Exhibit 99.2
![](https://capedge.com/proxy/8-K/0000950103-08-001977/logo.jpg)
PartnerRe Ltd.
Financial Supplement
Financial Information
as of June 30, 2008
(unaudited)
The following financial supplement is provided to assist in your understanding of PartnerRe Ltd.
This report is for information purposes only. It should be read in conjunction with documents filed with the SEC by PartnerRe Ltd., including the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
PartnerRe Ltd.
Financial Supplement - June 30, 2008
Table of Contents
Page | |
Regulation G | |
Consolidated Financial Statements | |
Consolidated Income Statements | 1-2 |
Condensed Consolidated Balance Sheets | 3 |
Condensed Consolidated Statements of Cash Flows | 4-5 |
Consolidated Statements of Comprehensive Income | 6 |
Segment Information | |
For the three months ended June 30, 2008 and 2007 | 7-8 |
For the six months ended June 30, 2008 and 2007 | 9-10 |
Non-Life segment | 11-12 |
U.S. sub-segment | 13-14 |
Global (Non-U.S.) P&C sub-segment | 15-16 |
Global (Non-U.S.) Specialty sub-segment | 17-18 |
Catastrophe sub-segment | 19-20 |
Life segment | 21-22 |
Corporate and Other | 23-24 |
Distribution of Premiums | |
Distribution of Premiums by line of business, geography and production source | 25-26 |
Distribution of Premiums by treaty type | 27-28 |
Investments | |
Investment Portfolio | 29 |
Distribution of Corporate Bonds and Equities | 30 |
Distribution of Mortgage/Asset-Backed Securities and Private Market Investments | 31 |
Composition of Net Investment Income and Net Realized and Unrealized Investment Gains (Losses) | 32-33 |
Loss Reserves | |
Analysis of Unpaid Losses and Loss Expenses | 34 |
Analysis of Policy Benefits for Life and Annuity Contracts | 35 |
Reserve Development | 36 |
Reconciliation of GAAP and non-GAAP measures | 37-39 |
Diluted Book Value per Common Share - Treasury Stock Method | 40 |
Diluted Book Value per Common Share - Rollforward | 41-42 |
PartnerRe Ltd.
Regulation G
In addition to the GAAP financial measures set forth in this Financial Supplement, the Company has also included certain 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 quarters and for comparison with other companies within the industry. However, 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.
The reconciliation of non-GAAP financial measures to the most comparable GAAP financial measures in accordance with Regulation G is included within the relevant tables.
Operating Earnings available to Common Shareholders (Operating Earnings), Diluted Operating Earnings per Common Share and Annualized Operating Return on Beginning Common Shareholders’ Equity (Annualized Operating ROE) (non-GAAP financial measures): The Company uses Operating Earnings, Diluted Operating Earnings per Common Share and Annualized Operating ROE to measure performance, as these measures focus on the underlying fundamentals of the Company’s operations. Operating Earnings exclude the impact of net realized and unrealized gains and losses on investments, net of tax, and the interest in earnings (losses) of equity investments, net of tax, where the Company does not control the investee companies’ activities, and are calculated after preferred dividends. The Company calculates Diluted Operating Earnings per Common Share using Operating Earnings for the period divided by the weighted average number of common and common share equivalents outstanding. The Company calculates Annualized Operating ROE using annualized Operating Earnings for the period divided by the common shareholders’ equity as of the beginning of the period. Operating Earnings and Diluted Operating Earnings per Common Share should not be viewed as a substitute for Net Income or Diluted Net Income per Common Share prepared in accordance with GAAP. Annualized Operating ROE supplements GAAP information.
Book Value excluding Net Unrealized Gains and Losses on Fixed Income Securities, Net of Tax (Book Value excluding NURGL) and Diluted Book Value per Common and Common Share Equivalents Outstanding excluding Net Unrealized Gains and Losses on Fixed Income Securities, Net of Tax (Diluted Book Value excluding NURGL) (non-GAAP financial measure): The Company calculates Book Value excluding NURGL using common shareholders’ equity less net unrealized gains and losses on fixed income securities, net of tax. Book Value excluding NURGL focuses on the underlying fundamentals of the Company’s financial position without the impact of interest rates on the unrealized gains and losses on investments (net of tax). The Company calculates Diluted Book Value excluding NURGL using Book Value excluding NURGL divided by the weighted average number of common and common share equivalents outstanding.
Total Capital (non-GAAP financial measure): The Company calculates total capital as the sum of total shareholders’ equity, long-term debt, capital efficient notes and senior notes. The Company uses Total Capital a a measure to manage the capital structure of the Company.
PartnerRe Ltd. | ||||||||||
Consolidated Income Statements | ||||||||||
(Expressed in thousands of U.S. dollars or shares, except per share data) | ||||||||||
(Unaudited) | ||||||||||
For the three months ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||
Revenues | ||||||||||||||||||||
Gross premiums written | $ | 968,163 | $ | 1,439,332 | $ | 722,700 | $ | 877,943 | $ | 907,758 | ||||||||||
Net premiums written | $ | 956,269 | $ | 1,411,564 | $ | 714,376 | $ | 873,474 | $ | 898,686 | ||||||||||
(Increase) decrease in unearned premiums | (730 | ) | (501,811 | ) | 275,382 | 182,921 | (9,409 | ) | ||||||||||||
Net premiums earned | 955,539 | 909,753 | 989,758 | 1,056,395 | 889,277 | |||||||||||||||
Net investment income | 145,494 | 137,010 | 137,771 | 135,577 | 130,894 | |||||||||||||||
Net realized and unrealized investment (losses) gains (1) | (296,255 | ) | 25,112 | (16,510 | ) | (3,103 | ) | (53,647 | ) | |||||||||||
Other income (loss) | 4,591 | 1,639 | (14,530 | ) | 5,445 | (8,911 | ) | |||||||||||||
Total revenues | 809,369 | 1,073,514 | 1,096,489 | 1,194,314 | 957,613 | |||||||||||||||
Expenses | ||||||||||||||||||||
Losses and loss expenses and life policy benefits | 548,720 | 589,668 | 517,557 | 562,132 | 524,038 | |||||||||||||||
Acquisition costs | 228,170 | 204,238 | 227,222 | 215,456 | 206,313 | |||||||||||||||
Other operating expenses | 96,737 | 92,280 | 88,481 | 79,073 | 79,947 | |||||||||||||||
Interest expense | 14,914 | 11,896 | 13,374 | 13,649 | 13,484 | |||||||||||||||
Net foreign exchange (gains) losses | (1,574 | ) | 4,798 | (1,568 | ) | 3,567 | 9,308 | |||||||||||||
Total expenses | 886,967 | 902,880 | 845,066 | 873,877 | 833,090 | |||||||||||||||
(Loss) income before taxes and interest in (losses) earnings of equity investments | (77,598 | ) | 170,634 | 251,423 | 320,437 | 124,523 | ||||||||||||||
Income tax (benefit) expense | (53,423 | ) | 42,726 | 4,303 | 34,825 | 22,716 | ||||||||||||||
Interest in (losses) earnings of equity investments | (1,849 | ) | 1,112 | (66,517 | ) | (22,691 | ) | 3,214 | ||||||||||||
Net (loss) income | $ | (26,024 | ) | $ | 129,020 | $ | 180,603 | $ | 262,921 | $ | 105,021 | |||||||||
Preferred dividends | $ | 8,631 | $ | 8,631 | $ | 8,631 | $ | 8,631 | $ | 8,631 | ||||||||||
Operating earnings available to common shareholders | $ | 183,830 | $ | 110,211 | $ | 257,369 | $ | 274,198 | $ | 135,951 | ||||||||||
Comprehensive (loss) income, net of tax | $ | (15,302 | ) | $ | 190,197 | $ | 233,897 | $ | 387,271 | $ | 82,613 | |||||||||
Per Share Data: | ||||||||||||||||||||
(Loss) earnings per common share: | ||||||||||||||||||||
Basic operating earnings | $ | 3.39 | $ | 2.03 | $ | 4.69 | $ | 4.90 | $ | 2.40 | ||||||||||
Net realized and unrealized investment (losses) gains, net of tax (1) | (4.04 | ) | 0.17 | (0.35 | ) | 0.05 | (0.76 | ) | ||||||||||||
Interest in earnings (losses) of equity investments, net of tax | 0.01 | 0.02 | (1.21 | ) | (0.40 | ) | 0.06 | |||||||||||||
Basic net (loss) income | $ | (0.64 | ) | $ | 2.22 | $ | 3.13 | $ | 4.55 | $ | 1.70 | |||||||||
Weighted average number of common shares outstanding | 54,276.6 | 54,248.3 | 54,892.7 | 55,906.6 | 56,682.8 | |||||||||||||||
Diluted operating earnings | $ | 3.39 | $ | 1.98 | $ | 4.55 | $ | 4.78 | $ | 2.34 | ||||||||||
Net realized and unrealized investment (losses) gains, net of tax (1) | (4.04 | ) | 0.16 | (0.34 | ) | 0.05 | (0.74 | ) | ||||||||||||
Interest in earnings (losses) of equity investments, net of tax | 0.01 | 0.02 | (1.17 | ) | (0.39 | ) | 0.06 | |||||||||||||
Diluted net (loss) income | $ | (0.64 | ) | $ | 2.16 | $ | 3.04 | $ | 4.44 | $ | 1.66 | |||||||||
Weighted average number of common and common share equivalents outstanding | 54,276.6 | 55,711.2 | 56,578.5 | 57,329.2 | 58,148.7 |
(1) Following the adoption of SFAS 159 on January 1, 2008, net realized and unrealized investment losses include both realized and unrealized losses on investments. Prior to the adoption of SFAS 159, net realized and unrealized investment losses included realized losses on investments and other-than-temporary impairment charges.
1
PartnerRe Ltd. |
Consolidated Income Statements |
(Expressed in thousands of U.S dollars or shares, except per share data) |
(Unaudited) |
For the six months ended | For the year ended | |||||||||||||||
June 30, | June 30, | December 31, | December 31, | |||||||||||||
2008 | 2007 | 2007 | 2006 | |||||||||||||
Revenues | ||||||||||||||||
Gross premiums written | $ | 2,407,495 | $ | 2,209,521 | $ | 3,810,164 | $ | 3,733,920 | ||||||||
Net premiums written | $ | 2,367,833 | $ | 2,169,258 | $ | 3,757,109 | $ | 3,689,548 | ||||||||
(Increase) decrease in unearned premiums | (502,540 | ) | (437,940 | ) | 20,362 | (22,280 | ) | |||||||||
Net premiums earned | 1,865,293 | 1,731,318 | 3,777,471 | 3,667,268 | ||||||||||||
Net investment income | 282,504 | 249,911 | 523,259 | 449,401 | ||||||||||||
Net realized and unrealized investment (losses) gains (1) | (271,143 | ) | (52,879 | ) | (72,492 | ) | 47,160 | |||||||||
Other income (loss) | 6,228 | (8,393 | ) | (17,479 | ) | 23,555 | ||||||||||
Total revenues | 1,882,882 | 1,919,957 | 4,210,759 | 4,187,384 | ||||||||||||
Expenses | ||||||||||||||||
Losses and loss expenses and life policy benefits | 1,138,388 | 1,002,772 | 2,082,461 | 2,111,337 | ||||||||||||
Acquisition costs | 432,408 | 407,037 | 849,715 | 849,241 | ||||||||||||
Other operating expenses | 189,017 | 158,931 | 326,486 | 309,544 | ||||||||||||
Interest expense | 26,810 | 26,994 | 54,017 | 61,387 | ||||||||||||
Net foreign exchange losses | 3,223 | 13,554 | 15,552 | 23,204 | ||||||||||||
Total expenses | 1,789,846 | 1,609,288 | 3,328,231 | 3,354,713 | ||||||||||||
Income before taxes and interest in (losses) earnings of equity investments | 93,036 | 310,669 | 882,528 | 832,671 | ||||||||||||
Income tax (benefit) expense | (10,697 | ) | 42,620 | 81,748 | 95,305 | |||||||||||
Interest in (losses) earnings of equity investments | (737 | ) | 6,239 | (82,968 | ) | 11,966 | ||||||||||
Net income | $ | 102,996 | $ | 274,288 | $ | 717,812 | $ | 749,332 | ||||||||
Preferred dividends | $ | 17,263 | $ | 17,263 | $ | 34,525 | $ | 34,525 | ||||||||
Operating earnings available to common shareholders | $ | 294,041 | $ | 290,875 | $ | 822,442 | $ | 656,382 | ||||||||
Comprehensive income, net of tax | $ | 174,895 | $ | 267,524 | $ | 888,692 | $ | 784,898 | ||||||||
Per Share Data: | ||||||||||||||||
Earnings per common share: | ||||||||||||||||
Basic operating earnings | $ | 5.42 | $ | 5.12 | $ | 14.66 | $ | 11.55 | ||||||||
Net realized and unrealized investment (losses) gains, net of tax (1) | (3.87 | ) | (0.71 | ) | (1.00 | ) | 0.82 | |||||||||
Interest in earnings (losses) of equity investments, net of tax | 0.03 | 0.11 | (1.48 | ) | 0.21 | |||||||||||
Basic net income | $ | 1.58 | $ | 4.52 | $ | 12.18 | $ | 12.58 | ||||||||
Weighted average number of common shares outstanding | 54,262.5 | 56,820.8 | 56,104.4 | 56,822.5 | ||||||||||||
Diluted operating earnings | $ | 5.28 | $ | 5.00 | $ | 14.29 | $ | 11.36 | ||||||||
Net realized and unrealized investment (losses) gains, net of tax (1) | (3.77 | ) | (0.69 | ) | (0.98 | ) | 0.80 | |||||||||
Interest in earnings (losses) of equity investments, net of tax | 0.03 | 0.11 | (1.44 | ) | 0.21 | |||||||||||
Diluted net income | $ | 1.54 | $ | 4.42 | $ | 11.87 | $ | 12.37 | ||||||||
Weighted average number of common and common share equivalents outstanding | 55,685.6 | 58,173.7 | 57,557.9 | 57,802.8 |
(1) Following the adoption of SFAS 159 on January 1, 2008, net realized and unrealized investment losses include both realized and unrealized losses on investments. Prior to the adoption of SFAS 159, net realized and unrealized investment losses included realized losses on investments and other-than-temporary impairment charges.
2
PartnerRe Ltd. |
Condensed Consolidated Balance Sheets |
(Expressed in thousands of U.S dollars or shares, except per share data) |
(Unaudited) |
June 30, 2008 | March 31, 2008 | December 31, 2007 | September 30, 2007 | June 30, 2007 | December 31, 2006 | December 31, 2005 | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||
Total investments | $ | 11,561,358 | $ | 11,691,038 | $ | 10,917,341 | $ | 10,695,174 | $ | 9,890,107 | $ | 9,689,937 | $ | 8,577,360 | ||||||||||||||||
Cash and cash equivalents | 480,349 | 497,567 | 654,895 | 834,259 | 1,052,192 | 988,788 | 1,001,378 | |||||||||||||||||||||||
Accrued investment income | 201,234 | 179,611 | 176,386 | 147,399 | 170,541 | 157,923 | 143,548 | |||||||||||||||||||||||
Reinsurance balances receivable | 2,160,974 | 2,135,239 | 1,449,702 | 1,774,779 | 1,899,596 | 1,573,566 | 1,493,507 | |||||||||||||||||||||||
Funds held by reinsured companies | 938,804 | 954,421 | 1,083,036 | 1,097,801 | 989,702 | 1,002,402 | 970,614 | |||||||||||||||||||||||
Deferred acquisition costs | 756,582 | 750,627 | 641,818 | 660,831 | 644,653 | 542,698 | 437,741 | |||||||||||||||||||||||
Other assets | 1,097,842 | 1,082,416 | 1,113,771 | 1,036,645 | 1,018,747 | 992,911 | 1,119,982 | |||||||||||||||||||||||
Total assets | $ | 17,197,143 | $ | 17,290,919 | $ | 16,036,949 | $ | 16,246,888 | $ | 15,665,538 | $ | 14,948,225 | $ | 13,744,130 | ||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||
Unpaid losses and loss expenses | $ | 7,614,036 | $ | 7,573,371 | $ | 7,231,436 | $ | 7,110,240 | $ | 6,944,959 | $ | 6,870,785 | $ | 6,737,661 | ||||||||||||||||
Policy benefits for life and annuity contracts | 1,641,389 | 1,600,447 | 1,541,687 | 1,622,564 | 1,494,205 | 1,430,691 | 1,223,871 | |||||||||||||||||||||||
Unearned premiums | 1,837,256 | 1,837,778 | 1,267,873 | 1,535,611 | 1,694,517 | 1,215,624 | 1,136,233 | |||||||||||||||||||||||
Reinsurance balances payable | 150,547 | 155,133 | 119,853 | 194,438 | 122,275 | 115,897 | 127,607 | |||||||||||||||||||||||
Debt obligations | 907,605 | 877,605 | 877,605 | 877,605 | 877,605 | 877,605 | 826,186 | |||||||||||||||||||||||
Other liabilities | 637,068 | 773,981 | 676,938 | 681,207 | 594,735 | 651,776 | 599,785 | |||||||||||||||||||||||
Total liabilities | 12,787,901 | 12,818,315 | 11,715,392 | 12,021,665 | 11,728,296 | 11,162,378 | 10,651,343 | |||||||||||||||||||||||
Total shareholders' equity | 4,409,242 | 4,472,604 | 4,321,557 | 4,225,223 | 3,937,242 | 3,785,847 | 3,092,787 | |||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 17,197,143 | $ | 17,290,919 | $ | 16,036,949 | $ | 16,246,888 | $ | 15,665,538 | $ | 14,948,225 | $ | 13,744,130 | ||||||||||||||||
Shareholders’ Equity Per Common Share (excluding cumulative preferred shares) | $ | 72.02 | $ | 72.84 | $ | 70.07 | $ | 66.74 | $ | 60.49 | $ | 57.22 | $ | 45.35 | ||||||||||||||||
Diluted Book Value Per Common and Common Share Equivalents Outstanding (assuming exercise of all stock-based awards) | $ | 70.22 | $ | 70.93 | $ | 67.96 | $ | 65.07 | $ | 58.96 | $ | 56.07 | $ | 44.57 | ||||||||||||||||
Number of Common and Common Share Equivalents Outstanding | 55,388.3 | 55,725.7 | 55,936.4 | 56,938.8 | 57,959.6 | 58,248.8 | 57,724.1 | |||||||||||||||||||||||
Capital Structure: | ||||||||||||||||||||||||||||||
Long-term debt | $ | 400,000 | 8% | $ | 620,000 | 12% | $ | 620,000 | 12% | $ | 620,000 | 12% | $ | 620,000 | 13% | $ | 620,000 | 13% | $ | 620,000 | 16% | |||||||||
Senior notes(1) | 250,000 | 5 | - | - | - | - | - | - | - | - | - | - | - | - | ||||||||||||||||
Capital efficient notes(2) | 250,000 | 5 | 250,000 | 5 | 250,000 | 5 | 250,000 | 5 | 250,000 | 5 | 250,000 | 6 | - | - | ||||||||||||||||
Trust preferred securities(3) | - | - | - | - | - | - | - | - | - | - | - | - | 200,000 | 5 | ||||||||||||||||
6.75% Series C cumulative preferred shares, aggregate liquidation | 290,000 | 5 | 290,000 | 5 | 290,000 | 6 | 290,000 | 6 | 290,000 | 6 | 290,000 | 6 | 290,000 | 7 | ||||||||||||||||
6.5% Series D cumulative preferred shares, aggregate liquidation | 230,000 | 4 | 230,000 | 4 | 230,000 | 4 | 230,000 | 4 | 230,000 | 5 | 230,000 | 5 | 230,000 | 6 | ||||||||||||||||
Common shareholders' equity | 3,889,242 | 73 | 3,952,604 | 74 | 3,801,557 | 73 | 3,705,223 | 73 | 3,417,242 | 71 | 3,265,847 | 70 | 2,572,787 | 66 | ||||||||||||||||
Total Capital | $ | 5,309,242 | 100% | $ | 5,342,604 | 100% | $ | 5,191,557 | 100% | $ | 5,095,223 | 100% | $ | 4,807,242 | 100% | $ | 4,655,847 | 100% | $ | 3,912,787 | 100% |
(1) PartnerRe Finance A LLC, the issuer of the senior notes, does not meet the consolidation requirements of FIN 46(R). Accordingly, the Company shows the related intercompany debt of $250 million on its Consolidated Balance Sheets.
(2) 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.
(3) Neither the Trust that issued the securities nor PartnerRe Finance I, which owns the Trust, meet the consolidation requirements of FIN 46(R). Accordingly, the Company shows the related intercompany debt of $206.2 million on its Consolidated Balance Sheets.
3
PartnerRe Ltd. | ||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||
(Expressed in millions of U.S. dollars) | ||||||||||
(Unaudited) |
For the three months ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||
Net cash provided by (used in) operating activities: | ||||||||||||||||||||
Underwriting operations | $ | 102 | $ | 159 | $ | 134 | $ | 262 | $ | 74 | ||||||||||
Investment income | 127 | 141 | 111 | 162 | 132 | |||||||||||||||
Taxes and foreign exchange | (7 | ) | (3 | ) | (20 | ) | (12 | ) | (13 | ) | ||||||||||
Cash flow from operations | 222 | 297 | 225 | 412 | 193 | |||||||||||||||
Transfer (to) from trading securities (1) | - | - | (300 | ) | (86 | ) | 99 | |||||||||||||
Net cash provided by (used in) operating activities as published | $ | 222 | $ | 297 | $ | (75 | ) | $ | 326 | $ | 292 | |||||||||
Net cash provided by (used in) operating activities | $ | 222 | $ | 297 | $ | (75 | ) | $ | 326 | $ | 292 | |||||||||
Net cash (used in) provided by investing activities (1) | (209 | ) | (406 | ) | 43 | (445 | ) | (282 | ) | |||||||||||
Net cash used in financing activities | (28 | ) | (49 | ) | (146 | ) | (107 | ) | (61 | ) | ||||||||||
Effect of foreign exchange rate changes on cash | (2 | ) | - | (1 | ) | 8 | 4 | |||||||||||||
Decrease in cash and cash equivalents | (17 | ) | (158 | ) | (179 | ) | (218 | ) | (47 | ) | ||||||||||
Cash and cash equivalents - beginning of period | 497 | 655 | 834 | 1,052 | 1,099 | |||||||||||||||
Cash and cash equivalents - end of period | $ | 480 | $ | 497 | $ | 655 | $ | 834 | $ | 1,052 |
(1) Following the adoption of SFAS 159 on January 1, 2008, purchases and sales of trading securities are classified within investing activities.
4
PartnerRe Ltd. |
Condensed Consolidated Statements of Cash Flows |
(Expressed in millions of U.S. dollars) |
(Unaudited) |
For the six months ended | For the year ended | |||||||||||||||
June 30, | June 30, | December 31, | December 31, | |||||||||||||
2008 | 2007 | 2007 | 2006 | |||||||||||||
Net cash provided by operating activities: | ||||||||||||||||
Underwriting operations | $ | 261 | $ | 254 | $ | 650 | $ | 440 | ||||||||
Investment income | 268 | 242 | 515 | 465 | ||||||||||||
Taxes and foreign exchange | (10 | ) | (34 | ) | (66 | ) | (23 | ) | ||||||||
Cash flow from operations | 519 | 462 | 1,099 | 882 | ||||||||||||
Transfer from (to) trading securities (1) | - | 514 | 128 | (390 | ) | |||||||||||
Net cash provided by operating activities as published | $ | 519 | $ | 976 | $ | 1,227 | $ | 492 | ||||||||
Net cash provided by operating activities | $ | 519 | $ | 976 | $ | 1,227 | $ | 492 | ||||||||
Net cash used in investing activities (1) | (615 | ) | (791 | ) | (1,193 | ) | (437 | ) | ||||||||
Net cash used in financing activities | (77 | ) | (126 | ) | (379 | ) | (73 | ) | ||||||||
Effect of foreign exchange rate changes on cash | (2 | ) | 4 | 11 | 6 | |||||||||||
(Decrease) increase in cash and cash equivalents | (175 | ) | 63 | (334 | ) | (12 | ) | |||||||||
Cash and cash equivalents - beginning of period | 655 | 989 | 989 | 1,001 | ||||||||||||
Cash and cash equivalents - end of period | $ | 480 | $ | 1,052 | $ | 655 | $ | 989 |
(1) Following the adoption of SFAS 159 on January 1, 2008, purchases and sales of trading securities are classified within investing activities.
5
PartnerRe Ltd. |
Consolidated Statements of Comprehensive Income |
(Expressed in thousands of U.S. dollars) |
(Unaudited) |
For the three months ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||
Net (loss) income | $ | (26,024 | ) | $ | 129,020 | $ | 180,603 | $ | 262,921 | $ | 105,021 | |||||||||
Change in net unrealized gains or losses on investments, net of tax | 6,653 | 8,574 | 13,243 | 71,997 | (54,167 | ) | ||||||||||||||
Change in currency translation adjustment | 4,000 | 53,006 | 35,744 | 52,702 | 31,695 | |||||||||||||||
Change in unfunded pension obligation, net of tax | 69 | (403 | ) | 4,307 | (349 | ) | 64 | |||||||||||||
Comprehensive (loss) income, net of tax | $ | (15,302 | ) | $ | 190,197 | $ | 233,897 | $ | 387,271 | $ | 82,613 | |||||||||
For the six months ended | For the year ended | |||||||||||||||||||
June 30, | June 30, | December 31, | December 31, | |||||||||||||||||
2008 | 2007 | 2007 | 2006 | |||||||||||||||||
Net income | $ | 102,996 | $ | 274,288 | $ | 717,812 | $ | 749,332 | ||||||||||||
Change in net unrealized gains or losses on investments, net of tax | 15,227 | (47,406 | ) | 37,834 | (20,136 | ) | ||||||||||||||
Change in currency translation adjustment | 57,006 | 40,597 | 129,043 | 56,120 | ||||||||||||||||
Change in unfunded pension obligation, net of tax | (334 | ) | 45 | 4,003 | (418 | ) | ||||||||||||||
Comprehensive income, net of tax | $ | 174,895 | $ | 267,524 | $ | 888,692 | $ | 784,898 |
6
PartnerRe Ltd. | ||||||||||||||||
Segment Information | ||||||||||||||||
(in millions of U.S. dollars) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
For the three months ended June 30, 2008 | ||||||||||||||||
U.S. | 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 | $ | 254 | $ | 134 | $ | 291 | $ | 145 | $ | 824 | $ | 138 | $ | 6 | $ | 968 |
Net premiums written | $ | 246 | $ | 132 | $ | 291 | $ | 145 | $ | 814 | $ | 136 | $ | 6 | $ | 956 |
Decrease (increase) in unearned premiums | 39 | 54 | (19) | (80) | (6) | 10 | (4) | - | ||||||||
Net premiums earned | $ | 285 | $ | 186 | $ | 272 | $ | 65 | $ | 808 | $ | 146 | $ | 2 | $ | 956 |
Losses and loss expenses and | ||||||||||||||||
life policy benefits | (227) | (87) | (144) | 20 | (438) | (111) | - | (549) | ||||||||
Acquisition costs | (64) | (48) | (75) | (7) | (194) | (34) | - | (228) | ||||||||
Technical result | $ | (6) | $ | 51 | $ | 53 | $ | 78 | $ | 176 | $ | 1 | $ | 2 | $ | 179 |
Other income | 2 | - | 3 | 5 | ||||||||||||
Other operating expenses | (63) | (12) | (22) | (97) | ||||||||||||
Underwriting result | $ | 115 | $ | (11) | n/a | $ | 87 | |||||||||
Net investment income | 18 | 127 | 145 | |||||||||||||
Allocated underwriting result (1) | $ | 7 | n/a | n/a | ||||||||||||
Net realized and unrealized investment losses | (296) | (296) | ||||||||||||||
Interest expense | (15) | (15) | ||||||||||||||
Net foreign exchange gains | 2 | 2 | ||||||||||||||
Income tax benefit | 53 | 53 | ||||||||||||||
Interest in losses of equity investments | (2) | (2) | ||||||||||||||
Net loss | n/a | $ | (26) | |||||||||||||
Loss ratio (2) | 79.6 | % | 46.7 | % | 52.8 | % | (30.7) | % | 54.2 | % | ||||||
Acquisition ratio (3) | 22.7 | 25.6 | 27.7 | 10.2 | 24.0 | |||||||||||
Technical ratio (4) | 102.3 | % | 72.3 | % | 80.5 | % | (20.5) | % | 78.2 | % | ||||||
Other operating expense ratio (5) | 7.7 | |||||||||||||||
Combined ratio (6) | 85.9 | % |
(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.
7
PartnerRe Ltd. | ||||||||||||||||
Segment Information | ||||||||||||||||
(in millions of U.S. dollars) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
For the three months ended June 30, 2007 | ||||||||||||||||
U.S. | Global (Non-U.S.) P&C | Global (Non-U.S.) Specialty | Catastrophe | Total Non-Life Segment | Life Segment | Corporate and Other (A) | Total | |||||||||
Gross premiums written | $ | 229 | $ | 129 | $ | 275 | $ | 131 | $ | 764 | $ | 144 | $ | - | $ | 908 |
Net premiums written | $ | 229 | $ | 127 | $ | 275 | $ | 132 | $ | 763 | $ | 136 | $ | - | $ | 899 |
Decrease (increase) in unearned premiums | 12 | 46 | (10) | (66) | (18) | 7 | 1 | (10) | ||||||||
Net premiums earned | $ | 241 | $ | 173 | $ | 265 | $ | 66 | $ | 745 | $ | 143 | $ | 1 | $ | 889 |
Losses and loss expenses and | ||||||||||||||||
life policy benefits | (150) | (131) | (110) | (16) | (407) | (117) | - | (524) | ||||||||
Acquisition costs | (56) | (44) | (70) | (7) | (177) | (29) | - | (206) | ||||||||
Technical result | $ | 35 | $ | (2) | $ | 85 | $ | 43 | $ | 161 | $ | (3) | $ | 1 | $ | 159 |
Other income (loss) | 2 | - | (11) | (9) | ||||||||||||
Other operating expenses | (52) | (8) | (20) | (80) | ||||||||||||
Underwriting result | $ | 111 | $ | (11) | n/a | $ | 70 | |||||||||
Net investment income | 15 | 116 | 131 | |||||||||||||
Allocated underwriting result (1) | $ | 4 | n/a | n/a | ||||||||||||
Net realized investment losses | (54) | (54) | ||||||||||||||
Interest expense | (13) | (13) | ||||||||||||||
Net foreign exchange losses | (9) | (9) | ||||||||||||||
Income tax expense | (23) | (23) | ||||||||||||||
Interest in earnings of equity investments | 3 | 3 | ||||||||||||||
Net income | n/a | $ | 105 | |||||||||||||
Loss ratio (2) | 62.1 | % | 75.6 | % | 41.4 | % | 24.7 | % | 54.6 | % | ||||||
Acquisition ratio (3) | 23.5 | 25.6 | 26.2 | 10.0 | 23.7 | |||||||||||
Technical ratio (4) | 85.6 | % | 101.2 | % | 67.6 | % | 34.7 | % | 78.3 | % | ||||||
Other operating expense ratio (5) | 7.0 | |||||||||||||||
Combined ratio (6) | 85.3 | % |
(A) The Company reports the results of ChannelRe on a one-quarter lag. The three months ended June 30, 2007 include the Company’s share of ChannelRe’s net income in the amount of $3.2 million.
8
PartnerRe Ltd. | ||||||||||||||||
Segment Information | ||||||||||||||||
(in millions of U.S. dollars) | ||||||||||||||||
(Unaudited) | ||||||||||||||||
For the six months ended June 30, 2008 | ||||||||||||||||
U.S. | 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 | $ | 586 | $ | 509 | $ | 645 | $ | 343 | $ | 2,083 | $ | 313 | $ | 11 | $ | 2,407 |
Net premiums written | $ | 578 | $ | 505 | $ | 624 | $ | 343 | $ | 2,050 | $ | 307 | $ | 11 | $ | 2,368 |
Increase in unearned premiums | (27) | (118) | (134) | (201) | (480) | (16) | (7) | (503) | ||||||||
Net premiums earned | $ | 551 | $ | 387 | $ | 490 | $ | 142 | $ | 1,570 | $ | 291 | $ | 4 | $ | 1,865 |
Losses and loss expenses and | ||||||||||||||||
life policy benefits | (398) | (234) | (291) | 18 | (905) | (233) | - | (1,138) | ||||||||
Acquisition costs | (131) | (100) | (129) | (13) | (373) | (59) | - | (432) | ||||||||
Technical result | $ | 22 | $ | 53 | $ | 70 | $ | 147 | $ | 292 | $ | (1) | $ | 4 | $ | 295 |
Other income | 3 | - | 3 | 6 | ||||||||||||
Other operating expenses | (120) | (21) | (48) | (189) | ||||||||||||
Underwriting result | $ | 175 | $ | (22) | n/a | $ | 112 | |||||||||
Net investment income | 33 | 249 | 282 | |||||||||||||
Allocated underwriting result (1) | $ | 11 | n/a | n/a | ||||||||||||
Net realized and unrealized investment losses | (271) | (271) | ||||||||||||||
Interest expense | (27) | (27) | ||||||||||||||
Net foreign exchange losses | (3) | (3) | ||||||||||||||
Income tax benefit | 11 | 11 | ||||||||||||||
Interest in losses of equity investments | (1) | (1) | ||||||||||||||
Net income | n/a | $ | 103 | |||||||||||||
Loss ratio (2) | 72.2 | % | 60.6 | % | 59.5 | % | (12.9) | % | 57.6 | % | ||||||
Acquisition ratio (3) | 23.7 | 25.7 | 26.3 | 9.6 | 23.8 | |||||||||||
Technical ratio (4) | 95.9 | % | 86.3 | % | 85.8 | % | (3.3) | % | 81.4 | % | ||||||
Other operating expense ratio (5) | 7.6 | |||||||||||||||
Combined ratio (6) | 89.0 | % |
9
PartnerRe Ltd. | ||||||||||||||||
Segment Information | ||||||||||||||||
(in millions of U.S. dollars) | ||||||||||||||||
(Unaudited) |
For the six months ended June 30, 2007 | ||||||||||||||||
U.S. | Global (Non-U.S.) P&C | Global (Non-U.S.) Specialty | Catastrophe | Total Non-Life Segment | Life Segment | Corporate and Other (A) | Total | |||||||||
Gross premiums written | $ | 524 | $ | 462 | $ | 580 | $ | 343 | $ | 1,909 | $ | 300 | $ | 1 | $ | 2,210 |
Net premiums written | $ | 523 | $ | 459 | $ | 560 | $ | 343 | $ | 1,885 | $ | 283 | $ | 1 | $ | 2,169 |
Increase in unearned premiums | (61) | (110) | (74) | (183) | (428) | (10) | - | (438) | ||||||||
Net premiums earned | $ | 462 | $ | 349 | $ | 486 | $ | 160 | $ | 1,457 | $ | 273 | $ | 1 | $ | 1,731 |
Losses and loss expenses and | ||||||||||||||||
life policy benefits | (287) | (249) | (209) | (45) | (790) | (213) | - | (1,003) | ||||||||
Acquisition costs | (114) | (90) | (127) | (16) | (347) | (60) | - | (407) | ||||||||
Technical result | $ | 61 | $ | 10 | $ | 150 | $ | 99 | $ | 320 | $ | - | $ | 1 | $ | 321 |
Other income (loss) | 4 | - | (12) | (8) | ||||||||||||
Other operating expenses | (104) | (15) | (40) | (159) | ||||||||||||
Underwriting result | $ | 220 | $ | (15) | n/a | $ | 154 | |||||||||
Net investment income | 26 | 224 | 250 | |||||||||||||
Allocated underwriting result (1) | $ | 11 | n/a | n/a | ||||||||||||
Net realized investment losses | (53) | (53) | ||||||||||||||
Interest expense | (27) | (27) | ||||||||||||||
Net foreign exchange losses | (13) | (13) | ||||||||||||||
Income tax expense | (43) | (43) | ||||||||||||||
Interest in earnings of equity investments | 6 | 6 | ||||||||||||||
Net income | n/a | $ | 274 | |||||||||||||
Loss ratio (2) | 62.1 | % | 71.2 | % | 43.1 | % | 28.2 | % | 54.2 | % | ||||||
Acquisition ratio (3) | 24.6 | 25.7 | 26.0 | 10.2 | 23.8 | |||||||||||
Technical ratio (4) | 86.7 | % | 96.9 | % | 69.1 | % | 38.4 | % | 78.0 | % | ||||||
Other operating expense ratio (5) | 7.1 | |||||||||||||||
Combined ratio (6) | 85.1 | % |
(A) The Company reports the results of ChannelRe on a one-quarter lag. The six months ended June 30, 2007 include the Company's share of ChannelRe's net income in the amount of $6.1 million.
10
PartnerRe Ltd. | ||||||||||||||||
Segment Information | ||||||||||||||||
(Expressed in millions of U.S. dollars) | ||||||||||||||||
(Unaudited) |
Non-life segment |
For the three months ended | |||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||
2008 | 2008 | 2007 | 2007 | 2007 | |||||||
Net premiums written | $ | 814 | $ | 1,236 | $ | 569 | $ | 730 | $ | 763 | |
Net premiums earned | $ | 808 | $ | 763 | $ | 838 | $ | 909 | $ | 745 | |
Losses and loss expenses | (438) | (468) | (409) | (429) | (407) | ||||||
Acquisition costs | (194) | (179) | (194) | (193) | (177) | ||||||
Technical result | $ | 176 | $ | 116 | $ | 235 | $ | 287 | $ | 161 | |
Other income | 2 | 1 | - | 2 | 2 | ||||||
Other operating expenses | (63) | (57) | (59) | (52) | (52) | ||||||
Underwriting result | $ | 115 | $ | 60 | $ | 176 | $ | 237 | $ | 111 | |
Loss ratio (1) | 54.2 | % | 61.3 | % | 48.8 | % | 47.2 | % | 54.6 | % | |
Acquisition ratio (2) | 24.0 | 23.5 | 23.2 | 21.3 | 23.7 | ||||||
Technical ratio (3) | 78.2 | % | 84.8 | % | 72.0 | % | 68.5 | % | 78.3 | % | |
Other operating expense ratio (4) | 7.7 | 7.5 | 7.0 | 5.7 | 7.0 | ||||||
Combined ratio (5) | 85.9 | % | 92.3 | % | 79.0 | % | 74.2 | % | 85.3 | % |
(1) Loss ratio is obtained by dividing losses and loss expenses by net premiums earned.
(2) Acquisition ratio is obtained by dividing acquisition costs by net premiums earned.
(3) Technical ratio is defined as the sum of the loss ratio and the acquisition ratio.
(4) Other operating expense ratio is obtained by dividing other operating expenses by net premiums earned.
(5) Combined ratio is defined as the sum of the technical ratio and the other operating expense ratio.
11
PartnerRe Ltd. | ||||||||||||||||
Segment Information | ||||||||||||||||
(Expressed in millions of U.S. dollars) | ||||||||||||||||
(Unaudited) |
Non-life segment |
For the six months ended | For the year ended | |||||||||
June 30, | June 30, | December 31, | December 31, | |||||||
2008 | 2007 | 2007 | 2006 | |||||||
Net premiums written | $ | 2,050 | $ | 1,885 | $ | 3,185 | $ | 3,192 | ||
Net premiums earned | $ | 1,570 | $ | 1,457 | $ | 3,203 | $ | 3,172 | ||
Losses and loss expenses | (905) | (790) | (1,627) | (1,741) | ||||||
Acquisition costs | (373) | (347) | (734) | (731) | ||||||
Technical result | $ | 292 | $ | 320 | $ | 842 | $ | 700 | ||
Other income | 3 | 4 | 7 | 5 | ||||||
Other operating expenses | (120) | (104) | (214) | (206) | ||||||
Underwriting result | $ | 175 | $ | 220 | $ | 635 | $ | 499 | ||
Loss ratio (1) | 57.6 | % | 54.2 | % | 50.8 | % | 54.8 | % | ||
Acquisition ratio (2) | 23.8 | 23.8 | 22.9 | 23.1 | ||||||
Technical ratio (3) | 81.4 | % | 78.0 | % | 73.7 | % | 77.9 | % | ||
Other operating expense ratio (4) | 7.6 | 7.1 | 6.7 | 6.5 | ||||||
Combined ratio (5) | 89.0 | % | 85.1 | % | 80.4 | % | 84.4 | % |
12
PartnerRe Ltd. | ||||||||||||||||
Segment Information | ||||||||||||||||
(Expressed in millions of U.S. dollars) | ||||||||||||||||
(Unaudited) |
U.S. sub-segment |
For the three months ended | |||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||
2008 | 2008 | 2007 | 2007 | 2007 | |||||||
Net premiums written | $ | 246 | $ | 332 | $ | 218 | $ | 279 | $ | 229 | |
Net premiums earned | $ | 285 | $ | 266 | $ | 264 | $ | 273 | $ | 241 | |
Losses and loss expenses | (227) | (171) | (161) | (160) | (150) | ||||||
Acquisition costs | (64) | (66) | (63) | (64) | (56) | ||||||
Technical result | $ | (6) | $ | 29 | $ | 40 | $ | 49 | $ | 35 | |
Loss ratio (1) | 79.6 | % | 64.2 | % | 61.0 | % | 58.6 | % | 62.1 | % | |
Acquisition ratio (2) | 22.7 | 24.9 | 23.8 | 23.3 | 23.5 | ||||||
Technical ratio (3) | 102.3 | % | 89.1 | % | 84.8 | % | 81.9 | % | 85.6 | % | |
Distribution of Net Premiums Written by Major Lines of Business: | |||||||||||
Casualty | 47 | % | 48 | % | 54 | % | 54 | % | 45 | % | |
Agriculture | 32 | 16 | 20 | 11 | 17 | ||||||
Property | 11 | 16 | 7 | 14 | 18 | ||||||
Multiline | 3 | 10 | 7 | 6 | 5 | ||||||
Motor | 4 | 5 | 6 | 8 | 7 | ||||||
Other | 3 | 5 | 6 | 7 | 8 | ||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
13
PartnerRe Ltd. | ||||||||||||||||
Segment Information | ||||||||||||||||
(Expressed in millions of U.S. dollars) | ||||||||||||||||
(Unaudited) |
U.S. sub-segment |
For the six months ended | For the year ended | |||||||||||
June 30, | June 30, | December 31, | December 31, | |||||||||
2008 | 2007 | 2007 | 2006 | |||||||||
Net premiums written | $ | 578 | $ | 523 | $ | 1,020 | $ | 1,029 | ||||
Net premiums earned | $ | 551 | $ | 462 | $ | 999 | $ | 1,030 | ||||
Losses and loss expenses | (398) | (287) | (608) | (725) | ||||||||
Acquisition costs | (131) | (114) | (241) | (243) | ||||||||
Technical result | $ | 22 | $ | 61 | $ | 150 | $ | 62 | ||||
Loss ratio (1) | 72.2 | % | 62.1 | % | 60.8 | % | 70.3 | % | ||||
Acquisition ratio (2) | 23.7 | 24.6 | 24.1 | 23.7 | ||||||||
Technical ratio (3) | 95.9 | % | 86.7 | % | 84.9 | % | 94.0 | % | ||||
Distribution of Net Premiums Written by Major Lines of Business: | ||||||||||||
Casualty | 47 | % | 47 | % | 50 | % | 52 | % | ||||
Agriculture | 23 | 9 | 12 | 12 | ||||||||
Property | 14 | 17 | 14 | 15 | ||||||||
Multiline | 7 | 11 | 9 | 8 | ||||||||
Motor | 5 | 7 | 7 | 7 | ||||||||
Other | 4 | 9 | 8 | 6 | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
14
PartnerRe Ltd. | ||||||||||||||||
Segment Information | ||||||||||||||||
(Expressed in millions of U.S. dollars) | ||||||||||||||||
(Unaudited) |
Global (Non-U.S.) P&C sub-segment |
For the three months ended | |||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||
2008 | 2008 | 2007 | 2007 | 2007 | |||||||
Net premiums written | $ | 132 | $ | 373 | $ | 127 | $ | 151 | $ | 127 | |
Net premiums earned | $ | 186 | $ | 201 | $ | 217 | $ | 192 | $ | 173 | |
Losses and loss expenses | (87) | (147) | (140) | (135) | (131) | ||||||
Acquisition costs | (48) | (52) | (55) | (46) | (44) | ||||||
Technical result | $ | 51 | $ | 2 | $ | 22 | $ | 11 | $ | (2) | |
Loss ratio (1) | 46.7 | % | 73.4 | % | 64.4 | % | 70.3 | % | 75.6 | % | |
Acquisition ratio (2) | 25.6 | 25.9 | 25.3 | 24.2 | 25.6 | ||||||
Technical ratio (3) | 72.3 | % | 99.3 | % | 89.7 | % | 94.5 | % | 101.2 | % | |
Distribution of Net Premiums Written by Major Lines of Business: | |||||||||||
Property | 63 | % | 64 | % | 71 | % | 71 | % | 73 | % | |
Casualty | 13 | 17 | 13 | 12 | 13 | ||||||
Motor | 24 | 19 | 16 | 17 | 14 | ||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
15
PartnerRe Ltd. | ||||||||||||||||
Segment Information | ||||||||||||||||
(Expressed in millions of U.S. dollars) | ||||||||||||||||
(Unaudited) |
Global (Non-U.S.) P&C sub-segment |
For the six months ended | For the year ended | |||||||||||
June 30, | June 30, | December 31, | December 31, | |||||||||
2008 | 2007 | 2007 | 2006 | |||||||||
Net premiums written | $ | 505 | $ | 459 | $ | 738 | $ | 760 | ||||
Net premiums earned | $ | 387 | $ | 349 | $ | 758 | $ | 775 | ||||
Losses and loss expenses | (234) | (249) | (523) | (505) | ||||||||
Acquisition costs | (100) | (90) | (191) | (209) | ||||||||
Technical result | $ | 53 | $ | 10 | $ | 44 | $ | 61 | ||||
Loss ratio (1) | 60.6 | % | 71.2 | % | 69.0 | % | 65.1 | % | ||||
Acquisition ratio (2) | 25.7 | 25.7 | 25.2 | 27.1 | ||||||||
Technical ratio (3) | 86.3 | % | 96.9 | % | 94.2 | % | 92.2 | % | ||||
Distribution of Net Premiums Written by Major Lines of Business: | ||||||||||||
Property | 64 | % | 66 | % | 68 | % | 67 | % | ||||
Casualty | 15 | 16 | 15 | 14 | ||||||||
Motor | 21 | 18 | 17 | 19 | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
16
PartnerRe Ltd. | ||||||||||||||||
Segment Information | ||||||||||||||||
(Expressed in millions of U.S. dollars) | ||||||||||||||||
(Unaudited) |
Global (Non-U.S.) Specialty sub-segment |
For the three months ended | |||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||
2008 | 2008 | 2007 | 2007 | 2007 | |||||||
Net premiums written | $ | 291 | $ | 333 | $ | 216 | $ | 250 | $ | 275 | |
Net premiums earned | $ | 272 | $ | 219 | $ | 247 | $ | 274 | $ | 265 | |
Losses and loss expenses | (144) | (148) | (122) | (119) | (110) | ||||||
Acquisition costs | (75) | (54) | (66) | (68) | (70) | ||||||
Technical result | $ | 53 | $ | 17 | $ | 59 | $ | 87 | $ | 85 | |
Loss ratio (1) | 52.8 | % | 67.7 | % | 49.4 | % | 43.5 | % | 41.4 | % | |
Acquisition ratio (2) | 27.7 | 24.6 | 26.7 | 24.7 | 26.2 | ||||||
Technical ratio (3) | 80.5 | % | 92.3 | % | 76.1 | % | 68.2 | % | 67.6 | % | |
Distribution of Net Premiums Written by Major Lines of Business: | |||||||||||
Aviation/Space | 15 | % | 11 | % | 21 | % | 18 | % | 20 | % | |
Credit/Surety | 20 | 19 | 21 | 20 | 17 | ||||||
Engineering | 20 | 16 | 26 | 21 | 20 | ||||||
Marine | 12 | 12 | 15 | 14 | 11 | ||||||
Specialty casualty | 13 | 19 | 6 | 8 | 14 | ||||||
Specialty property | 6 | 15 | 4 | 7 | 5 | ||||||
Other | 14 | 8 | 7 | 12 | 13 | ||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
17
PartnerRe Ltd. | ||||||||||||||||
Segment Information | ||||||||||||||||
(Expressed in millions of U.S. dollars) | ||||||||||||||||
(Unaudited) |
Global (Non-U.S.) Specialty sub-segment |
For the six months ended | For the year ended | |||||||||||
June 30, | June 30, | December 31, | December 31, | |||||||||
2008 | 2007 | 2007 | 2006 | |||||||||
Net premiums written | $ | 624 | $ | 560 | $ | 1,026 | $ | 991 | ||||
Net premiums earned | $ | 490 | $ | 486 | $ | 1,006 | $ | 979 | ||||
Losses and loss expenses | (291) | (209) | (450) | (446) | ||||||||
Acquisition costs | (129) | (127) | (260) | (236) | ||||||||
Technical result | $ | 70 | $ | 150 | $ | 296 | $ | 297 | ||||
Loss ratio (1) | 59.5 | % | 43.1 | % | 44.7 | % | 45.6 | % | ||||
Acquisition ratio (2) | 26.3 | 26.0 | 25.9 | 24.1 | ||||||||
Technical ratio (3) | 85.8 | % | 69.1 | % | 70.6 | % | 69.7 | % | ||||
Distribution of Net Premiums Written by Major Lines of Business: | ||||||||||||
Aviation/Space | 13 | % | 15 | % | 17 | % | 20 | % | ||||
Credit/Surety | 20 | 18 | 19 | 18 | ||||||||
Engineering | 18 | 16 | 20 | 17 | ||||||||
Marine | 12 | 12 | 13 | 12 | ||||||||
Specialty casualty | 16 | 16 | 12 | 12 | ||||||||
Specialty property | 10 | 11 | 8 | 8 | ||||||||
Other | 11 | 12 | 11 | 13 | ||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
18
PartnerRe Ltd. | ||||||||||||||||
Segment Information | ||||||||||||||||
(Expressed in millions of U.S. dollars) | ||||||||||||||||
(Unaudited) |
Catastrophe sub-segment |
For the three months ended | |||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||
2008 | 2008 | 2007 | 2007 | 2007 | |||||||
Net premiums written | $ | 145 | $ | 198 | $ | 8 | $ | 50 | $ | 132 | |
Net premiums earned | $ | 65 | $ | 77 | $ | 110 | $ | 170 | $ | 66 | |
Losses and loss expenses | 20 | (2) | 14 | (15) | (16) | ||||||
Acquisition costs | (7) | (7) | (10) | (15) | (7) | ||||||
Technical result | $ | 78 | $ | 68 | $ | 114 | $ | 140 | $ | 43 | |
Loss ratio (1) | (30.7) | % | 2.0 | % | (12.8) | % | 8.8 | % | 24.7 | % | |
Acquisition ratio (2) | 10.2 | 9.1 | 9.6 | 9.1 | 10.0 | ||||||
Technical ratio (3) | (20.5) | % | 11.1 | % | (3.2) | % | 17.9 | % | 34.7 | % |
19
PartnerRe Ltd. | ||||||||||||||||
Segment Information | ||||||||||||||||
(Expressed in millions of U.S. dollars) | ||||||||||||||||
(Unaudited) |
Catastrophe sub-segment |
For the six months ended | For the year ended | |||||||||||
June 30, | June 30, | December 31, | December 31, | |||||||||
2008 | 2007 | 2007 | 2006 | |||||||||
Net premiums written | $ | 343 | $ | 343 | $ | 401 | $ | 412 | ||||
Net premiums earned | $ | 142 | $ | 160 | $ | 440 | $ | 388 | ||||
Losses and loss expenses | 18 | (45) | (46) | (65) | ||||||||
Acquisition costs | (13) | (16) | (42) | (43) | ||||||||
Technical result | $ | 147 | $ | 99 | $ | 352 | $ | 280 | ||||
Loss ratio (1) | (12.9) | % | 28.2 | % | �� 10.5 | % | 16.9 | % | ||||
Acquisition ratio (2) | 9.6 | 10.2 | 9.6 | 11.1 | ||||||||
Technical ratio (3) | (3.3) | % | 38.4 | % | 20.1 | % | 28.0 | % |
20
PartnerRe Ltd. Segment Information (Expressed in millions of U.S. dollars) (Unaudited) | |||||||||||||||||||||||||
Life segment | |||||||||||||||||||||||||
For the three months ended | |||||||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | |||||||||||||||||||||
Net premiums written | $ | 136 | $ | 170 | $ | 144 | $ | 142 | $ | 136 | |||||||||||||||
Net premiums earned | $ | 146 | $ | 145 | $ | 151 | $ | 147 | $ | 143 | |||||||||||||||
Life policy benefits | (111 | ) | (122 | ) | (109 | ) | (133 | ) | (117 | ) | |||||||||||||||
Acquisition costs | (34 | ) | (25 | ) | (33 | ) | (22 | ) | (29 | ) | |||||||||||||||
Technical result | $ | 1 | $ | (2 | ) | $ | 9 | $ | (8 | ) | $ | (3 | ) | ||||||||||||
Other operating expenses | (12 | ) | (9 | ) | (9 | ) | (8 | ) | (8 | ) | |||||||||||||||
Underwriting result | $ | (11 | ) | $ | (11 | ) | $ | - | $ | (16 | ) | $ | (11 | ) | |||||||||||
Net investment income | 18 | 15 | 11 | 16 | 15 | ||||||||||||||||||||
Allocated underwriting result (1) | $ | 7 | $ | 4 | $ | 11 | $ | - | $ | 4 | |||||||||||||||
Distribution of Net Premiums Written by Major Lines of Business: | |||||||||||||||||||||||||
Mortality | 85 | % | 86 | % | 81 | % | 80 | % | 79 | % | |||||||||||||||
Longevity | 12 | 12 | 15 | 18 | 19 | ||||||||||||||||||||
Health | 3 | 2 | 4 | 2 | 2 | ||||||||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
(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.
21
PartnerRe Ltd. | |||||||||||||
Segment Information | |||||||||||||
(Expressed in millions of U.S. dollars) | |||||||||||||
(Unaudited) |
Life segment
For the six months ended | For the year ended | ||||||||||||||||||
June 30, | June 30, | December 31, | December 31, | ||||||||||||||||
2008 | 2007 | 2007 | 2006 | ||||||||||||||||
Net premiums written | $ | 307 | $ | 283 | $ | 569 | $ | 487 | |||||||||||
Net premiums earned | $ | 291 | $ | 273 | $ | 571 | $ | 487 | |||||||||||
Life policy benefits | (233 | ) | (213 | ) | (455 | ) | (363 | ) | |||||||||||
Acquisition costs | (59 | ) | (60 | ) | (116 | ) | (117 | ) | |||||||||||
Technical result | $ | (1 | ) | $ | - | $ | - | $ | 7 | ||||||||||
Other operating expenses | (21 | ) | (15 | ) | (33 | ) | (29 | ) | |||||||||||
Underwriting result | $ | (22 | ) | $ | (15 | ) | $ | (33 | ) | $ | (22 | ) | |||||||
Net investment income | 33 | 26 | 54 | 51 | |||||||||||||||
Allocated underwriting result (1) | $ | 11 | $ | 11 | $ | 21 | $ | 29 | |||||||||||
Distribution of Net Premiums Written by Major Lines of Business: | |||||||||||||||||||
Mortality | 86 | % | 83 | % | 82 | % | 79 | % | |||||||||||
Longevity | 12 | 14 | 15 | 19 | |||||||||||||||
Health | 2 | 3 | 3 | 2 | |||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
22
PartnerRe Ltd. | ||||||||||
Segment Information | ||||||||||
(Expressed in millions of U.S. dollars) | ||||||||||
(Unaudited) | ||||||||||
Corporate and Other |
For the three months ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||
Technical result | $ | 2 | $ | 2 | $ | 1 | $ | - | $ | 1 | ||||||||||
Other income (loss) | 3 | - | (15 | ) | 3 | (11 | ) | |||||||||||||
Corporate expenses | (18 | ) | (22 | ) | (16 | ) | (15 | ) | (19 | ) | ||||||||||
Other operating expenses | (4 | ) | (4 | ) | (4 | ) | (4 | ) | (1 | ) | ||||||||||
Net investment income | 127 | 122 | 127 | 120 | 116 | |||||||||||||||
Net realized and unrealized investment (losses) gains (1) | (296 | ) | 25 | (17 | ) | (3 | ) | (54 | ) | |||||||||||
Interest expense | (15 | ) | (12 | ) | (13 | ) | (14 | ) | (13 | ) | ||||||||||
Net foreign exchange gains (losses) | 2 | (4 | ) | 2 | (3 | ) | (9 | ) | ||||||||||||
Income tax benefit (expense) | 53 | (43 | ) | (4 | ) | (35 | ) | (23 | ) | |||||||||||
Interest in (losses) earnings of equity investments (A) | (2 | ) | 1 | (67 | ) | (23 | ) | 3 | ||||||||||||
PartnerRe's interest in ChannelRe's net (loss) income (A) | - | - | (76 | ) | (23 | ) | 3 |
(1) | Following the adoption of SFAS 159 on January 1, 2008, net realized and unrealized investment losses include both realized and unrealized losses on investments. Prior to the adoption of SFAS 159, net realized and unrealized investment losses included realized losses on investments and other-than-temporary impairment charges. |
(A) | The Company reports the results of its equity investments on a one-quarter lag. |
23
PartnerRe Ltd. |
Segment Information |
(Expressed in millions of U.S. dollars) |
(Unaudited) |
Corporate and Other |
For the six months ended | For the year ended | |||||||||||||||
June 30, | June 30, | December 31, | December 31, | |||||||||||||
2008 | 2007 | 2007 | 2006 | |||||||||||||
Technical result | $ | 4 | $ | 1 | $ | 3 | $ | - | ||||||||
Other income (loss) | 3 | (12 | ) | (24 | ) | 19 | ||||||||||
Corporate expenses | (40 | ) | (36 | ) | (67 | ) | (62 | ) | ||||||||
Other operating expenses | (8 | ) | (4 | ) | (13 | ) | (13 | ) | ||||||||
Net investment income | 249 | 224 | 469 | 398 | ||||||||||||
Net realized and unrealized investment (losses) gains (1) | (271 | ) | (53 | ) | (72 | ) | 47 | |||||||||
Interest expense | (27 | ) | (27 | ) | (54 | ) | (61 | ) | ||||||||
Net foreign exchange losses | (3 | ) | (13 | ) | (15 | ) | (24 | ) | ||||||||
Income tax benefit (expense) | 11 | (43 | ) | (82 | ) | (95 | ) | |||||||||
Interest in (losses) earnings of equity investments (A) | (1 | ) | 6 | (83 | ) | 12 | ||||||||||
PartnerRe's interest in ChannelRe's net income (loss) (A) | - | 6 | (93 | ) | 12 |
24
PartnerRe Ltd. |
Distribution of Premiums |
(Unaudited) |
For the three months ended | |||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | |||||||||||||||||
Distribution of Net Premiums Written by | |||||||||||||||||||||
Line of Business: | |||||||||||||||||||||
Non-Life | |||||||||||||||||||||
Property and casualty | |||||||||||||||||||||
Casualty | 14 | % | 16 | % | 19 | % | 19 | % | 13 | % | |||||||||||
Property | 11 | 21 | 15 | 17 | 15 | ||||||||||||||||
Motor | 4 | 6 | 5 | 5 | 4 | ||||||||||||||||
Multiline and other | 2 | 3 | 2 | 3 | 2 | ||||||||||||||||
Specialty | |||||||||||||||||||||
Agriculture | 10 | 5 | 7 | 5 | 6 | ||||||||||||||||
Aviation/Space | 5 | 3 | 6 | 5 | 6 | ||||||||||||||||
Catastrophe | 15 | 14 | 1 | 6 | 15 | ||||||||||||||||
Credit/Surety | 7 | 5 | 8 | 8 | 7 | ||||||||||||||||
Engineering | 6 | 4 | 8 | 6 | 6 | ||||||||||||||||
Energy | 3 | 1 | 2 | 2 | 2 | ||||||||||||||||
Marine | 3 | 3 | 4 | 4 | 3 | ||||||||||||||||
Specialty casualty | 4 | 4 | 2 | 2 | 4 | ||||||||||||||||
Specialty property | 2 | 3 | 1 | 2 | 2 | ||||||||||||||||
Life | 14 | 12 | 20 | 16 | 15 | ||||||||||||||||
$ | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||
Distribution of Gross Premiums Written by | |||||||||||||||||||||
Geography: | |||||||||||||||||||||
Europe | 39 | % | 52 | % | 47 | % | 40 | % | 40 | % | |||||||||||
North America | 47 | 36 | 41 | 44 | 47 | ||||||||||||||||
Asia, Australia and New Zealand | 7 | 5 | 6 | 6 | 8 | ||||||||||||||||
Latin America, Caribbean and Africa | 7 | 7 | 6 | 10 | 5 | ||||||||||||||||
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||||
Distribution of Gross Premiums Written by | |||||||||||||||||||||
Production Source: | |||||||||||||||||||||
Broker | 75 | % | 70 | % | 65 | % | 69 | % | 72 | % | |||||||||||
Direct | 25 | 30 | 35 | 31 | 28 | ||||||||||||||||
100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
25
PartnerRe Ltd. |
Distribution of Premiums |
(Unaudited) |
For the six months ended | For the year ended | ||||||||||||||||
June 30, | June 30, | December 31, | December 31, | ||||||||||||||
2008 | 2007 | 2007 | 2006 | ||||||||||||||
Distribution of Net Premiums Written by | |||||||||||||||||
Line of Business: | |||||||||||||||||
Non-Life | |||||||||||||||||
Property and casualty | |||||||||||||||||
Casualty | 15 | % | 15 | % | 17 | % | 17 | % | |||||||||
Property | 17 | 18 | 17 | 18 | |||||||||||||
Motor | 6 | 5 | 5 | 6 | |||||||||||||
Multiline and other | 2 | 4 | 3 | 3 | |||||||||||||
Specialty | |||||||||||||||||
Agriculture | 7 | 3 | 4 | 5 | |||||||||||||
Aviation/Space | 3 | 4 | 5 | 6 | |||||||||||||
Catastrophe | 14 | 16 | 11 | 11 | |||||||||||||
Credit/Surety | 6 | 6 | 7 | 6 | |||||||||||||
Engineering | 5 | 4 | 5 | 5 | |||||||||||||
Energy | 2 | 2 | 2 | 2 | |||||||||||||
Marine | 3 | 3 | 4 | 3 | |||||||||||||
Specialty casualty | 4 | 4 | 3 | 3 | |||||||||||||
Specialty property | 3 | 3 | 2 | 2 | |||||||||||||
Life | 13 | 13 | 15 | 13 | |||||||||||||
100 | % | 100 | % | $ | 100 | % | 100 | % | |||||||||
Distribution of Gross Premiums Written by | |||||||||||||||||
Geography: | |||||||||||||||||
Europe | 47 | % | 46 | % | 45 | % | 42 | % | |||||||||
North America | 40 | 42 | 42 | 43 | |||||||||||||
Asia, Australia and New Zealand | 6 | 7 | 6 | 8 | |||||||||||||
Latin America, Caribbean and Africa | 7 | 5 | 7 | 7 | |||||||||||||
100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Distribution of Gross Premiums Written by | |||||||||||||||||
Production Source: | |||||||||||||||||
Broker | 72 | % | 70 | % | 69 | % | 69 | % | |||||||||
Direct | 28 | 30 | 31 | 31 | |||||||||||||
100 | % | 100 | % | 100 | % | 100 | % |
26
PartnerRe Ltd. |
Distribution of Premiums |
(Unaudited) |
For the three months ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||
Distribution of Gross Premiums Written by Treaty Type | ||||||||||||||||||||
Non-Life sub-segment: | ||||||||||||||||||||
U.S. | ||||||||||||||||||||
Non-Proportional | 30 | % | 45 | % | 20 | % | 35 | % | 33 | % | ||||||||||
Proportional | 70 | 55 | 80 | 65 | 67 | |||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Global (Non U.S.) P&C | ||||||||||||||||||||
Non-Proportional | 13 | % | 36 | % | 8 | % | 16 | % | 10 | % | ||||||||||
Proportional | 87 | 64 | 92 | 84 | 90 | |||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Global (Non U.S.) Specialty | ||||||||||||||||||||
Non-Proportional | 13 | % | 26 | % | 6 | % | 12 | % | 14 | % | ||||||||||
Proportional | 87 | 74 | 94 | 88 | 86 | |||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Catastrophe | ||||||||||||||||||||
Non-Proportional | 97 | % | 98 | % | 96 | % | 98 | % | 98 | % | ||||||||||
Proportional | 3 | 2 | 4 | 2 | 2 | |||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Non-Life total | ||||||||||||||||||||
Non-Proportional | 33 | % | 45 | % | 13 | % | 27 | % | 33 | % | ||||||||||
Proportional | 67 | 55 | 87 | 73 | 67 | |||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
27
PartnerRe Ltd. |
Distribution of Premiums |
(Unaudited) |
For the six months ended | For the year ended | |||||||||||||||
June 30, | June 30, | December 31, | December 31, | |||||||||||||
2008 | 2007 | 2007 | 2006 | |||||||||||||
Distribution of Gross Premiums Written by Treaty Type | ||||||||||||||||
Non-Life sub-segment: | ||||||||||||||||
U.S. | ||||||||||||||||
Non-Proportional | 38 | % | 46 | % | 37 | % | 42 | % | ||||||||
Proportional | 62 | 54 | 63 | 58 | ||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
Global (Non U.S.) P&C | ||||||||||||||||
Non-Proportional | 30 | % | 32 | % | 25 | % | 25 | % | ||||||||
Proportional | 70 | 68 | 75 | 75 | ||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
Global (Non U.S.) Specialty | ||||||||||||||||
Non-Proportional | 20 | % | 20 | % | 15 | % | 17 | % | ||||||||
Proportional | 80 | 80 | 85 | 83 | ||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
Catastrophe | ||||||||||||||||
Non-Proportional | 97 | % | 99 | % | 99 | % | 94 | % | ||||||||
Proportional | 3 | 1 | 1 | 6 | ||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||
Non-Life total | ||||||||||||||||
Non-Proportional | 40 | % | 44 | % | 35 | % | 37 | % | ||||||||
Proportional | 60 | 56 | 65 | 63 | ||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % |
28
PartnerRe Ltd. |
Investment Portfolio |
(Expressed in millions of U.S. dollars) |
(Unaudited) |
June 30, | March 31, | December 31, | September 30, | June 30, | December 31, | December 31, | ||||||||||||||||||||||||||||||||||||||
2008 (1) | 2008 (1) | 2007 | 2007 | 2007 | 2006 | 2005 | ||||||||||||||||||||||||||||||||||||||
Investments: | ||||||||||||||||||||||||||||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||||||||||||||||||||||
U.S. government | $ | 874 | 8 | % | $ | 1,135 | 10 | % | $ | 1,217 | 11 | % | $ | 1,073 | 10 | % | $ | 1,043 | 11 | % | $ | 1,000 | 10 | % | $ | 716 | 8 | % | ||||||||||||||||
Government Sponsored Entities (GSEs) | 271 | 2 | 297 | 2 | 328 | 3 | 434 | 4 | 427 | 4 | 357 | 4 | 201 | 2 | ||||||||||||||||||||||||||||||
States or political subdivisions of states of the U.S. | - | - | - | - | - | - | - | - | - | - | 1 | - | 1 | - | ||||||||||||||||||||||||||||||
Other foreign governments | 2,917 | 25 | 3,112 | 27 | 2,821 | 26 | 2,734 | 26 | 2,349 | 24 | 1,985 | 21 | 1,775 | 21 | ||||||||||||||||||||||||||||||
Corporates | 3,774 | 33 | 3,495 | 30 | 3,111 | 28 | 2,769 | 26 | 2,590 | 26 | 2,731 | 28 | 2,625 | 31 | ||||||||||||||||||||||||||||||
Mortgage/asset-backed securities | 2,452 | 21 | 2,337 | 20 | 2,022 | 19 | 1,960 | 18 | 1,764 | 18 | 1,762 | 18 | 1,369 | 16 | ||||||||||||||||||||||||||||||
Total fixed maturities | 10,288 | 89 | 10,376 | 89 | 9,499 | 87 | 8,970 | 84 | 8,173 | 83 | 7,836 | 81 | 6,687 | 78 | ||||||||||||||||||||||||||||||
Short-term investments | 108 | 1 | 144 | 1 | 97 | 1 | 122 | 1 | 87 | 1 | 133 | 1 | 231 | 3 | ||||||||||||||||||||||||||||||
Equities | 1,065 | 9 | 1,100 | 9 | 872 | 8 | 1,324 | 13 | 1,417 | 14 | 1,015 | 11 | 1,334 | 16 | ||||||||||||||||||||||||||||||
Trading securities | - | - | - | - | 399 | 4 | 141 | 1 | 72 | 1 | 600 | 6 | 220 | 2 | ||||||||||||||||||||||||||||||
Other invested assets | 100 | 1 | 71 | 1 | 50 | - | 138 | 1 | 141 | 1 | 105 | 1 | 105 | 1 | ||||||||||||||||||||||||||||||
Total investments | $ | 11,561 | 100 | % | $ | 11,691 | 100 | % | $ | 10,917 | 100 | % | $ | 10,695 | 100 | % | $ | 9,890 | 100 | % | $ | 9,689 | 100 | % | $ | 8,577 | 100 | % | ||||||||||||||||
Cash and cash equivalents | $ | 480 | $ | 498 | $ | 655 | $ | 834 | $ | 1,052 | $ | 989 | $ | 1,001 | ||||||||||||||||||||||||||||||
Total investments and cash | 12,041 | 12,189 | 11,572 | 11,529 | 10,942 | 10,679 | 9,579 | |||||||||||||||||||||||||||||||||||||
Maturity distribution: | ||||||||||||||||||||||||||||||||||||||||||||
One year or less | $ | 790 | 8 | % | $ | 863 | 8 | % | $ | 752 | 8 | % | $ | 709 | 8 | % | $ | 865 | 11 | % | $ | 847 | 11 | % | $ | 745 | 11 | % | ||||||||||||||||
More than one year through five years | 3,698 | 35 | 3,749 | 36 | 3,533 | 37 | 3,186 | 35 | 2,947 | 36 | 2,681 | 34 | 2,500 | 36 | ||||||||||||||||||||||||||||||
More than five years through ten years | 3,003 | 29 | 3,140 | 30 | 2,882 | 30 | 2,820 | 31 | 2,237 | 27 | 2,111 | 26 | 1,872 | 27 | ||||||||||||||||||||||||||||||
More than ten years | 453 | 4 | 431 | 4 | 407 | 4 | 417 | 4 | 447 | 5 | 568 | 7 | 432 | 6 | ||||||||||||||||||||||||||||||
Subtotal | 7,944 | 76 | 8,183 | 78 | 7,574 | 79 | 7,132 | 78 | 6,496 | 79 | 6,207 | 78 | 5,549 | 80 | ||||||||||||||||||||||||||||||
Mortgage/asset-backed securities | 2,452 | 24 | 2,337 | 22 | 2,022 | 21 | 1,960 | 22 | 1,764 | 21 | 1,762 | 22 | 1,369 | 20 | ||||||||||||||||||||||||||||||
Total | $ | 10,396 | 100 | % | $ | 10,520 | 100 | % | $ | 9,596 | 100 | % | $ | 9,092 | 100 | % | $ | 8,260 | 100 | % | $ | 7,969 | 100 | % | $ | 6,918 | 100 | % | ||||||||||||||||
Credit quality by market value: | ||||||||||||||||||||||||||||||||||||||||||||
AAA | 59 | % | 64 | % | 65 | % | 66 | % | 67 | % | 65 | % | 61 | % | ||||||||||||||||||||||||||||||
AA | 8 | 7 | 7 | 6 | 6 | 5 | 4 | |||||||||||||||||||||||||||||||||||||
A | 17 | 14 | 12 | 13 | 13 | 14 | 17 | |||||||||||||||||||||||||||||||||||||
BBB | 12 | 11 | 12 | 12 | 10 | 11 | 12 | |||||||||||||||||||||||||||||||||||||
Below Investment Grade/Unrated | 4 | 4 | 4 | 3 | 4 | 5 | 6 | |||||||||||||||||||||||||||||||||||||
100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||||||||||||||||||
Expected average duration | 3.8 | Yrs | 4.0 | Yrs | 3.9 | Yrs | 4.0 | Yrs | 3.9 | Yrs | 4.1 | Yrs | 3.3 | Yrs | ||||||||||||||||||||||||||||||
Average yield to maturity at market | 5.0 | % | 4.4 | % | 4.7 | % | 5.0 | % | 5.2 | % | 4.9 | % | 4.5 | % | ||||||||||||||||||||||||||||||
Average credit quality | AA | AA | AA | AA | AA | AA | AA |
(1) | On January 1, 2008, the Company adopted SFAS 159. Following the adoption of SFAS 159, the fixed maturities, short-term investments and equities previously classified as available for sale securities are classified as trading securities. |
29
PartnerRe Ltd. |
Distribution of Corporate Bonds and Equities |
(Unaudited) |
June 30, 2008 | June 30, 2008 | |||||||||||
Distribution by sector - Corporate bonds | Distribution by sector - Equities | |||||||||||
Finance | 43.6 | % | Industrials | 16.1 | % | |||||||
Communications | 12.8 | Consumer noncyclical | 14.3 | |||||||||
Consumer noncyclical | 9.7 | Energy | 12.9 | |||||||||
Industrials | 8.7 | Finance | 12.8 | |||||||||
Insurance | 6.7 | Insurance | 10.1 | |||||||||
Energy | 5.7 | Real estate investment trusts | 7.4 | |||||||||
Consumer cyclical | 4.5 | Consumer cyclical | 6.5 | |||||||||
Technology | 2.7 | Utilities | 5.7 | |||||||||
Utilities | 2.6 | Communications | 5.4 | |||||||||
Materials | 2.2 | Technology | 4.4 | |||||||||
Real estate investment trusts | 0.8 | Materials | 3.0 | |||||||||
Total | 100.0 | % | Other | 1.4 | ||||||||
Total | 100.0 | % |
Concentration of investment risk
The Top 10 corporate bond issuers account for 19.5% of the Company's total corporate bonds. The single largest issuer accounts for 2.9% of the Company's total corporate bonds.
The Top 10 common stock issuers, excluding equity securities held in mutual funds and exchange traded funds, account for 20.6% of the Company's total equities. The single largest issuer accounts for 3.4% of the Company's total equities.
30
PartnerRe Ltd. |
Distribution of Mortgage/Asset-Backed Securities and Private Markets Investments |
(Expressed in thousands of U.S. dollars) |
(Unaudited) |
Fixed Maturities - Mortgage/Asset-Backed Securities by type and by rating | ||||||||||||||||||||||||||||
Rating at June 30, 2008 | ||||||||||||||||||||||||||||
GNMA | GSEs | AAA | AA | A | BBB | Total | ||||||||||||||||||||||
U.S. Asset-Backed Securities | $ | - | $ | - | $ | 266,383 | $ | 95,534 | $ | 4,689 | $ | 14,807 | $ | 381,413 | ||||||||||||||
U.S. Collaterized Mortgage Obligations | - | - | 60,928 | - | 933 | - | 61,861 | |||||||||||||||||||||
U.S. Mortgage Backed Securities (MBS) | 101,618 | 1,737,848 | - | 796 | - | - | 1,840,262 | |||||||||||||||||||||
U.S. MBS Interest Only | - | 16,131 | - | - | - | - | 16,131 | |||||||||||||||||||||
Subtotal U.S. mortgage/asset-backed securities | $ | 101,618 | $ | 1,753,979 | $ | 327,311 | $ | 96,330 | $ | 5,622 | $ | 14,807 | $ | 2,299,667 | ||||||||||||||
Non-U.S. Asset-Backed Securities | $ | - | $ | - | $ | 89,052 | $ | 10,579 | $ | 12,900 | $ | 21,084 | $ | 133,615 | ||||||||||||||
Non-U.S. Collaterized Mortgage Obligations | - | - | 6,102 | - | - | - | 6,102 | |||||||||||||||||||||
Non-U.S. Mortgage Backed Securities | - | - | 12,738 | - | - | - | 12,738 | |||||||||||||||||||||
Subtotal Non-U.S. mortgage/asset-backed securities | $ | - | $ | - | $ | 107,892 | $ | 10,579 | $ | 12,900 | $ | 21,084 | $ | 152,455 | ||||||||||||||
Total mortgage/asset-backed securities | $ | 101,618 | $ | 1,753,979 | $ | 435,203 | $ | 106,909 | $ | 18,522 | $ | 35,891 | $ | 2,452,122 | ||||||||||||||
Corporate Securities | - | 271,508 | - | - | - | - | 271,508 | |||||||||||||||||||||
Total | $ | 101,618 | $ | 2,025,487 | $ | 435,203 | $ | 106,909 | $ | 18,522 | $ | 35,891 | $ | 2,723,630 | ||||||||||||||
% of total | 3.7 | % | 74.4 | % | 16.0 | % | 3.9 | % | 0.7 | % | 1.3 | % | 100.0 | % |
Carrying and Notional Values of Private Markets Investments and Other Invested Assets | ||||||||||||||||||||||||||||
June 30, 2008 | ||||||||||||||||||||||||||||
Net Notional | ||||||||||||||||||||||||||||
Fair Value | Carrying | Amount of | Total Net | |||||||||||||||||||||||||
Investments | of Derivatives | Value | Derivatives | Exposures (1) | ||||||||||||||||||||||||
Private Markets Investments | ||||||||||||||||||||||||||||
Principal Finance | $ | 44,719 | $ | (18,024 | ) | $ | 26,695 | $ | 233,374 | $ | 260,069 | |||||||||||||||||
Insurance-Linked Securities | - | (3,811 | ) | (3,811 | ) | 45,000 | 41,189 | |||||||||||||||||||||
Strategic Investments | 68,289 | - | 68,289 | - | 68,289 | |||||||||||||||||||||||
Total other invested assets - Private Markets Investments | $ | 113,008 | $ | (21,835 | ) | $ | 91,173 | $ | 278,374 | $ | 369,547 | |||||||||||||||||
Other | 9,951 | (1,431 | ) | 8,520 | ||||||||||||||||||||||||
Total other invested assets | $ | 122,959 | $ | (23,266 | ) | $ | 99,693 |
(1) | The total net exposures originated in Private Markets are $796 million. In addition to the net exposures listed above of $370 million, the Company has the following other net exposures originated in Private Markets: |
- | Principal Finance: $149 million of assets listed under Investments - Fixed Maturities and $23 million of limits on transactions that use reinsurance accounting for a total exposure of $432 milion. |
- | Insurance-Linked Securities: $150 million of bonds listed under Investments - Fixed Maturities and $101 million of limits on transactions that use reinsurance accounting for a total exposure of $292 million. |
- | Strategic Investments: $4 million of assets listed under Other Assets for a total exposure of $72 million. |
31
PartnerRe Ltd. |
Composition of Net Investment Income and Net Realized and Unrealized Investment Gains (Losses) (1) |
(Expressed in thousands of U.S. dollars) |
(Unaudited) |
For the three months ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
2008 (1) | 2008 (1) | 2007 | 2007 | 2007 | ||||||||||||||||
Fixed maturities | $ | 129,056 | $ | 119,676 | $ | 118,984 | $ | 108,522 | $ | 99,715 | ||||||||||
Short-term investments, trading securities, cash and cash | ||||||||||||||||||||
equivalents | 4,695 | 6,295 | 14,550 | 12,424 | 14,611 | |||||||||||||||
Equities | 7,155 | 8,360 | 7,597 | 9,042 | 9,683 | |||||||||||||||
Funds held and other | 10,779 | 8,856 | 3,122 | 11,380 | 11,753 | |||||||||||||||
Investment expenses | (6,191 | ) | (6,177 | ) | (6,482 | ) | (5,791 | ) | (4,868 | ) | ||||||||||
Net investment income | $ | 145,494 | $ | 137,010 | $ | 137,771 | $ | 135,577 | $ | 130,894 | ||||||||||
Net realized investment gains (losses) on fixed maturities and short-term investments, excluding other-than-temporary impairments | $ | 17,844 | $ | 45,042 | $ | 4,992 | $ | 3,251 | $ | (19,759 | ) | |||||||||
Net realized investment (losses) gains on equities, excluding other-than-temporary impairments | (20,658 | ) | (25,780 | ) | 23,303 | (3,094 | ) | 46,767 | ||||||||||||
Other-than-temporary impairments | - | - | (36,866 | ) | (13,941 | ) | (63,762 | ) | ||||||||||||
Net realized gains (losses) on trading securities | - | - | 1,562 | (8,087 | ) | 11,197 | ||||||||||||||
Change in net unrealized investment (losses) gains on trading securities | - | - | (13,981 | ) | 2,197 | (3,841 | ) | |||||||||||||
Net realized and unrealized investment losses on equity securities sold but not yet purchased | - | - | (391 | ) | (1,036 | ) | (5,251 | ) | ||||||||||||
Net realized and unrealized (losses) gains on designated hedging activities | - | - | (1,996 | ) | 3,894 | 3,385 | ||||||||||||||
Net realized (losses) gains on other invested assets | (16,040 | ) | 23,440 | 16,000 | 11,547 | (18,207 | ) | |||||||||||||
Change in net unrealized gains (losses) on other invested assets | 13,947 | (2,132 | ) | - | - | - | ||||||||||||||
Change in net unrealized investment (losses) gains on fixed maturities subject to the fair value option under SFAS 159 | (303,100 | ) | 73,750 | - | - | - | ||||||||||||||
Change in net unrealized investment losses on short-term investments subject to the fair value option under SFAS 159 | (193 | ) | (122 | ) | - | - | - | |||||||||||||
Change in net unrealized investment gains (losses) on equities subject to the fair value option under SFAS 159 | 14,784 | (89,086 | ) | - | - | - | ||||||||||||||
Net other realized and unrealized investment (losses) gains | (2,839 | ) | - | (9,133 | ) | 2,166 | (4,176 | ) | ||||||||||||
Net realized and unrealized investment (losses) gains | $ | (296,255 | ) | $ | 25,112 | $ | (16,510 | ) | $ | (3,103 | ) | $ | (53,647 | ) |
(1) The Company adopted SFAS 159 effective January 1, 2008. For all periods prior to the adoption of SFAS 159, unrealized gains and losses, net of tax, on available for sale securities were recorded as a component of accumulated other comprehensive income in the Consolidated Balance Sheets. Following the adoption of SFAS 159, the Company's available for sale securities have been reclassified as trading securities and all changes in pre-tax unrealized investment gains and losses are recorded in net realized and unrealized investment gains (losses) in the Consolidated Statements of Operations. Net investment income and net realized and unrealized investment gains and losses on securities previously classified as trading have been recorded within the related investments classification (fixed maturities or equities) beginning in 2008, and the change in net unrealized investment gains and losses on such securities are included in change in net unrealized investment gains and losses on securities subject to the fair value option under SFAS 159.
32
PartnerRe Ltd. |
Composition of Net Investment Income and Net Realized and Unrealized Investment Gains (Losses) (1) |
(Expressed in thousands of U.S. dollars) |
(Unaudited) |
For the six months ended | For the year ended | |||||||||||||||
June 30, | June 30, | December 31, | December 31, | |||||||||||||
2008 (1) | 2007 | 2007 | 2006 | |||||||||||||
Fixed maturities | $ | 248,732 | $ | 194,165 | $ | 421,672 | $ | 333,888 | ||||||||
Short-term investments, trading securities, cash and cash | ||||||||||||||||
equivalents | 10,990 | 28,644 | 55,618 | 61,453 | ||||||||||||
Equities | 15,514 | 19,744 | 36,383 | 33,163 | ||||||||||||
Funds held and other | 19,636 | 17,837 | 32,339 | 40,446 | ||||||||||||
Investment expenses | (12,368 | ) | (10,479 | ) | (22,753 | ) | (19,549 | ) | ||||||||
Net investment income | $ | 282,504 | $ | 249,911 | $ | 523,259 | $ | 449,401 | ||||||||
Net realized investment gains (losses) on fixed maturities and short-term investments, excluding other-than-temporary impairments | $ | 62,886 | $ | (25,086 | ) | $ | (16,842 | ) | $ | (28,100 | ) | |||||
Net realized investment (losses) gains on equities, excluding other-than-temporary impairments | (46,438 | ) | 61,829 | 82,037 | 91,149 | |||||||||||
Other-than-temporary impairments | - | (74,190 | ) | (124,997 | ) | (26,561 | ) | |||||||||
Net realized gains on trading securities | - | 25,192 | 18,667 | 21,685 | ||||||||||||
Change in net unrealized investment (losses) gains on trading securities | - | (19,523 | ) | (31,308 | ) | 11,359 | ||||||||||
Net realized and unrealized investment losses on equity | ||||||||||||||||
securities sold but not yet purchased | - | (7,971 | ) | (9,398 | ) | (10,484 | ) | |||||||||
Net realized and unrealized gains on designated hedging activities | - | 5,585 | 7,482 | 10,645 | ||||||||||||
Net realized gains (losses) on other invested assets | 7,400 | (17,140 | ) | 10,408 | (1,242 | ) | ||||||||||
Change in net unrealized gains on other invested assets | 11,815 | - | - | - | ||||||||||||
Change in net unrealized investment losses on fixed maturities subject to the fair value option under SFAS 159 | (229,350 | ) | - | - | - | |||||||||||
Change in net unrealized investment losses on short-term investments subject to the fair value option under SFAS 159 | (315 | ) | - | - | - | |||||||||||
Change in net unrealized investment losses on equities subject to the fair value option under SFAS 159 | (74,302 | ) | - | - | - | |||||||||||
Net other realized and unrealized investment losses | (2,839 | ) | (1,575 | ) | (8,541 | ) | (21,291 | ) | ||||||||
Net realized and unrealized investment (losses) gains | $ | (271,143 | ) | $ | (52,879 | ) | $ | (72,492 | ) | $ | 47,160 | |||||
(1) The Company adopted SFAS 159 effective January 1, 2008. For all periods prior to the adoption of SFAS 159, unrealized gains and losses, net of tax, on available for sale securities were recorded as a component of accumulated other comprehensive income in the Consolidated Balance Sheets. Following the adoption of SFAS 159, the Company's available for sale securities have been reclassified as trading securities and all changes in pre-tax unrealized investment gains and losses are recorded in net realized and unrealized investment gains (losses) in the Consolidated Statements of Operations. Net investment income and net realized and unrealized investment gains and losses on securities previously classified as trading have been recorded within the related investments classification (fixed maturities or equities) beginning in 2008, and the change in net unrealized investment gains and losses on such securities are included in change in net unrealized investment gains and losses on securities subject to the fair value option under SFAS 159.
33
PartnerRe Ltd. |
Analysis of Unpaid Losses and Loss Expenses |
(Expressed in thousands of U.S. dollars) |
(Unaudited) |
As at and for the three months ended | As at and for the year ended | ||||||||||||||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | December 31, | December 31, | |||||||||||||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | 2007 | 2006 | |||||||||||||||||||||||||||
Reconciliation of beginning and ending liability for unpaid losses and loss expenses: | |||||||||||||||||||||||||||||||||
Gross liability at beginning of period | $ | 7,573,371 | $ | 7,231,436 | $ | 7,110,240 | $ | 6,944,959 | $ | 6,926,221 | $ | 6,870,785 | $ | 6,737,661 | |||||||||||||||||||
Reinsurance recoverable at beginning of period | (135,629 | ) | (132,479 | ) | (134,704 | ) | (129,440 | ) | (130,970 | ) | (138,585 | ) | (185,280 | ) | |||||||||||||||||||
Net liability at beginning of period | 7,437,742 | 7,098,957 | 6,975,536 | 6,815,519 | 6,795,251 | 6,732,200 | 6,552,381 | ||||||||||||||||||||||||||
Net incurred losses related to: | |||||||||||||||||||||||||||||||||
Current year | 567,961 | 584,670 | 504,483 | 518,009 | 513,120 | 2,041,752 | 1,999,730 | ||||||||||||||||||||||||||
Prior years | (130,667 | ) | (116,684 | ) | (95,746 | ) | (88,787 | ) | (106,555 | ) | (414,043 | ) | (251,748 | ) | |||||||||||||||||||
437,294 | 467,986 | 408,737 | 429,222 | 406,565 | 1,627,709 | 1,747,982 | |||||||||||||||||||||||||||
Net losses paid | (395,895 | ) | (342,356 | ) | (389,224 | ) | (434,139 | ) | (442,216 | ) | (1,620,367 | ) | (1,860,555 | ) | |||||||||||||||||||
Effects of foreign exchange rate changes | 1,510 | 213,155 | 103,908 | 164,934 | 55,919 | 359,415 | 292,392 | ||||||||||||||||||||||||||
Net liability at end of period | 7,480,651 | 7,437,742 | 7,098,957 | 6,975,536 | 6,815,519 | 7,098,957 | 6,732,200 | ||||||||||||||||||||||||||
Reinsurance recoverable at end of period | 133,385 | 135,629 | 132,479 | 134,704 | 129,440 | 132,479 | 138,585 | ||||||||||||||||||||||||||
Gross liability at end of period | $ | 7,614,036 | $ | 7,573,371 | $ | 7,231,436 | $ | 7,110,240 | $ | 6,944,959 | $ | 7,231,436 | $ | 6,870,785 | |||||||||||||||||||
Breakdown of gross liability at end of period: | |||||||||||||||||||||||||||||||||
Case reserves | $ | 3,198,182 | $ | 3,163,431 | $ | 3,062,414 | $ | 3,069,483 | $ | 2,980,552 | $ | 3,062,414 | $ | 2,946,228 | |||||||||||||||||||
Additional case reserves | 304,796 | 320,706 | 306,487 | 299,365 | 285,973 | 306,487 | 294,554 | ||||||||||||||||||||||||||
Incurred but not reported reserves | 4,111,058 | 4,089,234 | 3,862,535 | 3,741,392 | 3,678,434 | 3,862,535 | 3,630,003 | ||||||||||||||||||||||||||
Gross liability at end of period | $ | 7,614,036 | $ | 7,573,371 | $ | 7,231,436 | $ | 7,110,240 | $ | 6,944,959 | $ | 7,231,436 | $ | 6,870,785 | |||||||||||||||||||
Breakdown of gross liability at end of period by Non-Life sub-segment: | |||||||||||||||||||||||||||||||||
U.S. | $ | 2,674,545 | $ | 2,581,781 | $ | 2,515,820 | $ | 2,455,670 | $ | 2,462,931 | $ | 2,515,820 | $ | 2,391,868 | |||||||||||||||||||
Global (Non-U.S.) P&C | 2,658,505 | 2,708,713 | 2,542,278 | 2,485,459 | 2,377,972 | 2,542,278 | 2,305,683 | ||||||||||||||||||||||||||
Global (Non-U.S.) Specialty | 2,049,163 | 2,009,980 | 1,887,187 | 1,840,396 | 1,760,131 | 1,887,187 | 1,747,408 | ||||||||||||||||||||||||||
Catastrophe | 231,823 | 272,897 | 286,151 | 328,715 | 343,925 | 286,151 | 425,826 | ||||||||||||||||||||||||||
Gross liability at end of period | $ | 7,614,036 | $ | 7,573,371 | $ | 7,231,436 | $ | 7,110,240 | $ | 6,944,959 | $ | 7,231,436 | $ | 6,870,785 | |||||||||||||||||||
Unrecognized time value of non-life reserves | $ | 1,184 | $ | 1,053 | $ | 1,122 | $ | 1,171 | $ | 1,268 | $ | 1,122 | $ | 1,143 | |||||||||||||||||||
Non-life paid loss ratio data: | |||||||||||||||||||||||||||||||||
Non-life paid losses to incurred losses ratio | 90.5 | % | 73.2 | % | 95.2 | % | 101.1 | % | 108.8 | % | 99.6 | % | 106.4 | % | |||||||||||||||||||
Non-life paid losses to net premiums earned ratio | 48.9 | % | 44.8 | % | 46.4 | % | 47.7 | % | 59.3 | % | 50.5 | % | 58.5 | % |
34
PartnerRe Ltd. |
Analysis of Policy Benefits for Life and Annuity Contracts |
(Expressed in thousands of U.S. dollars) |
(Unaudited) |
As at and for the three months ended | As at and for the year ended | |||||||||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | December 31, | December 31, | ||||||||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | 2007 | 2006 | ||||||||||||||||||||||
Reconciliation of beginning and ending policy benefits for life and annuity contracts: | ||||||||||||||||||||||||||||
Gross liability at beginning of period | $ | 1,600,447 | $ | 1,541,687 | $ | 1,622,564 | $ | 1,494,205 | $ | 1,500,249 | $ | 1,430,691 | $ | 1,223,871 | ||||||||||||||
Reinsurance recoverable at beginning of period | (44,458 | ) | (43,098 | ) | (40,871 | ) | (39,231 | ) | (42,610 | ) | (42,542 | ) | (31,033 | ) | ||||||||||||||
Net liability at beginning of period | 1,555,989 | 1,498,589 | 1,581,693 | 1,454,974 | 1,457,639 | 1,388,149 | 1,192,838 | |||||||||||||||||||||
Net incurred losses related to: | ||||||||||||||||||||||||||||
Current year | 111,785 | 116,382 | 111,099 | 124,408 | 115,280 | 453,099 | 375,355 | |||||||||||||||||||||
Prior year | (359 | ) | 5,300 | (2,280 | ) | 8,501 | 2,193 | 1,653 | (12,000 | ) | ||||||||||||||||||
111,426 | 121,682 | 108,819 | 132,909 | 117,473 | 454,752 | 363,355 | ||||||||||||||||||||||
Net losses paid | (68,124 | ) | (107,217 | ) | (204,512 | ) | (49,806 | ) | (142,008 | ) | (430,281 | ) | (277,717 | ) | ||||||||||||||
Effects of foreign exchange rate changes | 1,935 | 42,935 | 12,589 | 43,616 | 21,870 | 85,969 | 109,673 | |||||||||||||||||||||
Net liability at end of period | 1,601,226 | 1,555,989 | 1,498,589 | 1,581,693 | 1,454,974 | 1,498,589 | 1,388,149 | |||||||||||||||||||||
Reinsurance recoverable at end of period | 40,163 | 44,458 | 43,098 | 40,871 | 39,231 | 43,098 | 42,542 | |||||||||||||||||||||
Gross liability at end of period | $ | 1,641,389 | $ | 1,600,447 | $ | 1,541,687 | $ | 1,622,564 | $ | 1,494,205 | $ | 1,541,687 | $ | 1,430,691 |
35
PartnerRe Ltd. |
Reserve Development |
(Expressed in thousands of U.S. dollars) |
(Unaudited) |
For the three months ended | ||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||
Prior year net favorable (adverse) reserve development: | ||||||||||||||||||||
Non-Life segment: | ||||||||||||||||||||
U.S. | $ | 22,378 | $ | 15,725 | $ | 22,242 | $ | 19,407 | $ | 17,840 | ||||||||||
Global (Non-U.S.) P&C | 51,959 | 57,550 | 25,152 | 12,328 | 19,546 | |||||||||||||||
Global (Non-U.S.) Specialty | 31,880 | 32,865 | 41,708 | 44,836 | 56,724 | |||||||||||||||
Catastrophe | 24,450 | 10,544 | 6,644 | 12,216 | 12,445 | |||||||||||||||
Total Non-Life net prior year reserve development | $ | 130,667 | $ | 116,684 | $ | 95,746 | $ | 88,787 | $ | 106,555 | ||||||||||
Life segment | $ | 359 | $ | (5,300 | ) | $ | 2,280 | $ | (8,501 | ) | $ | (2,193 | ) | |||||||
For the six months ended | For the year ended | |||||||||||||||||||
June 30, | June 30, | December 31, | December 31, | |||||||||||||||||
2008 | 2007 | 2007 | 2006 | |||||||||||||||||
Prior year net favorable (adverse) reserve development: | ||||||||||||||||||||
Non-Life segment: | ||||||||||||||||||||
U.S. | $ | 38,103 | $ | 30,612 | $ | 72,261 | $ | 1,549 | ||||||||||||
Global (Non-U.S.) P&C | 109,509 | 59,496 | 96,976 | 66,318 | ||||||||||||||||
Global (Non-U.S.) Specialty | 64,745 | 115,586 | 202,130 | 208,536 | ||||||||||||||||
Catastrophe | 34,994 | 23,816 | 42,676 | (24,655 | ) | |||||||||||||||
Total Non-Life net prior year reserve development | $ | 247,351 | $ | 229,510 | $ | 414,043 | $ | 251,748 | ||||||||||||
Life segment | $ | (4,941 | ) | $ | 4,568 | $ | (1,653 | ) | $ | 12,000 |
36
PartnerRe Ltd.
Reconciliation of GAAP and non-GAAP measures |
(in thousands of U.S. dollars except per share data) |
(Unaudited) |
For the three months ended | ||||||||||||||||||||||||
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||||||
Reconciliation of GAAP and non-GAAP measures: | ||||||||||||||||||||||||
Annualized return on beginning common shareholders' equity (1) calculated with net (loss) income available to common shareholders | (3.6 | ) | % | 12.7 | % | 21.1 | % | 31.1 | % | 11.8 | % | |||||||||||||
Less: | ||||||||||||||||||||||||
Annualized net realized and unrealized investment (losses) gains, net of tax, on beginning common shareholders' equity (1) (2) | (23.0 | ) | 1.0 | (2.3 | ) | 0.3 | (5.3 | ) | ||||||||||||||||
Interest in earnings (losses) of equity investments, net of tax, on beginning common shareholders' equity (1) | 0.1 | 0.1 | (8.1 | ) | (2.8 | ) | 0.4 | |||||||||||||||||
Annualized operating return on beginning common shareholders' equity (1) | 19.3 | % | 11.6 | % | 31.5 | % | 33.6 | % | 16.7 | % | ||||||||||||||
Net (loss) income | $ | (26,024 | ) | $ | 129,020 | $ | 180,603 | $ | 262,921 | $ | 105,021 | |||||||||||||
Less: | ||||||||||||||||||||||||
Net realized and unrealized investment (losses) gains, net of tax (2) | (219,063 | ) | 8,936 | (18,982 | ) | 2,784 | (42,775 | ) | ||||||||||||||||
Interest in earnings (losses) of equity investments, net of tax | 578 | 1,242 | (66,415 | ) | (22,692 | ) | 3,214 | |||||||||||||||||
Dividends to preferred shareholders | 8,631 | 8,631 | 8,631 | 8,631 | 8,631 | |||||||||||||||||||
Operating earnings available to common shareholders | $ | 183,830 | $ | 110,211 | $ | 257,369 | $ | 274,198 | $ | 135,951 | ||||||||||||||
Per diluted share: | ||||||||||||||||||||||||
Net (loss) income | $ | (0.64 | ) | $ | 2.16 | $ | 3.04 | $ | 4.44 | $ | 1.66 | |||||||||||||
Less: | ||||||||||||||||||||||||
Net realized and unrealized investment (losses) gains, net of tax (2) | (4.04 | ) | 0.16 | (0.34 | ) | 0.05 | (0.74 | ) | ||||||||||||||||
Interest in earnings (losses) of equity investments, net of tax | 0.01 | 0.02 | (1.17 | ) | (0.39 | ) | 0.06 | |||||||||||||||||
Operating earnings | $ | 3.39 | $ | 1.98 | $ | 4.55 | $ | 4.78 | $ | 2.34 |
(1) | Excluding cumulative preferred shares: 2007 and 2006, $520,000 |
(2) | Following the adoption of SFAS 159 on January 1, 2008, net realized and unrealized investment losses include both realized and unrealized losses on investments. Prior to the adoption of SFAS 159, net realized and unrealized investment losses included realized losses on investments and other-than-temporary impairment charges. |
37
PartnerRe Ltd. |
Reconciliation of GAAP and non-GAAP measures |
(in thousands of U.S. dollars except per share data) |
(Unaudited) |
For the six months ended | For the year ended | |||||||||||||||||
June 30, | June 30, | December 31, | December 31, | |||||||||||||||
2008 | 2007 | 2007 | 2006 | |||||||||||||||
Reconciliation of GAAP and non-GAAP measures: | ||||||||||||||||||
Annualized return on beginning common shareholders' equity (1) calculated with net income available to common shareholders | 4.5 | % | 15.7 | % | 20.9 | % | 27.8 | % | ||||||||||
Less: | ||||||||||||||||||
Annualized net realized and unrealized investment (losses) gains, net of tax, on beginning common shareholders' equity (1) (2) | (11.1 | ) | (2.5 | ) | (1.7 | ) | 1.8 | |||||||||||
Interest in earnings (losses) of equity investments, net of tax, on beginning common shareholders' equity (1) | 0.1 | 0.4 | (2.6 | ) | 0.5 | |||||||||||||
Annualized operating return on beginning common shareholders' equity(1) | 15.5 | % | 17.8 | % | 25.2 | % | 25.5 | % | ||||||||||
Net income | $ | 102,996 | $ | 274,288 | $ | 717,812 | $ | 749,332 | ||||||||||
Less: | ||||||||||||||||||
Net realized and unrealized investment (losses) gains, net of tax (2) | (210,128 | ) | (40,089 | ) | (56,288 | ) | 46,459 | |||||||||||
Interest in earnings (losses) of equity investments, net of tax | 1,820 | 6,239 | (82,867 | ) | 11,966 | |||||||||||||
Dividends to preferred shareholders | 17,263 | 17,263 | 34,525 | 34,525 | ||||||||||||||
Operating earnings available to common shareholders | $ | 294,041 | $ | 290,875 | $ | 822,442 | $ | 656,382 | ||||||||||
Per diluted share: | ||||||||||||||||||
Net income | $ | 1.54 | $ | 4.42 | $ | 11.87 | $ | 12.37 | ||||||||||
Less: | ||||||||||||||||||
Net realized and unrealized investment (losses) gains, net of tax (2) | (3.77 | ) | (0.69 | ) | (0.98 | ) | 0.80 | |||||||||||
Interest in earnings (losses) of equity investments, net of tax | 0.03 | 0.11 | (1.44 | ) | 0.21 | |||||||||||||
Operating earnings | $ | 5.28 | $ | 5.00 | $ | 14.29 | $ | 11.36 |
(1) | Excluding cumulative preferred shares: 2007 and 2006, $520,000 |
(2) | Following the adoption of SFAS 159 on January 1, 2008, net realized and unrealized investment losses include both realized and unrealized losses on investments. Prior to the adoption of SFAS 159, net realized and unrealized investment losses included realized losses on investments and other-than-temporary impairment charges. |
38
PartnerRe Ltd. |
Reconciliation of GAAP and non-GAAP measures |
(in thousands of U.S. dollars or shares, except per share data) |
(Unaudited) |
June 30, | March 31, | December 31, | September 30, | June 30, | December 31, | December 31, | ||||||||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | 2006 | 2005 | ||||||||||||||||||||||
Reconciliation of GAAP and non-GAAP measures: | ||||||||||||||||||||||||||||
Shareholders' equity | $ | 4,409,242 | $ | 4,472,604 | $ | 4,321,557 | $ | 4,225,223 | $ | 3,937,242 | $ | 3,785,847 | $ | 3,092,787 | ||||||||||||||
Less: | ||||||||||||||||||||||||||||
6.75% Series C cumulative preferred shares, aggregate liquidation | 290,000 | 290,000 | 290,000 | 290,000 | 290,000 | 290,000 | 290,000 | |||||||||||||||||||||
6.5% Series D cumulative preferred shares, aggregate liquidation | 230,000 | 230,000 | 230,000 | 230,000 | 230,000 | 230,000 | 230,000 | |||||||||||||||||||||
Common shareholders' equity | 3,889,242 | 3,952,604 | 3,801,557 | 3,705,223 | 3,417,242 | 3,265,847 | 2,572,787 | |||||||||||||||||||||
Less: | ||||||||||||||||||||||||||||
Net unrealized (losses) gains on fixed income securities, net of tax | (96,837 | ) | 139,920 | 71,958 | 1,728 | (79,079 | ) | (18,694 | ) | 4,382 | ||||||||||||||||||
Book value excluding net unrealized gains or losses on fixed income securities, net of tax | $ | 3,986,079 | $ | 3,812,684 | $ | 3,729,599 | $ | 3,703,495 | $ | 3,496,321 | $ | 3,284,541 | $ | 2,568,405 | ||||||||||||||
Divided by: | ||||||||||||||||||||||||||||
Number of common and common share equivalents outstanding | 55,388.3 | 55,725.7 | 55,936.4 | 56,938.8 | 57,959.6 | 58,248.8 | 57,724.1 | |||||||||||||||||||||
Equals: | ||||||||||||||||||||||||||||
Diluted book value per common and common share equivalents outstanding | ||||||||||||||||||||||||||||
excluding net unrealized gains or losses on fixed income securities, net of tax | $ | 71.97 | $ | 68.42 | $ | 66.68 | $ | 65.04 | $ | 60.32 | $ | 56.39 | $ | 44.49 |
39
PartnerRe Ltd. Diluted Book Value per Common Share - Treasury Stock Method (1) |
(in thousands of U.S. dollars or shares, except per share data) |
(Unaudited) |
June 30, | March 31, | December 31, | September 30, | June 30, | ||||||||||||||||
2008 | 2008 | 2007 | 2007 | 2007 | ||||||||||||||||
Total shareholders' equity | $ | 4,409,242 | $ | 4,472,604 | $ | 4,321,557 | $ | 4,225,223 | $ | 3,937,242 | ||||||||||
Less: preferred shares | (520,000 | ) | (520,000 | ) | �� | (520,000 | ) | (520,000 | ) | (520,000 | ) | |||||||||
Common shareholders' equity | $ | 3,889,242 | $ | 3,952,604 | $ | 3,801,557 | $ | 3,705,223 | $ | 3,417,242 | ||||||||||
Basic common shares outstanding | 54,004.9 | 54,262.9 | 54,250.5 | 55,516.1 | 56,493.7 | |||||||||||||||
Basic book value per common share | $ | 72.02 | $ | 72.84 | $ | 70.07 | $ | 66.74 | $ | 60.49 | ||||||||||
Diluted book value per common share | ||||||||||||||||||||
Common shareholders' equity | $ | 3,889,242 | $ | 3,952,604 | $ | 3,801,557 | $ | 3,705,223 | $ | 3,417,242 | ||||||||||
Basic common shares outstanding | 54,004.9 | 54,262.9 | 54,250.5 | 55,516.1 | 56,493.7 | |||||||||||||||
Add: Stock options and other | 2,820.1 | 3,002.5 | 3,018.5 | 3,126.2 | 3,297.4 | |||||||||||||||
Add: Restricted stock units | 748.9 | 690.5 | 680.6 | 679.3 | 668.8 | |||||||||||||||
Add: Forward sale contract | - | - | 115.4 | - | - | |||||||||||||||
Less: Stock options and other bought back via treasury stock method | (2,185.6 | ) | (2,230.2 | ) | (2,128.6 | ) | (2,382.8 | ) | (2,500.3 | ) | ||||||||||
Diluted common and common share equivalents outstanding | 55,388.3 | 55,725.7 | 55,936.4 | 56,938.8 | 57,959.6 | |||||||||||||||
Diluted book value per common share | $ | 70.22 | $ | 70.93 | $ | 67.96 | $ | 65.07 | $ | 58.96 |
(1) This method assumes that proceeds received upon exercise of options will be used to repurchase the Company's common shares at the average market price. Unvested restricted stock and the dilutive impact of the Company's forward sale contract are also added to determine the diluted common and common share equivalents outstanding.
40
PartnerRe Ltd. |
Diluted Book Value per Common Share - Rollforward |
(in millions of U.S. dollars or shares, except per share data) |
(Unaudited) |
As of and for the three months ended | As of and for the six months ended | |||||||||||||
June 30, 2008 | June 30, 2008 | |||||||||||||
Common shareholders' equity | Diluted book value per common share | Common shareholders' equity | Diluted book value per common share | |||||||||||
Common shareholders' equity / diluted book value per common share at beginning of period | $ | 3,953 | $ | 70.93 | $ | 3,802 | $ | 67.96 | ||||||
Technical result | 179 | 3.29 | 295 | 5.29 | ||||||||||
Other operating expenses | (97) | (1.78) | (189) | (3.39) | ||||||||||
Net investment income | 145 | 2.68 | 282 | 5.07 | ||||||||||
Other, net | (8) | (0.16) | (24) | (0.43) | ||||||||||
Operating income tax expense | (26) | (0.48) | (53) | (0.95) | ||||||||||
Preferred dividends | (9) | (0.16) | (17) | (0.31) | ||||||||||
Operating earnings | 184 | 3.39 | 294 | 5.28 | ||||||||||
Net realized and unrealized investment losses, net of tax (1) | (219) | (4.04) | (210) | (3.77) | ||||||||||
Interest in earnings of equity investments, net of tax | 1 | 0.01 | 2 | 0.03 | ||||||||||
Net (loss) income available to common shareholders | (34) | (0.64) | 86 | 1.54 | ||||||||||
Common share dividends | (25) | (0.46) | (50) | (0.92) | ||||||||||
Change in currency translation adjustment | 4 | 0.07 | 57 | 1.02 | ||||||||||
Change in net unrealized gains or losses on investments, net of tax | 6 | 0.12 | 15 | 0.27 | ||||||||||
Repurchase of common shares, net | �� (14) | (0.27) | (20) | (0.36) | ||||||||||
Other, net | (1) | (0.02) | (1) | (0.02) | ||||||||||
Impact of change in number of common and common share equivalents outstanding | n/a | 0.49 | n/a | 0.73 | ||||||||||
Common shareholders' equity / diluted book value per common share at end of period | $ | 3,889 | $ | 70.22 | $ | 3,889 | $ | 70.22 |
(1) | Following the adoption of SFAS 159 on January 1, 2008, net realized and unrealized investment losses include both realized and unrealized losses on investments. Prior to the adoption of SFAS 159, net realized and unrealized investment losses included realized losses on investments and other-than-temporary impairment charges. |
41
PartnerRe Ltd. |
Diluted Book Value per Common Share - Rollforward |
(in millions of U.S. dollars or shares, except per share data) |
(Unaudited) |
As of and for the year ended | As of and for the year ended | ||||||||||||||
December 31, 2007 | December 31, 2006 | ||||||||||||||
Common shareholders' equity | Diluted book value per common share | Common shareholders' equity | Diluted book value per common share | ||||||||||||
Common shareholders' equity / diluted book value per common share at beginning of period | $ | 3,266 | $ | 56.07 | $ | 2,573 | $ | 44.57 | |||||||
Technical result | 845 | 14.69 | 707 | 12.23 | |||||||||||
Other operating expenses | (327) | (5.69) | (310) | (5.36) | |||||||||||
Net investment income | 523 | 9.09 | 449 | 7.77 | |||||||||||
Other, net | (86) | (1.50) | (61) | (1.04) | |||||||||||
Operating income tax expense | (98) | (1.70) | (94) | (1.64) | |||||||||||
Preferred dividends | (35) | (0.60) | (35) | (0.60) | |||||||||||
Operating earnings | 822 | 14.29 | 656 | 11.36 | |||||||||||
Net realized investment (losses) gains, net of tax | (56) | (0.98) | 47 | 0.80 | |||||||||||
Interest in (losses) earnings of equity investments, net of tax | (83) | (1.44) | 12 | 0.21 | |||||||||||
Net income available to common shareholders | 683 | 11.87 | 715 | 12.37 | |||||||||||
Common share dividends | (96) | (1.72) | (91) | (1.60) | |||||||||||
Change in currency translation adjustment | 129 | 2.24 | 56 | 0.97 | |||||||||||
Change in net unrealized gains or losses on investments, net of tax | 38 | 0.66 | (20) | (0.35) | |||||||||||
(Repurchase) issuance of common shares, net | (213) | (3.71) | 40 | 0.70 | |||||||||||
Other, net | (5) | (0.08) | (7) | (0.13) | |||||||||||
Impact of change in number of common and common share equivalents outstanding | n/a | 2.63 | n/a | (0.46) | |||||||||||
Common shareholders' equity / diluted book value per common share at end of period | $ | 3,802 | $ | 67.96 | $ | 3,266 | $ | 56.07 |
42