sales	0		0
Net transfers (out of)/ into Level 3	0		0
Balance, end of period	2,923,000		2,923,000
Change in unrealized investment gains (losses) relating to assets held at the end of period	(730,000)		(1,069,000)
Trading securities [Member] | Derivatives, net [Member]
Fair Value - Other Details [Line Items]
Transfers out of Level 3				(8,200,000)
Estimate of Fair Value, Fair Value Disclosure [Member]
Fair value of financial instrument liabilities [Line Items]
Debt related to senior notes	793,773,000		793,773,000		781,950,000
Debt related to capital efficient notes	61,133,000		61,133,000		59,261,000
Carrying value [Member]
Fair value of financial instrument liabilities [Line Items]
Debt related to senior notes	750,000,000		750,000,000		750,000,000
Debt related to capital efficient notes	63,384,000		63,384,000		63,384,000
Funds held directly managed [Member]
Fair Value - Other Details [Line Items]
Cash and cash equivalents	149,300,000		149,300,000		129,200,000
Accrued investment income	14,900,000		14,900,000		19,900,000
Other net assets	56,500,000		56,500,000		80,100,000
Trading securities [Member]
Fair Value - Other Details [Line Items]
Aggregate carrying amount of other invested assets not carried at fair value	$ 297,600,000		$ 297,600,000		$ 241,000,000

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Derivatives (Details - Income Statement) (Derivates not designated as hedges [Member], USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) on derivatives recognized in income	$ (903)	$ (40,353)	$ (43,138)	$ (63,457)
Foreign exchange forward contracts [Member] | Net foreign exchange gains and losses [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) on derivatives recognized in income	65,250	14,557	48,234	10,542
Foreign currency option contracts [Member] | Net foreign exchange gains and losses [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) on derivatives recognized in income	2,457	(1,066)	2,381	1,134
Futures contracts [Member] | Net realized and unrealized investment gains and losses [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) on derivatives recognized in income	(66,231)	(55,170)	(86,514)	(76,115)
Credit default swaps (protection purchased) [Member] | Net realized and unrealized investment gains and losses [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) on derivatives recognized in income	(306)	311	(551)	(341)
Credit default swaps (assumed risks) [Member] | Net realized and unrealized investment gains and losses [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) on derivatives recognized in income	770	(1,400)	1,607	(1,379)
Insurance-linked securities [Member] | Net realized and unrealized investment gains and losses [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) on derivatives recognized in income	(2,546)	2,676	(9,620)	3,814
Total return swaps [Member] | Net realized and unrealized investment gains and losses [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) on derivatives recognized in income	(115)	(212)	684	2,409
Interest rate swaps [Member] | Net realized and unrealized investment gains and losses [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) on derivatives recognized in income	(182)	(104)	641	393
Interest rate derivatives [Member] | Net realized and unrealized investment gains and losses [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) on derivatives recognized in income	0	0	0	(3,848)
Other [Member] | Net realized and unrealized investment gains and losses [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) on derivatives recognized in income	0	55	0	(66)
Net foreign exchange gains and losses [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) on derivatives recognized in income	67,707	13,491	50,615	11,676
Net realized and unrealized investment gains and losses [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) on derivatives recognized in income	$ (68,610)	$ (53,844)	$ (93,753)	$ (75,133)

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Organization

6 Months Ended

Jun. 30, 2011

Organization

Organization

PartnerRe Ltd.

Notes to Unaudited Condensed Consolidated Financial Statements

1. Organization

PartnerRe Ltd. (the Company) provides reinsurance on a worldwide basis through its principal wholly-owned subsidiaries, including Partner Reinsurance Company Ltd., Partner Reinsurance Europe Limited and Partner Reinsurance Company of the U.S. Risks reinsured include, but are not limited to, property, casualty, motor, agriculture, aviation/space, catastrophe, credit/surety, engineering, energy, marine, specialty property, specialty casualty, multiline and other lines, mortality, longevity and health and alternative risk products. The Company's alternative risk products include weather and credit protection to financial, industrial and service companies on a worldwide basis.

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Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2011

Significant Accounting Policies

Basis of Accounting

The Company's Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP)for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. The Unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its subsidiaries. Intercompany accounts and transactions have been eliminated. To facilitate comparison of information across periods, certain reclassifications have been made to prior year amounts to conform to the current year's presentation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. While Management believes that the amounts included in the Unaudited Condensed Consolidated Financial Statements reflect its best estimates and assumptions, actual results could differ from those estimates. The Company's principal estimates include:

•       Unpaid losses and loss expenses;

•       Policy benefits for life and annuity contracts;

•        Gross and net premiums written and net premiums earned;

•       Recoverability of deferred acquisition costs;

•       Recoverability of deferred tax assets;

•       Valuation of goodwill and intangible assets; and

•        Valuation of certain assets and derivative financial instruments that are measured using significant unobservable inputs.

In the opinion of Management, all adjustments (which include normal recurring adjustments) necessary for a fair presentation of results for the interim periods have been made. As the Company's reinsurance operations are exposed to low-frequency, high-severity risk events, some of which are seasonal, results for certain interim periods may include unusually low loss experience, while results for other interim periods may include significant catastrophic losses. Consequently, the Company's results for interim periods are not necessarily indicative of results for the full year. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010.

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2011

Segment Information

Segment reporting table

Segment Information
For the three months ended June 30, 2011
					Global			Global						Total
		North			(Non-U.S.)			(Non-U.S.)						Non-life			Life		Corporate
		America			P&C			Specialty			Catastrophe			Segment			Segment		and Other		Total
Gross premiums written		$	242		$	122		$	350		$	169		$	883		$	195	$	4	$	1,082
Net premiums written		$	242		$	121		$	333		$	161		$	857		$	195	$	4	$	1,056
Decrease (increase) in unearned premiums			19			72			8			(51)			48			6		(3)		51
Net premiums earned		$	261		$	193		$	341		$	110		$	905		$	201	$	1	$	1,107
Losses and loss expenses and
life policy benefits			(190)			(127)			(206)			(123)			(646)			(166)		(2)		(814)
Acquisition costs			(63)			(53)			(78)			(9)			(203)			(26)		—		(229)
Technical result		$	8		$	13		$	57		$	(22)		$	56		$	9	$	(1)	$	64
Other income															—			—		1		1
Other operating expenses															(71)			(13)		(30)		(114)
Underwriting result														$	(15)		$	(4)		n/a	$	(49)
Net investment income																		16		142		158
Allocated underwriting result	(1)																$	12		n/a		n/a
Net realized and unrealized investment gains																				78		78
Interest expense																				(12)		(12)
Amortization of intangible assets																				(9)		(9)
Net foreign exchange gains																				9		9
Income tax expense																				(50)		(50)
Interest in losses of equity investments																				(1)		(1)
Net income																				n/a	$	124
Loss ratio (2)			72.8	%		65.9	%		60.3	%		111.7	%		71.4	%
Acquisition ratio (3)			24.1			27.6			22.9			8.1			22.4
Technical ratio (4)			96.9	%		93.5	%		83.2	%		119.8	%		93.8	%
Other operating expense ratio (5)															7.9
Combined ratio (6)															101.7	%

Segment Information
For the three months ended June 30, 2010
				Global			Global						Total
	North			(Non-U.S.)			(Non-U.S.)						Non-life			Life		Corporate
	America			P&C			Specialty			Catastrophe			Segment			Segment		and Other		Total
Gross premiums written	$	207		$	189		$	371		$	206		$	973		$	167	$	—	$	1,140
Net premiums written	$	207		$	186		$	355		$	191		$	939		$	167	$	7	$	1,113
Decrease (increase) in unearned premiums		16			45			21			(90)			(8)			6		(6)		(8)
Net premiums earned	$	223		$	231		$	376		$	101		$	931		$	173	$	1	$	1,105
Losses and loss expenses and
life policy benefits		(116)			(141)			(292)			13			(536)			(169)		—		(705)
Acquisition costs		(69)			(61)			(82)			(7)			(219)			(25)		—		(244)
Technical result	$	38		$	29		$	2		$	107		$	176		$	(21)	$	1	$	156
Other income (loss)														1			1		(1)		1
Other operating expenses														(82)			(13)		(65)		(160)
Underwriting result													$	95		$	(33)		n/a	$	(3)
Net investment income																	20		154		174
Allocated underwriting result																$	(13)		n/a		n/a
Net realized and unrealized investment gains																			46		46
Interest expense																			(13)		(13)
Amortization of intangible assets																			(8)		(8)
Net foreign exchange gains																			11		11
Income tax expense																			(17)		(17)
Interest in earnings of equity investments																			1		1
Net income																			n/a	$	191
Loss ratio		52.2	%		61.1	%		77.6	%		(12.8)	%		57.6	%
Acquisition ratio		30.7			26.4			21.9			6.3			23.4
Technical ratio		82.9	%		87.5	%		99.5	%		(6.5)	%		81.0	%
Other operating expense ratio														8.8
Combined ratio														89.8	%

Segment Information
For the six months ended June 30, 2011
				Global			Global						Total
	North			(Non-U.S.)			(Non-U.S.)						Non-life			Life		Corporate
	America			P&C			Specialty			Catastrophe			Segment			Segment		and Other		Total
Gross premiums written	$	581		$	440		$	724		$	486		$	2,231		$	403	$	6	$	2,640
Net premiums written	$	581		$	437		$	648		$	453		$	2,119		$	402	$	6	$	2,527
(Increase) decrease in unearned premiums		(60)			(63)			10			(220)			(333)			(17)		(5)		(355)
Net premiums earned	$	521		$	374		$	658		$	233		$	1,786		$	385	$	1	$	2,172
Losses and loss expenses and
life policy benefits		(365)			(277)			(427)			(1,040)			(2,109)			(311)		(2)		(2,422)
Acquisition costs		(129)			(93)			(158)			(1)			(381)			(56)		—		(437)
Technical result	$	27		$	4		$	73		$	(808)		$	(704)		$	18	$	(1)	$	(687)
Other income														2			—		1		3
Other operating expenses														(137)			(25)		(56)		(218)
Underwriting result													$	(839)		$	(7)		n/a	$	(902)
Net investment income																	31		279		310
Allocated underwriting result																$	24		n/a		n/a
Net realized and unrealized investment losses																			(34)		(34)
Interest expense																			(24)		(24)
Amortization of intangible assets																			(18)		(18)
Net foreign exchange gains																			9		9
Income tax expense																			(24)		(24)
Interest in losses of equity investments																			—		—
Net loss																			n/a	$	(683)
Loss ratio		70.0	%		74.0	%		64.9	%		446.3	%		118.0	%
Acquisition ratio		24.8			25.0			24.0			0.3			21.4
Technical ratio		94.8	%		99.0	%		88.9	%		446.6	%		139.4	%
Other operating expense ratio														7.7
Combined ratio														147.1	%

Segment Information
For the six months ended June 30, 2010
				Global			Global						Total
	North			(Non-U.S.)			(Non-U.S.)						Non-life			Life		Corporate
	America			P&C			Specialty			Catastrophe			Segment			Segment		and Other		Total
Gross premiums written	$	564		$	633		$	880		$	615		$	2,692		$	354	$	3	$	3,049
Net premiums written	$	564		$	621		$	811		$	550		$	2,546		$	349	$	2	$	2,897
Increase in unearned premiums		(73)			(160)			(98)			(295)			(626)			(12)		(1)		(639)
Net premiums earned	$	491		$	461		$	713		$	255		$	1,920		$	337	$	1	$	2,258
Losses and loss expenses and
life policy benefits		(296)			(387)			(595)			(140)			(1,418)			(299)		—		(1,717)
Acquisition costs		(137)			(114)			(146)			(18)			(415)			(49)		—		(464)
Technical result	$	58		$	(40)		$	(28)		$	97		$	87		$	(11)	$	1	$	77
Other income (loss)														2			1		(1)		2
Other operating expenses														(160)			(27)		(101)		(288)
Underwriting result													$	(71)		$	(37)		n/a	$	(209)
Net investment income																	37		311		348
Allocated underwriting result																$	—		n/a		n/a
Net realized and unrealized investment gains																			191		191
Interest expense																			(20)		(20)
Amortization of intangible assets																			(13)		(13)
Net foreign exchange gains																			15		15
Income tax expense																			(45)		(45)
Interest in earnings of equity investments																			4		4
Net income																			n/a	$	271
Loss ratio		60.2	%		84.0	%		83.4	%		54.6	%		73.9	%
Acquisition ratio		28.0			24.6			20.5			7.3			21.6
Technical ratio		88.2	%		108.6	%		103.9	%		61.9	%		95.5	%
Other operating expense ratio														8.3
Combined ratio														103.8	%

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Unaudited Condensed Consolidated Balance Sheets (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
Assets
Fixed maturities, trading securities, at fair value (amortized cost: 2011, $13,984,225; 2010, $12,394,797)	$ 14,406,945	$ 12,824,389
Short-term investments, trading securities, at fair value (amortized cost: 2011, $216,881; 2010, $49,132)	215,692	49,397
Equities, trading securities, at fair value (cost: 2011, $880,222; 2010, $942,745)	994,913	1,071,676
Other invested assets	338,373	352,405
Total investments	15,955,923	14,297,867
Funds held - directly managed (cost: 2011, $1,362,997; 2010, $1,751,276)	1,379,513	1,772,118
Cash and cash equivalents, at fair value, which approximates amortized cost	1,606,842	2,111,084
Accrued investment income	181,806	201,928
Reinsurance balances receivable	2,517,586	2,076,884
Reinsurance recoverable on paid and unpaid losses	489,415	382,878
Funds held by reinsured companies	846,466	937,032
Deferred acquisition costs	661,564	595,557
Deposit assets	233,187	256,702
Net tax assets	32,358	14,960
Goodwill	455,533	455,533
Intangible assets	154,194	178,715
Other assets	85,535	83,113
Total assets	24,599,922	23,364,371
Liabilities
Unpaid losses and loss expenses	12,016,271	10,666,604
Policy benefits for life and annuity contracts	1,726,180	1,750,410
Unearned premiums	2,067,996	1,599,139
Other reinsurance balances payable	554,386	491,194
Deposit liabilities	243,033	268,239
Net tax liabilities	325,285	316,325
Accounts payable, accrued expenses and other	213,738	244,552
Debt related to senior notes	750,000	750,000
Debt related to capital efficient notes	70,989	70,989
Total liabilities	17,967,878	16,157,452
Shareholders' Equity
Common shares (par value $1.00; issued: 2011, 84,569,310 shares; 2010, 84,033,089 shares)	84,569	84,033
Preferred shares (par value $1.00; issued and outstanding: 2011, 35,750,000 shares; 2010, 20,800,000 shares; aggregate liquidation value: 2011, $893,750; 2010, $520,000)	35,750	20,800
Additional paid-in capital	3,792,057	3,419,864
Accumulated other comprehensive income:
Currency translation adjustment	60,185	16,101
Other accumulated comprehensive loss (net of tax of: 2011, $5,838; 2010, $4,872)	(14,200)	(12,045)
Retained earnings	3,983,398	4,761,178
Common shares held in treasury, at cost (2011, 16,831,534 shares; 2010, 14,046,895 shares)	(1,309,715)	(1,083,012)
Total shareholders' equity	6,632,044	7,206,919
Total liabilities and shareholders' equity	$ 24,599,922	$ 23,364,371