EXHIBIT 99.1
PartnerRe
News Release
PartnerRe Ltd. Reports First Quarter 2003 Earnings
o First Quarter Net Income of $2.23 per share; Operating Earnings of
$1.51 per share
o Net Premium Growth of 50% to more than $1.2 billion
o Annualized Net Income ROE of 26%; Annualized Operating ROE of 18%
o Book Value per Share Grew to $35.54
PEMBROKE, Bermuda, May 5, 2003 -- PartnerRe Ltd. (NYSE:PRE) today reported
results for the first quarter of 2003.
PartnerRe President & Chief Executive Officer, Patrick Thiele, commented, "We
had an excellent first quarter, with strong growth in all segments and results
in line with the ambitious targets we have set for ourselves. We achieved an
annualized operating return on equity of 18% while maintaining a superior
balance sheet."
For the three months ended March 31, 2003, net income was $124.6 million, or
$2.23 per share on a fully diluted basis. Net income includes a net after-tax
realized gain on investments of $38.5 million or $0.72 per share. Net income
for the first quarter of 2002, including a net after-tax realized loss on
investments of $8.5 million, was $63.3 million or $1.13 per share.
Operating earnings for the first quarter 2003 were $81.2 million or $1.51 per
share on a fully diluted basis. Operating earnings exclude net realized
investment gains or losses and are calculated after payment of preferred
dividends. This compares to operating earnings of $66.8 million, or $1.29 per
share for the first quarter of 2002.
PartnerRe Ltd. Telephone +1 441 292 0888
Chesney House, Fax +1 441 292 6080
96 Pitts Bay Road www.partnerre.com
Pembroke, Bermuda HM 08
Summary unaudited consolidated financial data for the period is set out below.
- -------------------------------------------------------------------------------
U.S.$ thousands (except per share amounts) Three months ended March 31
- -------------------------------------------------------------------------------
2003 2002
- -------------------------------------------------------------------------------
Net Premiums Written $1,234,747 $824,473
- -------------------------------------------------------------------------------
Net Premiums Earned $806,237 $479,474
- -------------------------------------------------------------------------------
Non-life Combined Ratio 94.6% 92.6%
- -------------------------------------------------------------------------------
Net Income $124,632 $63,255
- -------------------------------------------------------------------------------
Net Income per share (a) $2.23 $1.13
- -------------------------------------------------------------------------------
Net Operating Earnings (a) $81,182 $66,787
- -------------------------------------------------------------------------------
Net Operating Earnings per share (a) $1.51 $1.29
- -------------------------------------------------------------------------------
(a) Net income per share is defined as net income available to common
shareholders divided by the number of fully diluted shares. Net
income available to common shareholders is defined as net income less
preferred dividends. Net operating earnings is net income available
to common shareholders excluding after-tax net realized gains/losses
on investments. Per share results are on a fully-diluted basis.
Total revenues increased 72% in the quarter to $911.4 million, including $806.2
million of net premiums earned, net investment income of $61.7 million, and net
realized investment gains of $41.0 million. For the first quarter of 2002,
revenues were $531.0 million, with $479.5 million of net premiums earned, net
investment income of $58.7 million, and net realized investment losses of $7.9
million.
At March 31, 2003, total assets were $10.0 billion, total capitalization was
$2.8 billion, and total shareholders' equity was $2.2 billion. This compares to
total assets of $8.7 billion, total capitalization of $2.7 billion, and total
shareholders' equity of $2.1 billion at December 31, 2002. Book value per
common share was $35.54 on a fully diluted basis, compared to $34.02 per share
at December 31, 2002.
Separately, the Company announced that the Board of Directors declared a
regular quarterly dividend of $0.29 per common share. The dividend will be
payable on June 2, 2003, to common shareholders of record on May 23, 2003, with
the stock trading ex-dividend commencing May 21, 2003.
PartnerRe Ltd. Telephone +1 441 292 0888
Chesney House, Fax +1 441 292 6080
96 Pitts Bay Road www.partnerre.com
Pembroke, Bermuda HM 08
Results of Operations
"Growth in net written premium was significant in the first quarter of 2003,"
Mr. Thiele said, "representing a 50% increase over the first quarter of 2002
and the first time we have exceeded the $1 billion level during a quarter. This
was the result of several factors, including our superior ratings and strong
market presence, good pricing across all our lines of business, a positive
foreign exchange impact and the timing of renewals. We continue to expect
however that the growth rate for the year will be in the range of 25% to 30%.
"Our Non-Life segment performed well, with a combined ratio of 94.6%," Mr.
Thiele continued. "We are also taking advantage of dislocations in the life
market and, as a result, life premiums are up by more than 100% compared to
last year.
"We continue to generate strong cash flow from our reinsurance operations, with
cash flow from operations of $234 million this quarter, contributing to
meaningful growth in invested assets."
Results by Segment
The Non-Life segment reported net premiums written of $1.2 billion for the
quarter, an increase of 47%, reflecting growth in substantially all lines. The
combined ratio was 94.6% for the first quarter compared to 92.6% for the same
period in 2002. The Non-Life technical result increased 31% to $88 million.
The U.S. Property and Casualty business, which represented approximately 26% of
total net premiums written for the quarter, reported net premiums written of
$317.7 million, an 82% increase over the prior year's first quarter, with
substantial growth in specialty casualty lines. Net premiums earned increased
63% during the quarter when compared to the same period in 2002. The technical
ratio for this segment was 96.0%, compared to 93.3% in the first quarter of
2002, reflecting the significant increase in specialty casualty premium earned,
which the Company is reserving to a technical ratio of 100%.
The Global (Non-U.S.) Property and Casualty business, which represented
approximately 24% of total net premiums written, reported net premiums written
of $304.9 million for the first quarter of 2003, a 52% increase over the prior
year, with the strongest growth in property business. Net premiums earned
during the quarter increased 67%. The technical ratio for this segment was
92.2% compared to 97.4% for the same period in 2002, reflecting improvements in
all lines.
PartnerRe Ltd. Telephone +1 441 292 0888
Chesney House, Fax +1 441 292 6080
96 Pitts Bay Road www.partnerre.com
Pembroke, Bermuda HM 08
The Worldwide Specialty business, which represented approximately 43% of total
net premiums written for the quarter, reported net premiums written of $530.3
million for the first quarter, a 30% increase over the prior year period. Net
premiums earned increased 62% during the quarter. This unit's technical ratio
of 80.7%, compared to 72.7% for the first quarter of 2002, reflects strong
results across most lines, in particular engineering, specialty casualty,
catastrophe and aviation, offset by the impact of additional claims on the
European floods of 2002.
The Life segment, which markets coverages primarily in Europe, Canada and Latin
America, and represented approximately 7% of total net premiums written,
reported net premiums written of $81.8 million for the quarter, as
compared to $40.4 million for the first quarter 2002, representing an increase
of more than 100%. This reflects both new business growth as well as the
continued maturing of existing treaties in all three lines - life, annuity and
health. The net technical result for the quarter was a gain of $5.0 million,
compared to a gain of $2.9 million for the comparable period in 2002.
Commentary and Outlook
"As PartnerRe enters its tenth year in operation, the Company has grown into
one of the world's leading reinsurers and is well positioned to take advantage
of virtually all market opportunities," Mr. Thiele said. "Our growing
franchise, strong ratings, products and coverages are in increased demand
across the globe.
"The superior results achieved this quarter - in particular the 18% annualized
operating return on beginning equity and 22% increase in operating income - are
clear indicators that PartnerRe is benefiting from the increasing flight to
quality."
Mr. Thiele concluded, "We remain confident that we will achieve our previously
communicated plan for 2003 of at least $3.3 billion in premiums written, an
operating return on equity of at least 17%, and minimum operating earnings per
share of $5.70, barring any large catastrophes or unusual loss events."
------------------------------
The Company uses operating earnings, diluted operating earnings per share and
operating return on beginning equity to measure performance, as these measures
focus on the underlying fundamentals of our operations without the influence of
realized gains and losses from the sale of investments, which is driven by the
timing of the disposition of investments and not by our operating performance.
For planning purposes, the Company does not anticipate realized investment
gains or losses. The Company also uses technical ratio and
PartnerRe Ltd. Telephone +1 441 292 0888
Chesney House, Fax +1 441 292 6080
96 Pitts Bay Road www.partnerre.com
Pembroke, Bermuda HM 08
technical result as measures of underwriting performance. These metrics exclude
overhead expenses. All references to per share amounts in this press release
are on the basis of fully diluted shares.
------------------------------
PartnerRe Ltd. is a leading global reinsurer, providing multi-line reinsurance
to insurance companies. Risks reinsured include property, casualty, motor,
agriculture, marine, aviation/space, catastrophe, credit/surety,
engineering/energy, marine, special risks, other lines, life/annuity and
health. At year-end 2002, total revenues were $2.7 billion. As of March 31,
2003, total assets were $10.0 billion, total capitalization was $2.8 billion
and total shareholders' equity was $2.2 billion.
PartnerRe on the Internet: www.partnerre.com
Forward-looking statements contained in this press release are based on the
Company's assumptions and expectations concerning future events and financial
performance and are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Such statements are subject to
significant business, economic and competitive risks and uncertainties that
could cause actual results to differ materially from those reflected in the
forward-looking statements. PartnerRe's forward-looking statements could be
affected by numerous foreseeable and unforeseeable events and developments such
as exposure to catastrophe or other large losses, adequacy of reserves, risks
associated with implementing business strategies, levels and pricing of new and
renewal business achieved, credit, interest, currency and other risks
associated with the Company's investment portfolio and other factors identified
in the Company's filings with the Securities and Exchange Commission. In light
of the significant uncertainties inherent in the forward-looking information
contained herein, readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the dates on which they are
made. The Company disclaims any obligation to publicly update or revise any
forward-looking information or statements.
Contacts: PartnerRe Ltd. Citigate Sard Verbinnen
(441) 292-0888 (212) 687-8080
Investor Contact: Robin Sidders Jim Barron/Hallie Bozzi
Media Contact: Celia Powell
PartnerRe Ltd. Telephone +1 441 292 0888
Chesney House, Fax +1 441 292 6080
96 Pitts Bay Road www.partnerre.com
Pembroke, Bermuda HM 08
PartnerRe Ltd.
Consolidated Statements of Operations and Comprehensive Income
(Expressed in thousands of U.S dollars, except per share data)
For the three For the three
months ended months ended
March 31, March 31,
2003 2002
(Unaudited) (Unaudited)
Revenues
Gross premiums written $ 1,261,590 $ 846,852
============ ============
Net premiums written $ 1,234,747 $ 824,473
Increase in unearned premiums (428,510) (344,999)
------------ ------------
Net premiums earned 806,237 479,474
Net investment income 61,679 58,704
Net realized investment gains (losses) 40,952 (7,881)
Other income 2,491 675
------------ ------------
Total Revenues 911,359 530,972
------------ ------------
Expenses
Losses and loss expenses including life policy benefits 555,997 311,854
Acquisition costs 169,722 104,047
Other operating expenses 52,000 36,936
Interest expense 3,196 3,196
Net foreign exchange (gains) losses (3,080) 3,603
------------ ------------
Total Expenses 777,835 459,636
------------ ------------
Income before distributions related to Trust Preferred
and Mandatorily Redeemable Preferred Securities and taxes 133,524 71,336
Distributions related to Trust Preferred and Mandatorily
Redeemable Preferred Securities 6,815 6,815
Income tax expense 2,077 1,266
------------ ------------
Net income $ 124,632 $ 63,255
============ ============
Preferred dividends $ 5,000 $ 5,000
============ ============
Operating earnings available to common shareholders $ 81,182 $ 66,787
============ ============
Comprehensive income $ 102,700 $ 31,894
============ ============
Per Share Data:
Earnings per common share:
Basic operating earnings $ 1.55 $ 1.33
Net realized investment gains (losses), net of tax 0.73 (0.17)
------------ ------------
Basic net income $ 2.28 $ 1.16
============ ============
Weighted average number of common shares
outstanding 52,403.2 50,202.6
Diluted operating earnings $ 1.51 $ 1.29
Net realized investment gains (losses), net of tax 0.72 (0.16)
------------ ------------
Diluted net income $ 2.23 $ 1.13
============ ============
Weighted average number of common and
common equivalent shares outstanding 53,738.6 51,687.5
6
PartnerRe Ltd.
Consolidated Balance Sheets
(Expressed in thousands of U.S. dollars, except per share data
and parenthetical share data)
March 31, December 31,
2003 2002
(Unaudited) (Audited)
Assets
Investments and cash
Fixed maturities, at fair value
(amortized cost: 2003, $4,208,828; 2002, $3,998,382) $ 4,331,177 $ 4,145,594
Short-term investments, at fair value
(amortized cost: 2003, $15,271; 2002, $3,787) 15,483 3,801
Equities, at fair value
(cost: 2003, 502,857; 2002, $493,893) 470,772 473,163
Trading securities, at fair value (cost: 2003, $71,823; 2002, $72,998) 74,301 75,284
Cash and cash equivalents, at fair value, which approximates
amortized cost 1,084,888 710,640
Other invested assets 4,121 3,630
------------ ------------
Total investments and cash 5,980,742 5,412,112
Accrued investment income 82,285 66,980
Reinsurance balances receivable 1,440,641 994,502
Reinsurance recoverable on paid and unpaid losses 221,504 216,681
Funds held by reinsured companies 745,504 726,722
Deferred acquisition costs 358,253 304,873
Deposit assets 453,672 359,606
Taxes recoverable 105,031 100,002
Goodwill 429,519 429,519
Other 133,541 126,977
------------ ------------
Total Assets $ 9,950,692 $ 8,737,974
============ ============
Liabilities
Unpaid losses and loss expenses $ 3,846,402 $ 3,658,416
Policy benefits for life and annuity contracts 869,112 815,978
Unearned premiums 1,327,349 869,925
Funds held under reinsurance treaties 32,866 32,359
Deposit liabilities 462,776 356,091
Long-term debt 220,000 220,000
Net payable for securities purchased 500,286 190,110
Accounts payable, accrued expenses and other 131,873 117,913
------------ ------------
Total Liabilities 7,390,664 6,260,792
------------ ------------
Trust Preferred and Mandatorily Redeemable Preferred Securities 400,000 400,000
------------ ------------
Shareholders' Equity
Common shares (par value $1.00, issued and outstanding:
2003, 52,410,728; 2002, 52,375,938) 52,411 52,376
Preferred shares (par value $1.00, issued and outstanding: 2003, 10,000,000;
2002, 10,000,000; aggregate liquidation preference, $250,000,000) 10,000 10,000
Additional paid-in capital 977,989 977,714
Deferred compensation (227) (261)
Accumulated other comprehensive income:
Net unrealized gains on investments, net of tax 87,441 119,605
Currency translation adjustment (20,588) (30,820)
Retained earnings 1,053,002 948,568
------------ ------------
Total Shareholders' Equity 2,160,028 2,077,182
============ ============
Total Liabilities, Trust Preferred and Mandatorily Redeemable
Preferred Securities and Shareholders' Equity $ 9,950,692 $ 8,737,974
============ ============
Shareholders' Equity Per Common Share $ 36.44 $ 34.89
============ ============
Diluted Book Value Per Common and Common Equivalent
Share (assuming exercise of warrants and stock options) $ 35.54 $ 34.02
============ ============
Number of Diluted Common Shares Outstanding 53,746.1 53,702.3
============ ============
7
PartnerRe Ltd.
Supplementary Information
(in millions of U.S. dollars)
(Unaudited)
For the three For the three
months ended months ended
March 31, March 31,
2003 2002
SEGMENT INFORMATION
NON-LIFE SEGMENT
US Property and Casualty
Net premiums written $ 317.7 $ 174.2
Net premiums earned 195.8 120.5
Loss and loss expense ratio(1) 70.3% 66.3%
Acquisition expense ratio(2) 25.7 27.0
--------- ---------
Technical ratio(3) 96.0 93.3
Global (Non-US) Property and Casualty
Net premiums written $ 304.9 $ 200.8
Net premiums earned 201.8 121.2
Loss and loss expense ratio(1) 68.2% 73.9%
Acquisition expense ratio(2) 24.0 23.5
--------- ---------
Technical ratio(3) 92.2 97.4
Worldwide Specialty
Net premiums written $ 530.3 $ 409.1
Net premiums earned 333.5 205.3
Loss and loss expense ratio(1) 62.2% 55.9%
Acquisition expense ratio(2) 18.5 16.8
--------- ---------
Technical ratio(3) 80.7 72.7
TOTAL NON-LIFE SEGMENT
Gross premiums written $ 1,174.6 $ 803.4
Net premiums written 1,152.9 784.1
Net premiums earned 731.1 447.0
Loss and loss expense ratio(1) 66.0% 63.6%
Acquisition expense ratio(2) 22.0 21.4
--------- ---------
Technical ratio(3) 88.0 85.0
Other overhead expense ratio(4) 6.6 7.6
--------- ---------
Combined ratio(5) 94.6% 92.6%
========= =========
LIFE SEGMENT
Gross premiums written 87.0 $ 43.4
Net premiums written 81.8 40.4
Net premiums earned 75.1 32.6
Technical result (6) $ (7.2) $ (3.5)
Allocated investment income 12.2 6.4
--------- ---------
Net technical result $ 5.0 $ 2.9
========= =========
(1) Loss and loss expense ratio is obtained by dividing losses and loss
adjustment expenses by net premiums earned.
(2) Acquisition expense ratio is obtained by dividing acquisition costs by net
premiums earned.
(3) Technical ratio is defined as the sum of the losses and loss adjustment
expenses ratio and the acquisition expense ratio.
(4) Other overhead expense ratio is obtained by dividing other operating
expenses by net premiums earned.
(5) Combined ratio is the sum of the loss and loss expense ratio and the
expense ratio. The expense ratio is defined as the sum of the acquisition
expense ratio and the other overhead expense ratio.
(6) Technical result is defined as net premiums earned less loss and loss
adjustment expenses and acquisition costs
8
PartnerRe Ltd.
Supplementary Information
(Unaudited)
For the three For the three
months ended months ended
March 31, March 31,
2003 2002
Distribution of Net Premiums Written by
Line of Business:
Non-Life
Property and Casualty
Property 19% 19%
Casualty 20 15
Motor 11 12
Worldwide Specialty
Agriculture 2 4
Aviation/Space 5 5
Catastrophe 18 23
Credit/Surety 3 4
Engineering/Energy 6 3
Marine 3 3
Special Risk 6 7
Other - -
Life 7 5
Geographic Distribution of Gross Premiums Written:
Europe 44% 39%
North America 42 45
Asia, Australia and New Zealand 9 10
Latin America and the Caribbean 4 5
Africa 1 1
As at
March 31,
2003
Credit Ratings (Financial Strength Ratings):
Standard & Poor's AA
Moodys Aa3
A.M. Best A+
As at
March 31, December 31,
2003 2002
(in thousands of U.S. dollars) (in thousands of U.S. dollars)
Capital Structure:
Debt $ 220,000 8% $ 220,000 8%
Trust Preferred 200,000 7 200,000 7
Series B Cumulative Redeemable Preferred Shares (PEPS) 200,000 7 200,000 7
8% Series A Cumulative Preferred Shares 242,163 9 242,163 9
Common Shareholders' Equity 1,917,865 69 1,835,019 69
------------ ----------- ------------- ---------
Total Capital $ 2,780,028 100% $ 2,697,182 100%
============ =========== ============= =========
9
PartnerRe Ltd.
Supplementary Information
(Unaudited)
As at As at
March 31, December 31,
2003 2002
Investment Portfolio:
Credit Quality AAA 54% 56%
AA 9 13
A 19 16
BBB 11 9
Below Investment Grade 7 6
By Class U.S. Government 10% 12%
U.S. Mortgage/Asset Backed 15 16
U.S. Corporates 23 22
Foreign Fixed Income 28 27
Equities and Equity Substitutes 13 13
Cash (net of pending transactions) 11 10
Expected average duration 3.3 Yrs 3.3 Yrs
Average yield to maturity at market 3.5% 3.5%
(fixed income securities and cash)
Average Credit Quality AA AA
For the three For the three
months ended months ended
March 31, March 31,
2003 2002
(in thousands of U.S. dollars except per share data)
Reconciliation of Net income to Operating earning
available to common shareholders:
Net income $ 124,632 $ 63,255
Less:
Net realized investment gains (losses), net of tax 38,450 (8,532)
Dividends to preferred shareholders 5,000 5,000
----------- -----------
Operating income available to common shareholders $ 81,182 $ 66,787
=========== ===========
Diluted net income per common share $ 2.23 $ 1.13
Less:
Net realized investment gains (losses), net of tax, per common share 0.72 (0.16)
----------- -----------
Diluted operating earning per common share $ 1.51 $ 1.29
=========== ===========
Return on beginning common shareholders' equity
calculated with net income 26.2% 15.6%
Less:
Net realized investment gains (losses) net of tax 8.4 (2.2)
----------- -----------
Operating return on equity 17.8% 17.8%
=========== ===========
10
PartnerRe Ltd.
Supplementary Information
(Unaudited)
As at As at
March 31, March 31
2003 2002
Reconciliation of technical result to net income
Non-Life technical result $ 87.7 $ 67.1
Life technical result (7.2) (3.5)
--------- ---------
Total technical result 80.5 63.6
Other operating expenses (52.0) (36.9)
Net investment income 61.7 58.7
Other income 2.5 0.7
Interest expense (3.2) (3.2)
Net foreign exchange gains (losses) 3.1 (3.6)
Income tax recovery (expense) on operating income 0.4 (0.7)
Distribution related to Trust Preferred and Mandatorily Redeemable Preferred Shares (6.8) (6.8)
Net realized investment gains (losses), net of tax 38.4 (8.5)
--------- ---------
Net income $ 124.6 $ 63.3
--------- ---------
11