| | Exhibit 99.1 |
| | |
| News Release | |
PartnerRe Ltd. Reports First Quarter 2007 Results
| · | First Quarter Net Income per share of $2.76; Operating Earnings per share of $2.71 |
| · | Annualized Net Income ROE of 19.7%; Annualized Operating ROE of 19.3% |
| · | Book Value of $58.45 per share, up 4% for the quarter, and 27% year over year |
PEMBROKE, Bermuda, April 23, 2007 -- PartnerRe Ltd. (NYSE:PRE) today reported net income of $169.3 million, or $2.76 per share on a fully diluted basis, for the first quarter of 2007. This net income includes net after-tax realized gains on investments of $2.7 million, or $0.05 per share. Net income for the first quarter of 2006, including net after-tax realized gains on investments of $50.9 million, or $0.89 per share, was $193.2 million, or $3.21 per share. Operating earnings for the first quarter of 2007 were $157.9 million, or $2.71 per share on a fully diluted basis. This compares to operating earnings of $133.7 million, or $2.32 per share, for the first quarter of 2006. Operating earnings exclude net after-tax realized investment gains and losses and are calculated after payment of preferred dividends. All references to per share amounts in the text of this press release are on a fully diluted basis.
Commenting on the first quarter 2007 results, PartnerRe President & Chief Executive Officer Patrick Thiele said, “PartnerRe continues to benefit from a solid, well-balanced book of business that generated a 19% annualized operating return on beginning shareholders’ equity, despite the impact of Winterstorm Kyrill, which resulted in losses to PartnerRe of approximately $44 million, net of reinstatement premiums. We continue to grow GAAP book value per share at a healthy pace, as is demonstrated by 4% growth in the first quarter and 27% growth year over year, to $58.45.”
Summary unaudited consolidated financial data for the period is set out below.
U.S.$ thousands (except per share amounts and ratios) | Three months ended March 31 |
| | 2007 | 2006 |
| Net Premiums Written | $1,270,573 | $1,344,604 |
| Net Premiums Earned | $842,042 | $832,821 |
| Non-Life Combined Ratio | 85.4% | 87.8% |
| Net Income | $169,266 | $193,243 |
| Net Income per share (a) | $2.76 | $3.21 |
| Operating Earnings (a) | $157,949 | $133,744 |
| Operating Earnings per share (a) | $2.71 | $2.32 |
| PartnerRe Ltd. | Telephone +1 441 292 0888 | |
Wellesley House, 5th Floor | Fax +1 441 292 6080 | |
| 90 Pitts Bay Road | www.partnerre.com | |
| Pembroke, Bermuda HM 08 | | |
| (a) | Net income per share is defined as net income available to common shareholders divided by the weighted average number of fully diluted shares outstanding for the period. Net income available to common shareholders is defined as net income less preferred dividends. Operating earnings is defined as net income available to common shareholders excluding after-tax net realized gains/losses on investments. Operating earnings per share is defined as operating earnings divided by the weighted average number of fully diluted shares outstanding for the period. |
Net premiums written for the first quarter 2007 were $1.3 billion, down 5.5% when compared with the first quarter of 2006. Total revenues for the quarter were $962.3 million, down 3% from the first quarter of 2006. Total revenues for the first quarter 2007 included $842.0 million of net premiums earned, which were relatively flat with the first quarter of 2006; net investment income of $119.0 million - an increase of 19% over the first quarter of 2006; and pre-tax net realized investment gains of $0.8 million - down from $55.1 million for the first quarter of 2006.
During the first quarter 2007, the Company repurchased 487,300 common shares at a total cost of approximately $33.8 million. The Company has 3.8 million common shares remaining under its current repurchase authorization.
Separately, the Company announced today that its Board of Directors declared a quarterly dividend of $0.43 per common share. The dividend will be payable on June 1, 2007, to common shareholders of record on May 22, 2007, with the stock trading ex-dividend commencing May 18, 2007.
Results by Segment
The Non-Life segment reported net premiums written of $1.1 billion for the quarter, down 6% as compared to the same period in 2006. The decrease in net premiums written was observed in all Non-Life sub-segments and generally reflects the effect of competitive market conditions and a shrinking reinsurance market, where clients are retaining more of their business. The combined ratio was 85.4% for the first quarter of 2007 compared to 87.8% for the same period in 2006. The Non-Life technical result was $153 million for the first quarter of 2007 compared to $134 million for the prior year period. During the first quarter 2007, the Non-Life segment results were impacted by Winterstorm Kyrill, which resulted in losses to the Company of $44 million, net of reinstatement premiums, including $13 million to the Global (Non-U.S.) P&C sub-segment, and $31 million to the Worldwide Specialty sub-segment. The 2006 first quarter had unusually low large loss activity.
The U.S. Property and Casualty business, which represented 20% of total net premiums written for the quarter, reported net premiums written of $260 million for the first quarter of 2007, down 12% from the prior year’s first quarter. The decline in net premiums written relates to the timing of recognition of premiums for different contract structures as well as prior year adjustments. Excluding these factors, net premiums written would have increased approximately 2% year over year. Net premiums earned were also affected by prior year adjustments and were down 2% to $195 million in the first quarter of 2007 when compared with the same period in 2006. The technical ratio for this sub-segment was 93.1% for the 2007 first quarter, compared to 97.6% in the first quarter of 2006.
The Global (Non-U.S.) Property and Casualty business, which represented 26% of total net premiums written for the quarter, reported net premiums written of $332 million for the first quarter of 2007, down 9% when compared to the same period in 2006. Net premiums earned during the quarter were $177 million, down from $183 million in the first quarter 2006. The technical ratio for this sub-segment was 92.7% for the first quarter of 2007 compared to 102.2% for the same period in 2006.
The Worldwide Specialty business, which represented 41% of total net premiums written for the quarter, reported net premiums written of $520 million for the first quarter of 2007, down 1% from the first quarter of 2006. Net premiums earned were up 3% to $334 million for the quarter, compared to the same period in 2006. This sub-segment’s technical ratio was 62.1% for the first quarter of 2007 compared to 58.8% for the first quarter of 2006.
The Life segment, which represented 12% of total net premiums written for the quarter, reported net premiums written of $148 million for the quarter, representing 6% growth over the first quarter of 2006. The allocated underwriting result was $7 million, compared to $3 million for the first quarter of 2006.
The ART (Alternative Risk Transfer) segment comprises structured risk transfer, principal finance, weather related products, and strategic investments. The pre-tax contribution to net income, including the Company’s interest in the earnings of Channel Re, was $6 million for the first quarter of 2007, compared to $8 million in the first quarter of 2006.
Balance Sheet Items
During the first quarter of 2007, total investments and cash increased 3% or $281 million to $11.0 billion, and increased 11% over a trailing 12 month period, due primarily to incremental cash flow. Gross Non-Life loss and loss expense reserves were $6.9 billion, representing an increase of 1% or $55 million during the quarter, and an increase of 2% from
March 31, 2006. During the first quarter, the Company’s estimate of Non-Life losses for prior accident years developed favorably by $122 million, which is reflected in the quarter’s operating results. The overall prior year reserve development in the Non-Life segment includes net favorable reserve development of $4 million in the U.S. P&C sub-segment, $40 million in the Global (Non-U.S.) P&C sub-segment, and $78 million in the Worldwide Specialty sub-segment. During the first quarter of 2006, the Company’s estimate of Non-Life losses for prior year reserves developed favorably by $68 million.
At March 31, 2007, total assets were $15.7 billion, total capital was $4.8 billion, and total shareholders’ equity was $3.9 billion. This compares to total assets of $14.9 billion, total capital of $4.7 billion and total shareholders’ equity of $3.8 billion at December 31, 2006. Book value per common share at March 31, 2007 was $58.45 on a fully diluted basis, up 4% from $56.07 per share at December 31, 2006, and 27% from $46.15 per share at March 31, 2006.
Commentary and Outlook
“Our results this quarter are consistent with the current state of the reinsurance market and with our underwriting approach,” Mr. Thiele said. “Today, we are experiencing a more competitive environment as cedants retain a greater proportion of their business. However, the resultant price declines are being offset by benign loss trends, leading to expected profitability on our current business that is above our long-term goals.
“Within that context, we are well-positioned to achieve or exceed our long-term targets for operating return on equity and growth in book value per share in 2007.”
_________________________________________
The Company uses operating earnings, diluted operating earnings per share and operating return on beginning common shareholders’ equity to measure performance, as these measures focus on the underlying fundamentals of our operations without the influence of realized gains and losses from the sale of investments, which is driven by the timing of the disposition of investments and not by the Company’s operating performance. The Company uses technical ratio and technical result as measures of underwriting performance. The technical ratio is defined as the sum of the loss and acquisition ratios. These metrics exclude other operating expenses. The Company also uses combined ratio to measure results for the Non-Life segment. The combined ratio is the sum of the technical and other operating expense ratios. The Company uses total capital, which is defined as total shareholders’
equity, long-term debt and capital efficient notes, to manage the capital structure of the Company.
_____________________________________________
PartnerRe is a leading global reinsurer, providing multi-line reinsurance to insurance companies. The Company through its wholly owned subsidiaries also offers alternative risk products that include weather and credit protection to financial, industrial and service companies. Risks reinsured include property, casualty, motor, agriculture, aviation/space, catastrophe, credit/surety, engineering, energy, marine, specialty property, specialty casualty, other lines, life/annuity and health, and alternative risk products. For the year ended December 31, 2006, total revenues were $4.2 billion. At March 31, 2007, total assets were $15.7 billion, total capital was $4.8 billion and total shareholders’ equity was $3.9 billion.
PartnerRe on the Internet: www.partnerre.com
Forward-looking statements contained in this press release are based on the Company’s assumptions and expectations concerning future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. PartnerRe’s forward-looking statements could be affected by numerous foreseeable and unforeseeable events and developments such as exposure to catastrophe, or other large property and casualty losses, adequacy of reserves, risks associated with implementing business strategies, levels and pricing of new and renewal business achieved, credit, interest, currency and other risks associated with the Company’s investment portfolio, changes in accounting policies, and other factors identified in the Company’s filings with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking information contained herein, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. The Company disclaims any obligation to publicly update or revise any forward-looking information or statements.
Contacts: | PartnerRe Ltd. | Sard Verbinnen & Co. |
| | (441) 292-0888 | (212) 687-8080 |
| | Investor Contact: Robin Sidders | Drew Brown/Hallie Bozzi |
| | Media Contact: Celia Powell | |
PartnerRe Ltd. |
Consolidated Statements of Operations and Comprehensive Income |
| (Expressed in thousands of U.S dollars, except share and per share data) |
| (Unaudited) |
| | | For the three | | For the three | |
| | months ended | | months ended | |
| | March 31, | | March 31, | |
| | 2007 | | 2006 | |
| | | | | | |
| Revenues | | | | | |
| Gross premiums written | | $ | 1,301,763 | | $ | 1,372,846 | |
| | | | | | | | |
| Net premiums written | | $ | 1,270,573 | | $ | 1,344,604 | |
| Increase in unearned premiums | | | (428,531 | ) | | (511,783 | ) |
| Net premiums earned | | | 842,042 | | | 832,821 | |
| Net investment income | | | 119,017 | | | 99,952 | |
| Net realized investment gains | | | 768 | | | 55,098 | |
| Other income | | | 517 | | | 7,756 | |
Total revenues | | | 962,344 | | | 995,627 | |
| | | | | | | | |
Expenses | | | | | | | |
| Losses and loss expenses and life policy benefits | | | 478,734 | | | 498,817 | |
| Acquisition costs | | | 200,724 | | | 199,257 | |
| Other operating expenses | | | 78,985 | | | 74,430 | |
| Interest expense | | | 13,510 | | | 12,721 | |
| Net foreign exchange losses | | | 4,246 | | | 3,348 | |
Total expenses | | | 776,199 | | | 788,573 | |
| | | | | | | | |
Income before taxes and interest in earnings of equity investments | | | 186,145 | | | 207,054 | |
| Income tax expense | | | 19,904 | | | 16,130 | |
| Interest in earnings of equity investments | | | 3,025 | | | 2,319 | |
Net income | | $ | 169,266 | | $ | 193,243 | |
| | | | | | | | |
Preferred dividends | | $ | 8,631 | | $ | 8,631 | |
| | | | | | | | |
Operating earnings available to common shareholders | | $ | 157,949 | | $ | 133,744 | |
| | | | | | | | |
Comprehensive income, net of tax | | $ | 184,910 | | $ | 110,918 | |
| | | | | | | | |
Per Share Data: | | | | | | | |
| Earnings per common share: | | | | | | | |
| Basic operating earnings | | $ | 2.77 | | $ | 2.36 | |
| Net realized investment gains, net of tax | | | 0.05 | | | 0.89 | |
| Basic net income | | $ | 2.82 | | $ | 3.25 | |
| | | | | | | | |
| Weighted average number of common shares outstanding | | | 56,960.3 | | | 56,733.5 | |
| | | | | | | | |
| | | | | | | | |
| Diluted operating earnings | | $ | 2.71 | | $ | 2.32 | |
| Net realized investment gains, net of tax | | | 0.05 | | | 0.89 | |
| Diluted net income | | $ | 2.76 | | $ | 3.21 | |
| Weighted average number of common and | | | | | | | |
| common share equivalents outstanding | | | 58,200.2 | | | 57,601.0 | |
PartnerRe Ltd. |
Consolidated Balance Sheets |
| (Expressed in thousands of U.S dollars, except share, per share and parenthetical share data) |
| (Unaudited) |
| | | March 31, | | December 31, | |
| | | 2007 | | 2006 | |
| | | | | | |
Assets | | | | | |
Investments: | | | | | | | |
| Fixed maturities, at fair value | | | | | | | |
| (amortized cost: 2007, $8,126,763; 2006, $7,852,798) | | $ | 8,117,001 | | $ | 7,835,680 | |
| Short-term investments, at fair value | | | | | | | |
| (amortized cost: 2007, $81,548; 2006, $133,872) | | | 81,469 | | | 133,751 | |
| Equities, at fair value | | | | | | | |
| (cost: 2007, $1,245,556; 2006, $920,913) | | | 1,340,205 | | | 1,015,144 | |
| Trading securities, at fair value (cost: 2007, $190,145; 2006, $578,445) | | | 196,564 | | | 599,972 | |
| Other invested assets | | | 125,162 | | | 105,390 | |
Total investments | | | 9,860,401 | | | 9,689,937 | |
| Cash and cash equivalents, at fair value, which approximates amortized cost | | | 1,099,323 | | | 988,788 | |
| Accrued investment income | | | 169,387 | | | 157,923 | |
| Reinsurance balances receivable | | | 1,995,587 | | | 1,573,566 | |
| Reinsurance recoverable on paid and unpaid losses | | | 175,999 | | | 168,840 | |
| Funds held by reinsured companies | | | 981,927 | | | 1,002,402 | |
| Deferred acquisition costs | | | 617,710 | | | 542,698 | |
| Deposit assets | | | 337,986 | | | 306,212 | |
| Net tax assets | | | 8,419 | | | 17,826 | |
| Goodwill | | | 429,519 | | | 429,519 | |
| Other assets | | | 69,286 | | | 70,514 | |
Total assets | | $ | 15,745,544 | | $ | 14,948,225 | |
| | | | | | | | |
Liabilities | | | | | | | |
| Unpaid losses and loss expenses | | $ | 6,926,221 | | $ | 6,870,785 | |
| Policy benefits for life and annuity contracts | | | 1,500,249 | | | 1,430,691 | |
| Unearned premiums | | | 1,675,348 | | | 1,215,624 | |
| Reinsurance balances payable | | | 122,808 | | | 115,897 | |
| Ceded premiums payable | | | 23,309 | | | 17,213 | |
| Funds held under reinsurance treaties | | | 21,427 | | | 21,257 | |
| Deposit liabilities | | | 386,125 | | | 350,763 | |
| Net payable for securities purchased | | | 126,778 | | | 90,331 | |
| Accounts payable, accrued expenses and other | | | 178,730 | | | 172,212 | |
| Long-term debt | | | 620,000 | | | 620,000 | |
| Debt related to capital efficient notes | | | 257,605 | | | 257,605 | |
Total liabilities | | | 11,838,600 | | | 11,162,378 | |
| | | | | | | | |
Shareholders’ Equity | | | | | | | |
| Common shares (par value $1.00, issued and outstanding: | | | | | | | |
| 2007, 56,704,414; 2006, 57,076,312) | | | 56,704 | | | 57,076 | |
| Series C cumulative preferred shares (par value $1.00, issued and outstanding: | | | | | | | |
| 2007 and 2006, 11,600,000; aggregate liquidation preference: 2007 and 2006, $290,000,000) | | | 11,600 | | | 11,600 | |
| Series D cumulative preferred shares (par value $1.00, issued and outstanding: | | | | | | | |
| 2007 and 2006, 9,200,000; aggregate liquidation preference: 2007 and 2006, $230,000,000) | | | 9,200 | | | 9,200 | |
| Additional paid-in capital | | | 1,392,449 | | | 1,413,977 | |
| Accumulated other comprehensive income: | | | | | | | |
| Net unrealized gains on investments, net of tax | | | 63,674 | | | 56,913 | |
| Currency translation adjustment | | | 77,636 | | | 68,734 | |
| Unfunded pension obligation, net of tax | | | (7,296 | ) | | (7,277 | ) |
| Retained earnings | | | 2,302,977 | | | 2,175,624 | |
Total shareholders' equity | | | 3,906,944 | | | 3,785,847 | |
| | | | | | | | |
Total liabilities and shareholders' equity | | $ | 15,745,544 | | $ | 14,948,225 | |
| | | | | | | | |
Shareholders’ Equity Per Common Share (excluding cumulative | | $ | 59.73 | | $ | 57.22 | |
preferred shares: 2007 and 2006, $520,000,000) | | | | | | | |
Diluted Book Value Per Common and Common Share Equivalents | | | | | | | |
Outstanding (assuming exercise of all stock-based awards) | | $ | 58.45 | | $ | 56.07 | |
| | | | | | | | |
Number of Common and Common Share Equivalents Outstanding | | | 57,944.3 | | | 58,248.8 | |
PartnerRe Ltd. |
Supplementary Information |
(in millions of U.S. dollars) |
| (Unaudited) |
| |
SEGMENT INFORMATION |
For the three months ended March 31, 2007 |
| | | U.S. P&C | | Global (Non-U.S.) P&C | | Worldwide Specialty | | Total
Non- Life
Segment | | ART
Segment (A) | | Life
Segment | | Corporate | | Total | |
| | | | | | | | | | | | | | | | | | |
| Gross premiums written | | $ | 260 | | $ | 332 | | $ | 542 | | $ | 1,134 | | $ | 11 | | $ | 157 | | $ | - | | $ | 1,302 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net premiums written | | $ | 260 | | $ | 332 | | $ | 520 | | $ | 1,112 | | $ | 11 | | $ | 148 | | $ | - | | $ | 1,271 | |
| Increase in unearned premiums | | | (65 | ) | | (155 | ) | | (186 | ) | | (406 | ) | | (5 | ) | | (18 | ) | | - | | | (429 | ) |
| Net premiums earned | | $ | 195 | | $ | 177 | | $ | 334 | | $ | 706 | | $ | 6 | | $ | 130 | | $ | - | | $ | 842 | |
| Losses and loss expenses and | | | | | | | | | | | | | | | | | | | | | | | | | |
| life policy benefits | | | (131 | ) | | (118 | ) | | (135 | ) | | (384 | ) | | 1 | | | (96 | ) | | - | | | (479 | ) |
| Acquisition costs | | | (51 | ) | | (46 | ) | | (72 | ) | | (169 | ) | | (1 | ) | | (31 | ) | | - | | | (201 | ) |
Technical result | | $ | 13 | | $ | 13 | | $ | 127 | | $ | 153 | | $ | 6 | | $ | 3 | | $ | - | | $ | 162 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other income | | | n/a | | | n/a | | | n/a | | | - | | | 1 | | | - | | | - | | | 1 | |
| Other operating expenses | | | n/a | | | n/a | | | n/a | | | (50 | ) | | (4 | ) | | (7 | ) | | (18 | ) | | (79 | ) |
Underwriting result | | | n/a | | | n/a | | | n/a | | $ | 103 | | $ | 3 | | $ | (4 | ) | | n/a | | $ | 84 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | n/a | | | n/a | | | n/a | | | n/a | | | - | | | 11 | | | 108 | | | 119 | |
Allocated underwriting result (1) | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | $ | 7 | | | n/a | | | n/a | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net realized investment gains | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | 1 | | | 1 | |
| Interest expense | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | (14 | ) | | (14 | ) |
| Net foreign exchange losses | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | (4 | ) | | (4 | ) |
| Income tax expense | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | (20 | ) | | (20 | ) |
| Interest in earnings of equity investments | | | n/a | | | n/a | | | n/a | | | n/a | | | 3 | | | n/a | | | n/a | | | 3 | |
Net income | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | $ | 169 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Loss ratio (2) | | | 67.2 | % | | 66.8 | % | | 40.3 | % | | 54.4 | % | | | | | | | | | | | | |
Acquisition ratio (3) | | | 25.9 | | | 25.9 | | | 21.8 | | | 23.9 | | | | | | | | | | | | | |
Technical ratio (4) | | | 93.1 | % | | 92.7 | % | | 62.1 | % | | 78.3 | % | | | | | | | | | | | | |
Other operating expense ratio (5) | | | | | | | | | | | | 7.1 | | | | | | | | | | | | | |
Combined ratio (6) | | | | | | | | | | | | 85.4 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
For the three months ended March 31, 2006 |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | U.S. P&C | | | Global (Non-U.S.) P&C | | | Worldwide Specialty | | | Total
Non-Life
Segment | | | | | | Life
Segment | | | Corporate | | | Total | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Gross premiums written | | $ | 296 | | $ | 365 | | $ | 549 | | $ | 1,210 | | $ | 19 | | $ | 144 | | $ | - | | $ | 1,373 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net premiums written | | $ | 296 | | $ | 364 | | $ | 527 | | $ | 1,187 | | $ | 19 | | $ | 139 | | $ | - | | $ | 1,345 | |
| Increase in unearned premiums | | | (96 | ) | | (181 | ) | | (204 | ) | | (481 | ) | | (12 | ) | | (19 | ) | | - | | | (512 | ) |
| Net premiums earned | | $ | 200 | | $ | 183 | | $ | 323 | | $ | 706 | | $ | 7 | | $ | 120 | | $ | - | | $ | 833 | |
| Losses and loss expenses and | | | | | | | | | | | | | | | | | | | | | | | | | |
| life policy benefits | | | (144 | ) | | (137 | ) | | (127 | ) | | (408 | ) | | (4 | ) | | (87 | ) | | - | | | (499 | ) |
| Acquisition costs | | | (51 | ) | | (50 | ) | | (63 | ) | | (164 | ) | | (1 | ) | | (34 | ) | | - | | | (199 | ) |
Technical result | | $ | 5 | | $ | (4 | ) | $ | 133 | | $ | 134 | | $ | 2 | | $ | (1 | ) | $ | - | | $ | 135 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Other income | | | n/a | | | n/a | | | n/a | | | - | | | 8 | | | - | | | - | | | 8 | |
| Other operating expenses | | | n/a | | | n/a | | | n/a | | | (48 | ) | | (4 | ) | | (7 | ) | | (16 | ) | | (75 | ) |
Underwriting result | | | n/a | | | n/a | | | n/a | | $ | 86 | | $ | 6 | | $ | (8 | ) | | n/a | | $ | 68 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | n/a | | | n/a | | | n/a | | | n/a | | | - | | | 11 | | | 89 | | | 100 | |
Allocated underwriting result (1) | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | $ | 3 | | | n/a | | | n/a | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net realized investment gains | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | 55 | | | 55 | |
| Interest expense | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | (13 | ) | | (13 | ) |
| Net foreign exchange losses | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | (3 | ) | | (3 | ) |
| Income tax expense | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | (16 | ) | | (16 | ) |
| Interest in earnings of equity investments | | | n/a | | | n/a | | | n/a | | | n/a | | | 2 | | | n/a | | | n/a | | | 2 | |
Net income | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | $ | 193 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Loss ratio (2) | | | 71.8 | % | | 75.0 | % | | 39.2 | % | | 57.7 | % | | | | | | | | | | | | |
Acquisition ratio (3) | | | 25.8 | | | 27.2 | | | 19.6 | | | 23.4 | | | | | | | | | | | | | |
Technical ratio (4) | | | 97.6 | % | | 102.2 | % | | 58.8 | % | | 81.1 | % | | | | | | | | | | | | |
Other operating expense ratio (5) | | | | | | | | | | | | 6.7 | | | | | | | | | | | | | |
Combined ratio (6) | | | | | | | | | | | | 87.8 | % | | | | | | | | | | | | |
(A) The Company reports the results of Channel Re on a one-quarter lag. The 2007 and 2006 periods include the Company's share of Channel Re's net income in the amount of $3.0 million and $2.2 million, respectively. |
|
(1) Allocated underwriting result is defined as net premiums earned and allocated net investment income less life policy benefits, acquisition costs and other operating expenses. |
(2) Loss ratio is obtained by dividing losses and loss expenses by net premiums earned. |
(3) Acquisition ratio is obtained by dividing acquisition costs by net premiums earned. |
(4) Technical ratio is defined as the sum of the loss ratio and the acquisition ratio. |
(5) Other operating expense ratio is obtained by dividing other operating expenses by net premiums earned. |
(6) Combined ratio is defined as the sum of the technical ratio and the other operating expense ratio. |
PartnerRe Ltd.
Supplementary Information
(Unaudited)
| | | For the three | | For the three | |
| | | months ended | | months ended | |
| | | March 31, | | March 31, | |
| | | 2007 | | 2006 | |
| | | | | | |
Distribution of Net Premiums Written by | | | | | | | |
Line of Business: | | | | | | | |
| Non-Life | | | | | | | |
| Property and Casualty | | | | | | | |
| Property | | | 22 | % | | 22 | % |
| Casualty | | | 17 | | | 19 | |
| Motor | | | 7 | | | 8 | |
| Worldwide Specialty | | | | | | | |
| Agriculture | | | 2 | | | 3 | |
| Aviation/Space | | | 2 | | | 3 | |
| Catastrophe | | | 17 | | | 16 | |
| Credit/Surety | | | 5 | | | 4 | |
| Engineering | | | 3 | | | 3 | |
| Energy | | | 1 | | | 1 | |
| Marine | | | 3 | | | 3 | |
| Specialty property | | | 4 | | | 3 | |
| Specialty casualty | | | 4 | | | 4 | |
| ART | | | 1 | | | 1 | |
| Life | | | 12 | | | 10 | |
| | | | 100 | % | | 100 | % |
| | | | | | | | |
Distribution of Gross Premiums Written by | | | | | | | |
Geography: | | | | | | | |
| Europe | | | 50 | % | | 49 | % |
| North America | | | 38 | | | 39 | |
| Asia, Australia and New Zealand | | | 6 | | | 7 | |
| Latin America, Caribbean and Africa | | | 6 | | | 5 | |
| | | | 100 | % | | 100 | % |
| | | | | | | | |
| | | | | | | | |
| | | | As at | | | | |
| | | March 31, | | | | |
| | | | 2007 | | | | |
| | | | | | | | |
Financial Strength Ratings: | | | | | | | |
| Standard & Poor's | | | AA- | | | | |
| Moody's | | | Aa3 | | | | |
| A.M. Best | | | A+ | | | | |
| Fitch | | | AA | | | | |
| | | As at | | As at |
| | | March 31, | | December 31, |
| | | 2007 | | 2006 |
| | | (in thousands of U.S. dollars) | | (in thousands of U.S. dollars) |
Capital Structure: | | | | | | | | | | | | | |
| Long-term debt | | $ | 620,000 | | | 13 | % | $ | 620,000 | | | 13 | % |
Capital efficient notes(1) | | | 250,000 | | | 5 | | | 250,000 | | | 6 | |
| 6.75% Series C cumulative preferred shares, aggregate liquidation | | | 290,000 | | | 6 | | | 290,000 | | | 6 | |
| 6.5% Series D cumulative preferred shares, aggregate liquidation | | | 230,000 | | | 5 | | | 230,000 | | | 5 | |
| Common shareholders' equity | | | 3,386,944 | | | 71 | | | 3,265,847 | | | 70 | |
| Total Capital | | $ | 4,776,944 | | | 100 | % | $ | 4,655,847 | | | 100 | % |
(1) PartnerRe Finance II, the issuer of the capital efficient notes, does not meet the consolidation requirements of FIN 46(R).
Accordingly, the Company shows the related intercompany debt of $257.6 million on its Consolidated Balance Sheets.
PartnerRe Ltd.
Supplementary Information
(Unaudited)
| | | | | As at | | | | As at | | | |
| | | | | March 31, | | | | December 31, | | | |
| | | | | 2007 | | | | 2006 | | | |
| | | | | | | | | | | | |
Investment Portfolio: | | | | | | | | | | | |
Credit Quality AAA | | | | | | 70 | % | | | | | 69 | % | | | |
| AA | | | | | | 5 | | | | | | 4 | | | | |
| A | | | | | | 11 | | | | | | 13 | | | | |
| BBB | | | | | | 10 | | | | | | 10 | | | | |
| Below Investment Grade/Unrated | | | | | | 4 | | | | | | 4 | | | | |
| | | | | | | 100 | % | | | | | 100 | % | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
By Class U.S. Government | | | | | | 14 | % | | | | | 12 | % | | | |
| U.S. Mortgage/Asset Backed | | | | | | 17 | | | | | | 16 | | | | |
| U.S. Corporates | | | | | | 19 | | | | | | 20 | | | | |
| Foreign Fixed Income | | | | | | 29 | | | | | | 29 | | | | |
| Equities and Equity Substitutes | | | | | | 13 | | | | | | 14 | | | | |
| Cash (net of pending transactions) | | | | | | 8 | | | | | | 9 | | | | |
| | | | | | | 100 | % | | | | | 100 | % | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Expected average duration | | | | | | 4.1 | | Yrs | | | 4.1 | | Yrs | |
| | | | | | | | | | | | | | | | | |
| Average yield to maturity at market | | | | | | 4.9 | % | | | | | 4.9 | % | | | |
| (fixed income securities and cash) | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Average Credit Quality | | | | | | AA | | | | | | AA | | | | |
| | | For the three | | | | For the three | |
| | | months ended | | | | months ended | |
| | | March 31, | | | | March 31, | |
| | | 2007 | | | | 2006 | |
| | | (in thousands of U.S. dollars except per share data) |
| | | | | | | | |
Reconciliation of GAAP and non-GAAP measures: | | | | | | | |
| | | | | | | | |
Annualized return on beginning common shareholders' equity (1) | | | | | | | | | | |
| calculated with net income available to common shareholders | | | 19.7 | % | | | | | 28.7 | % |
| Less: | | | | | | | | | | |
| Annualized net realized investment gains return, net of tax, on beginning | | | | | | | | | | |
common shareholders' equity (1) | | | 0.4 | | | | | | 7.9 | |
| | | | | | | | | | | |
Annualized operating return on beginning common shareholders' equity(1) | | | 19.3 | % | | | | | 20.8 | % |
| | | | | | | | | | | |
| Net income | | $ | 169,266 | | | | | $ | 193,243 | |
| Less: | | | | | | | | | | |
| Net realized investment gains, net of tax | | | 2,686 | | | | | | 50,868 | |
| Dividends to preferred shareholders | | | 8,631 | | | | | | 8,631 | |
| Operating earnings available to common shareholders | | $ | 157,949 | | | | | $ | 133,744 | |
| | | | | | | | | | | |
| Per diluted share: | | | | | | | | | | |
| Net income | | $ | 2.76 | | | | | $ | 3.21 | |
| Less: | | | | | | | | | | |
| Net realized investment gains, net of tax | | | 0.05 | | | | | | 0.89 | |
| Operating earnings | | $ | 2.71 | | | | | $ | 2.32 | |
(1) Excluding cumulative preferred shares: 2007 and 2006, $520,000
PartnerRe Ltd.
Supplementary Information
(in thousands of U.S. dollars except share and per share data)
(Unaudited)
| | | As at | | As at | |
| | | March 31, | | December 31, | |
| | | 2007 | | 2006 | |
| | | | | | |
Reconciliation of GAAP and non-GAAP measures: | | | | | |
| | | | | | |
| Shareholders' equity | | $ | 3,906,944 | | $ | 3,785,847 | |
| Less: | | | | | | | |
| 6.75% Series C cumulative preferred shares, aggregate liquidation | | | 290,000 | | | 290,000 | |
| 6.5% Series D cumulative preferred shares, aggregate liquidation | | | 230,000 | | | 230,000 | |
| | | | | | | | |
| Common shareholders' equity | | $ | 3,386,944 | | $ | 3,265,847 | |
| | | | | | | | |
| Less: | | | | | | | |
| Net unrealized losses on fixed income securities, net of tax | | | (12,632 | ) | | (18,694 | ) |
| | | | | | | | |
| | | | | | | | |
| Book value excluding net unrealized losses on fixed income securities | | $ | 3,399,576 | | $ | 3,284,541 | |
| | | | | | | | |
| Divided by: | | | | | | | |
| Number of common and common share equivalents outstanding | | | 57,944.3 | | | 58,248.8 | |
| | | | | | | | |
| Equals: | | | | | | | |
| Diluted book value per common and common share equivalents | | | | | | | |
| outstanding excluding net unrealized losses on fixed income securities | | $ | 58.67 | | $ | 56.39 | |
11
