EX-99.1 2 dp11635_ex9901.htm
 
Exhibit 99.1
 
News Release
  
 
PartnerRe Ltd. Reports Third Quarter and Nine Month 2008 Results

§
Third Quarter Operating Earnings per share of $2.27; Net Loss per share of $3.01
§
Third Quarter Annualized Operating ROE of 13%; Annualized Net Income ROE of (17)%
§
Nine Month Operating Earnings per share of $7.70; Net Loss per share of $1.38
§
Nine Month Annualized Operating ROE of 15%; Annualized Net Income ROE of (3)%
§
Book Value of $65.38 per share, down 4% year-to-date, and flat year over year

PEMBROKE, Bermuda, October 22, 2008 -- PartnerRe Ltd. (NYSE:PRE) today reported a net loss of $151.7 million, or $3.01 per share on a fully diluted basis for the third quarter of 2008. This net loss includes net after-tax realized and unrealized losses on investments of $281.1 million, or $5.27 per share. Since the adoption by the Company of FAS 159 as of January 1, 2008, the Company presents on its Income Statement realized and unrealized changes in the market values of investments. The Company incurred pre-tax realized losses of $169.3 million in the third quarter of 2008. Separately, the value of the Company’s $11.5 billion cash and investment portfolio declined by $154.9 million on pre-tax unrealized losses primarily due to the increase in credit spreads during the quarter. The net loss for the third quarter 2008 includes pre-tax losses of $203 million, net of reinstatement premiums, relating to Hurricanes Ike and Gustav. Net income for the third quarter of 2007 was $262.9 million, or $4.44 per share, including net after-tax realized gains on investments of $2.8 million, or $0.05 per share. Comparable net income numbers for 2007 do not include the impact of FAS 159. Operating earnings for the third quarter of 2008 were $121.3 million, or $2.27 per share on a fully diluted basis. This compares to operating earnings of $274.2 million, or $4.78 per share, for the third quarter of 2007. Operating earnings exclude net after-tax realized and unrealized investment gains and losses and net after-tax interest in results of equity investments, and are calculated after payment of preferred dividends. All references to per share amounts in the text of this press release are on a fully diluted basis.

Commenting on the third quarter and nine month 2008 results, PartnerRe President & Chief Executive Officer Patrick Thiele said, “In a quarter marked by large hurricane losses and extreme volatility in the financial markets, PartnerRe delivered a 13% operating return on beginning shareholders’ equity. In addition, year-over-year, we held GAAP book value per share flat. Our results this quarter and for the year-to-date underscore our excellent risk management, the balance and diversification we have achieved in our underwriting and investment operations, and the strength and resilience of our balance sheet.”
 
 
 
PartnerRe Ltd.
Wellesley House, 5th Floor
90 Pitts Bay Road
Pembroke, Bermuda HM 08
Telephone +1 441 292 0888
Fax +1 441 292 6080
www.partnerre.com
 
  
 
 
 
News Release
 
Summary unaudited consolidated financial data for the period is set out below.

U.S.$ thousands (except per share amounts and ratios)
Three months ended September 30
Nine months ended September 30
 
2008
2007
2008
2007
Net Premiums Written
$869,194
$873,474
$3,237,027
$3,042,733
Net Premiums Earned
$1,078,459
$1,056,395
$2,943,752
$2,787,713
Non-life Combined Ratio
95.5%
74.2%
91.4%
80.9%
Net (Loss) Income
$(151,719)
$262,921
$(48,723)
$537,209
Net (Loss) Income per share (a)
$(3.01)
$4.44
$(1.38)
$8.83
Operating Earnings (a)
 $121,331
 $274,198
 $415,373
 $565,073
Operating Earnings per share (a)
$2.27
$4.78
$7.70
$9.76

(a)
Net income/(loss) per share is defined as net income/(loss) available to common shareholders divided by the weighted average number of fully diluted shares outstanding for the period. Net income/(loss) available to common shareholders is defined as net income/(loss) less preferred dividends. Operating earnings/(loss) is defined as net income/(loss) available to common shareholders excluding after-tax net realized and unrealized gains/losses on investments and after-tax interest in earnings/losses of equity investments. Operating earnings/(loss) per share is defined as operating earnings/(loss) divided by the weighted average number of fully diluted shares outstanding for the period. As the effect of dilutive securities would have been anti-dilutive in the three months and nine months ended September 30, 2008, the fully diluted per share figures for these periods were compiled using the basic weighted average number of common shares outstanding.

Net premiums written for the third quarter of 2008 were $869.2 million, compared to $873.5 million in the third quarter of 2007. Total revenues for the third quarter 2008 were $896.6 million, compared to $1.2 billion in the third quarter of 2007, and included $1.1 billion of net premiums earned, which were up 2% over the third quarter of 2007; net investment income of $146.1 million – an increase of 8% over the third quarter of 2007; and pre-tax net realized and unrealized investment losses of $324.2 million as compared to pre-tax net realized investment losses of $3.1 million for the third quarter of 2007.

For the first nine months of 2008, net premiums written were $3.2 billion, up 6% over the first nine months of 2007. The net loss was $48.7 million or $1.38 per share for the nine months ended September 30, 2008. Net loss for the period includes net after-tax realized and unrealized losses on investments of $491.3 million or $9.10 per share. Operating earnings were $415.4 million, or $7.70 per share. Net income for the first nine months of 2007 was
 
 
PartnerRe Ltd.
Wellesley House, 5th Floor
90 Pitts Bay Road
Pembroke, Bermuda HM 08
Telephone +1 441 292 0888
Fax +1 441 292 6080
www.partnerre.com
 
  
 
 
News Release
  
 
$537.2 million or $8.83 per share including net after-tax realized losses of $37.3 million, or $0.65 per share. Operating earnings for the same period in 2007 were $565.1 million or $9.76 per share. Total revenues for the first nine months of 2008 were $2.8 billion, including $2.9 billion of net premiums earned, net investment income of $428.6 million, and pre-tax net realized and unrealized investment losses of $595.3 million. Total revenues for the same period in 2007 were $3.1 billion, including $2.8 billion of net premiums earned, net investment income of $385.5 million, and pre-tax net realized investment losses of $56.0 million.

During the third quarter of 2008, the Company repurchased 1.0 million common shares at a total cost of approximately $70.2 million. To date this year, the Company has repurchased 1,532,460 common shares at a total cost of approximately $110.0 million. The Company has approximately 5 million common shares remaining under its current repurchase authorization.

During the third quarter of 2008, the Company announced the start of the valuation period for its maturing forward sale agreement. As of September 30, 2008, 252,474 common shares were sold for total proceeds of $16.9 million.

Separately, the Company announced today that its Board of Directors declared a quarterly dividend of $0.46 per common share. The dividend will be payable on December 1, 2008, to common shareholders of record on November 21, 2008, with the stock trading ex-dividend commencing November 19, 2008.

Results by Segment

Hurricanes Ike and Gustav impacted the technical results of all Non-Life sub-segments and the Capital Markets Group during the quarter. In total, the third quarter 2008 results contain approximately $198 million pre-tax operating losses, net of reinstatement premiums, related to Hurricanes Ike and Gustav.

The Non-Life segment reported net premiums written of $723 million for the third quarter, flat with the same period in 2007. The combined ratio was 95.5% for the third quarter of 2008 compared to 74.2% for the same period in 2007, with the deterioration primarily reflecting the impact of Hurricanes Ike and Gustav. The Non-Life technical result was $97 million for the third quarter of 2008 compared to $287 million for the prior year period. For the first nine months in 2008, Non-Life net premiums written were $2.8 billion, up 6% from the same period in 2007. The nine month 2008 technical result was $388 million, compared
 
 
PartnerRe Ltd.
Wellesley House, 5th Floor
90 Pitts Bay Road
Pembroke, Bermuda HM 08
Telephone +1 441 292 0888
Fax +1 441 292 6080
www.partnerre.com
 
  
 
 
News Release
  
 
to $608 million for the same period in 2007. The combined ratio for the nine month period in 2008 was 91.4% compared to 80.9% for the first nine months of 2007.

The U.S. business, which represented 30% of total net premiums written for the quarter, reported net premiums written of $264 million for the third quarter of 2008, compared with $279 million for last year’s third quarter. Net premiums earned were $276 million in the third quarter of 2008, flat with the same period in 2007. The technical ratio for this sub-segment was 101.1% for the 2008 third quarter, including 8.6 points relating to Hurricanes Ike and Gustav, compared to 81.9% in the third quarter of 2007. The technical result for the third quarter 2008 was a loss of $3 million, compared to income of $49 million for the same period in 2007. For the first nine months of 2008, net premiums written were $841 million, up 5% from the first nine months of 2007. The nine month 2008 technical ratio was 97.6%, compared to 84.9% for the comparable period in 2007. The technical result for the nine months was $19 million compared to $111 million for the same period in 2007.

The Global (Non-U.S.) P&C business, which represented 16% of total net premiums written for the quarter, reported net premiums written of $137 million for the third quarter of 2008, compared to $151 million for the same period in 2007. Net premiums earned during the quarter were $195 million, up 1% from the third quarter 2007. The technical ratio for this sub-segment was 74.5% for the third quarter of 2008 compared to 94.5% for the same period in 2007, reflecting both low large loss activity and lower than expected reported losses, leading to favorable reserve development in the current quarter. The technical result for the third quarter 2008 was $50 million, compared to $11 million for the same period in 2007. For the first nine months of 2008, net premiums written were up 5% to $642 million. The nine month technical ratio was 82.3%, compared to 96.0% in the comparable period 2007. The technical result for the nine months was $103 million compared to $22 million in the comparable period 2007.

The Global (Non-U.S.) Specialty business, which represented 32% of total net premiums written for the quarter, reported net premiums written of $274 million for the third quarter of 2008, up 10% from the third quarter of 2007. Net premiums earned were up 6% to $290 million for the quarter, compared to the same period in 2007. This sub-segment’s technical ratio for the quarter was 88.6%, including 9.1 points relating to Hurricanes Ike and Gustav, net of reinstatement premiums, compared to 68.2% for the third quarter of 2007. The technical result for the third quarter 2008 was $33 million, compared to $87 million for the same period in 2007. For the nine-month period, net premiums written were up 11% to $898 million. The nine-month technical ratio was 86.8%, compared to 68.8% in 2007. The technical result for the nine months was $103 million in 2008 compared to $237 million for the comparable period in 2007.
 
 
PartnerRe Ltd.
Wellesley House, 5th Floor
90 Pitts Bay Road
Pembroke, Bermuda HM 08
Telephone +1 441 292 0888
Fax +1 441 292 6080
www.partnerre.com
 
  
 

News Release
  
 
The Catastrophe business, which represented approximately 6% of total net premiums written for the quarter, reported net premiums written of $48 million for the third quarter of 2008, compared to $50 million for the prior year period. Net premiums earned were $159 million for the third quarter, compared to $170 million in the same period in 2007. The total loss in the third quarter 2008 relating to Hurricanes Ike and Gustav was $131.6 million, net of reinstatement premiums, or 93.8% of net premiums earned. This sub-segment’s technical ratio for the third quarter 2008 was 89.5%, reflecting the significant impact of the hurricanes, compared with 17.9% for the third quarter 2007. The technical result for the third quarter 2008 was $17 million, compared to $140 million for the same period in 2007. For the nine-month period, net premiums written were flat with the first nine months of 2007 at $391 million. The nine-month technical ratio was 45.7%, compared to 27.8% in 2007. The technical result for the nine months was $163 million in 2008 compared to $238 million in the comparable period in 2007.

The Life segment, which represented 16% of total net premiums written for the quarter, reported net premiums written of $141 million for the third quarter, flat with the third quarter of 2007. The allocated underwriting result was $9 million, compared to $nil in the third quarter of 2007. For the first nine months of 2008, net premiums written increased 5% to $448 million, with an allocated underwriting result of $21 million, up from $11 million for the first nine months of 2007.

The Company’s capital markets and investment activities are reported under the heading of “Corporate and Other”. Within Corporate and Other, capital markets and investment activities contributed $119 million to pre-tax operating income in the third quarter and $368 million to pre-tax operating income in the first nine months of 2008. Separately, following the adoption of FAS 159, with changes in the unrealized market values of invested assets recorded in net income, capital markets and investment activities contributed pre-tax non-operating losses of $324 million and $595 million in the third quarter and first nine months of 2008, respectively.

Balance Sheet Items

At September 30, 2008, total assets were $16.3 billion as compared to $16.0 billion at December 31, 2007. Over the trailing 12 month period, total investments and cash were flat at $11.5 billion. Gross Non-Life loss and loss expense reserves increased 5% year over year to $7.5 billion at September 30, 2008. During the third quarter of 2008, the Company’s estimate of Non-Life reserves for prior accident years developed favorably by $103 million. The overall third quarter prior year reserve development in the Non-Life segment includes
 
 
PartnerRe Ltd.
Wellesley House, 5th Floor
90 Pitts Bay Road
Pembroke, Bermuda HM 08
Telephone +1 441 292 0888
Fax +1 441 292 6080
www.partnerre.com
 
  
 
 
News Release
  
 
net favorable development in all sub-segments, with $16 million in the U.S. sub-segment, $41 million in the Global (Non-U.S.) P&C sub-segment, $21 million in the Global (Non-U.S.) Specialty sub-segment, and $25 million in the Catastrophe sub-segment. In the third quarter of 2007, Non-Life reserves for prior years developed favorably by $89 million. Policy benefits for life and annuity contracts decreased by 6% year over year to $1.5 billion at September 30, 2008. During the third quarter of 2008, the Company’s estimate of Life reserves for prior years developed adversely by $5 million, compared to adverse development of $9 million in the third quarter of 2007.

At September 30, 2008, total capital was $5.0 billion, and total shareholders’ equity was $4.1 billion. This compares to total capital of $5.2 billion, and total shareholders’ equity of $4.3 billion at December 31, 2007. Book value per common share at September 30, 2008 was $65.38 on a fully diluted basis compared to $67.96 per diluted share at December 31, 2007.

For additional information, the Company has posted a third quarter 2008 financial supplement on its website www.partnerre.com in the Investor Relations section on the Financial Reports page under Supplementary Financial Data.


Commentary and Outlook

Mr. Thiele said, “2008 has been an extraordinary year on many levels.We are currently in the midst of one of the most severe financial crises since the Great Depression. Despite this, PartnerRe posted an operating return on beginning equity of 15% for the first nine months of the year. We are optimistic that we will finish the full year 2008 with an operating ROE in excess of our long-term target of 13%, barring unusual large losses.”

“Looking forward we expect that demand for reinsurance will increase as insurers look to their reinsurers for capital relief and volatility management,” Mr. Thiele said. “We also believe that their preference will be to work with only the highest quality reinsurers such as PartnerRe. PartnerRe has the risk appetite and the financial strength and stability to respond to an improving marketplace and provide the consistent capacity that our clients expect from us.”

 
The Company uses operating earnings, diluted operating earnings per share and annualized operating return on beginning common shareholders’ equity to measure performance, as these measures focus on the underlying fundamentals of our operations without the impact of net realized and unrealized gains/losses on investments, net of tax, nor the interest in earnings/losses of equity
 
 
PartnerRe Ltd.
Wellesley House, 5th Floor
90 Pitts Bay Road
Pembroke, Bermuda HM 08
Telephone +1 441 292 0888
Fax +1 441 292 6080
www.partnerre.com
 
  
 
 
News Release
  
 
investments, net of tax, where the Company does not control the investee companies’ activities. The Company uses technical ratio and technical result as measures of underwriting performance. The technical ratio is defined as the sum of the loss and acquisition ratios. These metrics exclude other operating expenses. The Company also uses combined ratio to measure results for the Non-Life segment. The combined ratio is the sum of the technical and other operating expense ratios. The Company uses total capital, which is defined as total shareholders’ equity, long-term debt, senior notes and capital efficient notes, to manage the capital structure of the Company.
 
 
PartnerRe Ltd. is a leading global reinsurer, providing multi-line reinsurance to insurance companies. The Company, through its wholly owned subsidiaries, also offers alternative risk products that include weather and credit protection to financial, industrial and service companies. Risks reinsured include property, casualty, motor, agriculture, aviation/space, catastrophe, credit/surety, engineering, energy, marine, specialty property, specialty casualty, multiline and other lines, life/annuity and health, and alternative risk products. For the year ended December 31, 2007, total revenues were $4.2 billion. At September 30, 2008, total assets were $16.3 billion, total capital was $5.0 billion and total shareholders’ equity was $4.1 billion.

PartnerRe on the Internet: www.partnerre.com

Forward-looking statements contained in this press release are based on the Company’s assumptions and expectations concerning future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. PartnerRe’s forward-looking statements could be affected by numerous foreseeable and unforeseeable events and developments such as exposure to catastrophe, or other large property and casualty losses, adequacy of reserves, risks associated with implementing business strategies, levels and pricing of new and renewal business achieved, credit, interest, currency and other risks associated with the Company’s investment portfolio, changes in accounting policies, and other factors identified in the Company’s filings with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking information contained herein, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. The Company disclaims any obligation to publicly update or revise any forward-looking information or statements.

Contacts:
PartnerRe Ltd.
Sard Verbinnen & Co.
 
(441) 292-0888
(212) 687-808
 
Investor Contact: Robin Sidders
Drew Brown/Jane Simmons
 
Media Contact: Celia Powell
  
 
 
PartnerRe Ltd.
Wellesley House, 5th Floor
90 Pitts Bay Road
Pembroke, Bermuda HM 08
Telephone +1 441 292 0888
Fax +1 441 292 6080
www.partnerre.com
 
  
 
 
PartnerRe Ltd.
Consolidated Statements of Operations and Comprehensive Income
(Expressed in thousands of U.S. dollars, except per share data)
(Unaudited)

   
For the three
    
For the three
    
For the nine
    
For the nine
  
   
months ended
    
months ended
    
months ended
    
months ended
  
   
September 30,
    
September 30,
    
September 30,
    
September 30,
  
   
2008
    
2007
    
2008
    
2007
  
                         
Revenues
                        
     Gross premiums written
   $ 868,584     $ 877,943     $ 3,276,079     $ 3,087,464  
                                 
     Net premiums written
   $ 869,194     $ 873,474     $ 3,237,027     $ 3,042,733  
     Decrease (increase) in unearned premiums
     209,265       182,921       (293,275 )     (255,020 )
     Net premiums earned
     1,078,459       1,056,395       2,943,752       2,787,713  
     Net investment income
     146,138       135,577       428,642       385,488  
     Net realized and unrealized investment losses (1)
     (324,184 )     (3,103 )     (595,327 )     (55,982 )
     Other (loss) income
     (3,838 )     5,445       2,390       (2,948 )
     Total revenues
     896,575       1,194,314       2,779,457       3,114,271  
                                 
Expenses
                                
     Losses and loss expenses and life policy benefits
     751,961       562,132       1,890,349       1,564,904  
     Acquisition costs
     232,814       215,456       665,222       622,493  
     Other operating expenses
     86,939       79,073       275,956       238,004  
     Interest expense
     11,877       13,649       38,687       40,643  
     Net foreign exchange losses
     4,597       3,567       7,820       17,121  
     Total expenses
     1,088,188       873,877       2,878,034       2,483,165  
                                 
(Loss) income before taxes and interest in earnings (losses) of equity investments
     (191,613 )     320,437       (98,577 )     631,106  
     Income tax (benefit) expense
     (39,508 )     34,825       (50,205 )     77,445  
     Interest in earnings (losses) of equity investments
     386       (22,691 )     (351 )     (16,452 )
Net (loss) income
   $ (151,719 )   $ 262,921     $ (48,723 )   $ 537,209  
                                 
Preferred dividends
   $ 8,631     $ 8,631     $ 25,894     $ 25,894  
                                 
Operating earnings available to common shareholders
   $ 121,331     $ 274,198     $ 415,373     $ 565,073  
                                 
Comprehensive (loss) income, net of tax
   $ (243,372 )   $ 387,271     $ (68,477 )   $ 654,795  
                                 
Per Share Data:
                                
     (Loss) earnings per common share:
                                
         Basic operating earnings
   $ 2.27     $ 4.90     $ 7.70     $ 10.00  
         Net realized and unrealized investment (losses) gains, net of tax (1)
     (5.27 )     0.05       (9.10 )     (0.66 )
         Interest in (losses) earnings of equity investments, net of tax
     (0.01 )     (0.40 )     0.02       (0.29 )
         Basic net (loss) income
   $ (3.01 )   $ 4.55     $ (1.38 )   $ 9.05  
                                 
         Weighted average number of common shares outstanding
     53,339.9       55,906.6       53,952.7       56,512.7  
                                 
                                 
         Diluted operating earnings
   $ 2.27     $ 4.78     $ 7.70     $ 9.76  
         Net realized and unrealized investment (losses) gains, net of tax (1)
     (5.27 )     0.05       (9.10 )     (0.65 )
         Interest in (losses) earnings of equity investments, net of tax
     (0.01 )     (0.39 )     0.02       (0.28 )
         Diluted net (loss) income
   $ (3.01 )   $ 4.44     $ (1.38 )   $ 8.83  
                                 
         Weighted average number of common and common share equivalents outstanding
     53,339.9       57,329.2       53,952.7       57,888.8  

(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.


 
 
 

PartnerRe Ltd.
Consolidated Balance Sheets
(Expressed in thousands of U.S. dollars, except per share and parenthetical share and per share data)
 (Unaudited)


   
September 30,
    
December 31,
  
   
2008
    
2007
  
             
Assets
            
     Investments:
            
     Fixed maturities, trading securities, at fair value
   $ 9,774,923     $ -  
     Short-term investments, trading securities, at fair value
     114,165       -  
     Equities, trading securities, at fair value
     857,722       -  
     Fixed maturities, available-for-sale, at fair value
     -       9,498,791  
     Short-term investments, available-for-sale, at fair value
     -       97,307  
     Equities, available-for-sale, at fair value
     -       871,762  
     Trading securities, at fair value
     -       399,280  
     Other invested assets
     112,963       50,201  
     Total investments
     10,859,773       10,917,341  
     Cash and cash equivalents, at fair value, which approximates amortized cost
     675,594       654,895  
     Accrued investment income
     154,551       176,386  
     Reinsurance balances receivable
     1,871,981       1,449,702  
     Reinsurance recoverable on paid and unpaid losses
     166,210       158,494  
     Funds held by reinsured companies
     893,583       1,083,036  
     Deferred acquisition costs
     690,145       641,818  
     Deposit assets
     398,099       398,079  
     Net tax assets
     41,436       -  
     Goodwill
     429,519       429,519  
     Net receivable for securities sold
     39,389       50,065  
     Other assets
     103,835       77,614  
Total assets
   $ 16,324,115     $ 16,036,949  
                 
Liabilities
                
     Unpaid losses and loss expenses
   $ 7,484,625     $ 7,231,436  
     Policy benefits for life and annuity contracts
     1,526,275       1,541,687  
     Unearned premiums
     1,555,263       1,267,873  
     Reinsurance balances payable
     147,420       119,853  
     Ceded premiums payable
     17,649       14,617  
     Funds held under reinsurance treaties
     27,150       21,585  
     Deposit liabilities
     435,067       435,852  
     Net tax liabilities
     -       37,743  
     Accounts payable, accrued expenses and other
     138,375       167,141  
     Long-term debt
     400,000       620,000  
     Debt related to senior notes
     250,000       -  
     Debt related to capital efficient notes
     257,605       257,605  
Total liabilities
     12,239,429       11,715,392  
                 
Shareholders’ Equity
                
     Common shares (par value $1.00, issued: 2008, 57,684,884; 2007, 57,379,516)
     57,685       57,380  
     Series C cumulative preferred shares (par value $1.00, issued and outstanding:
                
         2008 and 2007, 11,600,000; aggregate liquidation preference: 2008 and 2007, $290,000,000)
     11,600       11,600  
     Series D cumulative preferred shares (par value $1.00, issued and outstanding:
                
         2008 and 2007, 9,200,000; aggregate liquidation preference: 2008 and 2007, $230,000,000)
     9,200       9,200  
     Additional paid-in capital
     1,466,162       1,441,598  
     Accumulated other comprehensive income:
                
        Net unrealized gains on investments, net of tax
     3,867       94,747  
        Currency translation adjustment
     163,051       197,777  
        Unfunded pension obligation, net of tax
     (3,383 )     (3,274 )
     Retained earnings
     2,708,750       2,753,784  
     Common shares held in treasury, at cost (2008, 4,408,994; 2007, 3,129,008)
     (332,246 )     (241,255 )
Total shareholders' equity
     4,084,686       4,321,557  
                 
Total liabilities and shareholders' equity
   $ 16,324,115     $ 16,036,949  
                 
Shareholders’ Equity Per Common Share (excluding cumulative
                
     preferred shares: 2008 and 2007, $520,000,000)
   $ 66.91     $ 70.07  
Diluted Book Value Per Common and Common Share Equivalents
                
     Outstanding (assuming exercise of all stock-based awards)
   $ 65.38     $ 67.96  
                 
Number of Common and Common Share Equivalents Outstanding
     54,519.3       55,936.4  


 
 
 

PartnerRe Ltd.
Segment Information
(in millions of U.S. dollars)
(Unaudited)

For the three months ended September 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
   $ 263     $ 137     $ 276     $ 48     $ 724     $ 140     $ 5     $ 869  
                                                                 
Net premiums written
   $ 264     $ 137     $ 274     $ 48     $ 723     $ 141     $ 5     $ 869  
Decrease in unearned premiums
     12       58       16       111       197       8       5       210  
Net premiums earned
   $ 276     $ 195     $ 290     $ 159     $ 920     $ 149     $ 10     $ 1,079  
Losses and loss expenses and
                                                                
   life policy benefits
     (212 )     (98 )     (185 )     (128 )     (623 )     (114 )     (15 )     (752 )
Acquisition costs
     (67 )     (47 )     (72 )     (14 )     (200 )     (32 )     (1 )     (233 )
Technical result
   $ (3 )   $ 50     $ 33     $ 17     $ 97     $ 3     $ (6 )   $ 94  
                                                                 
Other (loss) income
                                     (5 )     -       1       (4 )
Other operating expenses
                                     (55 )     (11 )     (21 )     (87 )
Underwriting result
                                   $ 37     $ (8 )     n/a     $ 3  
                                                                 
Net investment income
                                             17       129       146  
Allocated underwriting result (1)
                                           $ 9       n/a       n/a  
                                                                 
Net realized and unrealized investment losses
                                                     (324 )     (324 )
Interest expense
                                                     (12 )     (12 )
Net foreign exchange losses
                                                     (5 )     (5 )
Income tax benefit
                                                     40       40  
Interest in earnings of equity investments
                                                     -       -  
Net loss
                                                     n/a     $ (152 )
                                                                 
Loss ratio (2)
     76.9 %     50.3 %     63.8 %     80.8 %     67.8 %                        
Acquisition ratio (3)
     24.2       24.2       24.8       8.7       21.7                          
Technical ratio (4)
     101.1 %     74.5 %     88.6 %     89.5 %     89.5 %                        
Other operating expense ratio (5)
                                     6.0                          
Combined ratio (6)
                                     95.5 %                        
                                                                 
                                                                 
For the three months ended September 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
   $ 279     $ 151     $ 252     $ 50     $ 732     $ 145     $ 1     $ 878  
                                                                 
Net premiums written
   $ 279     $ 151     $ 250     $ 50     $ 730     $ 142     $ 1     $ 873  
(Increase) decrease in unearned premiums
     (6 )     41       24       120       179       5       (1 )     183  
Net premiums earned
   $ 273     $ 192     $ 274     $ 170     $ 909     $ 147     $ -     $ 1,056  
Losses and loss expenses and
                                                                
   life policy benefits
     (160 )     (135 )     (119 )     (15 )     (429 )     (133 )     -       (562 )
Acquisition costs
     (64 )     (46 )     (68 )     (15 )     (193 )     (22 )     -       (215 )
Technical result
   $ 49     $ 11     $ 87     $ 140     $ 287     $ (8 )   $ -     $ 279  
                                                                 
Other income
                                     2       -       3       5  
Other operating expenses
                                     (52 )     (8 )     (19 )     (79 )
Underwriting result
                                   $ 237     $ (16 )     n/a     $ 205  
                                                                 
Net investment income
                                             16       120       136  
Allocated underwriting result (1)
                                           $ -       n/a       n/a  
                                                                 
Net realized investment losses
                                                     (3 )     (3 )
Interest expense
                                                     (14 )     (14 )
Net foreign exchange losses
                                                     (3 )     (3 )
Income tax expense
                                                     (35 )     (35 )
Interest in losses of equity investments
                                                     (23 )     (23 )
Net income
                                                     n/a     $ 263  
                                                                 
Loss ratio (2)
     58.6 %     70.3 %     43.5 %     8.8 %     47.2 %                        
Acquisition ratio (3)
     23.3       24.2       24.7       9.1       21.3                          
Technical ratio (4)
     81.9 %     94.5 %     68.2 %     17.9 %     68.5 %                        
Other operating expense ratio (5)
                                     5.7                          
Combined ratio (6)
                                     74.2 %                        

(A)
The Company reports the results of ChannelRe Holdings on a one-quarter lag. The three months ended September 30, 2007 include the Company’s share of ChannelRe Holdings'  net income in the amount of $2.3 million. In addition to ChannelRe Holdings’ results, the Company recorded a charge of $25 million for the three-month period ended September 30, 2007, which represented the Company’s share of anticipated ChannelRe Holdings’ unrealized mark-to-market losses on its credit derivative portfolio, which it expected to incur during the three-month period ended September 30, 2007.

(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.


 
 
 

PartnerRe Ltd.
Segment Information
(in millions of U.S. dollars)
(Unaudited)

For the nine months ended September 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
   $ 849     $ 645     $ 921     $ 391     $ 2,806     $ 453     $ 17     $ 3,276  
                                                                 
Net premiums written
   $ 841     $ 642     $ 898     $ 391     $ 2,772     $ 448     $ 17     $ 3,237  
Increase in unearned premiums
     (14 )     (60 )     (118 )     (90 )     (282 )     (8 )     (3 )     (293 )
Net premiums earned
   $ 827     $ 582     $ 780     $ 301     $ 2,490     $ 440     $ 14     $ 2,944  
Losses and loss expenses and
                                                                
   life policy benefits
     (610 )     (332 )     (476 )     (111 )     (1,529 )     (347 )     (15 )     (1,891 )
Acquisition costs
     (198 )     (147 )     (201 )     (27 )     (573 )     (91 )     (1 )     (665 )
Technical result
   $ 19     $ 103     $ 103     $ 163     $ 388     $ 2     $ (2 )   $ 388  
                                                                 
Other (loss) income
                                     (2 )     -       4       2  
Other operating expenses
                                     (175 )     (32 )     (69 )     (276 )
Underwriting result
                                   $ 211     $ (30 )     n/a     $ 114  
                                                                 
Net investment income
                                             51       378       429  
Allocated underwriting result (1)
                                           $ 21       n/a       n/a  
                                                                 
Net realized and unrealized investment losses
                                                     (595 )     (595 )
Interest expense
                                                     (39 )     (39 )
Net foreign exchange losses
                                                     (8 )     (8 )
Income tax benefit
                                                     50       50  
Interest in earnings of equity investments
                                                     -       -  
Net loss
                                                     n/a     $ (49 )
                                                                 
Loss ratio (2)
     73.7 %     57.1 %     61.1 %     36.6 %     61.4 %                        
Acquisition ratio (3)
     23.9       25.2       25.7       9.1       23.0                          
Technical ratio (4)
     97.6 %     82.3 %     86.8 %     45.7 %     84.4 %                        
Other operating expense ratio (5)
                                     7.0                          
Combined ratio (6)
                                     91.4 %                        
                                                                 
                                                                 
For the nine months ended September 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
   $ 803     $ 613     $ 831     $ 393     $ 2,640     $ 445     $ 2     $ 3,087  
                                                                 
Net premiums written
   $ 802     $ 611     $ 810     $ 393     $ 2,616     $ 425     $ 2     $ 3,043  
Increase in unearned premiums
     (67 )     (69 )     (51 )     (63 )     (250 )     (5 )     -       (255 )
Net premiums earned
   $ 735     $ 542     $ 759     $ 330     $ 2,366     $ 420     $ 2     $ 2,788  
Losses and loss expenses and
                                                                
   life policy benefits
     (447 )     (384 )     (328 )     (60 )     (1,219 )     (346 )     -       (1,565 )
Acquisition costs
     (177 )     (136 )     (194 )     (32 )     (539 )     (83 )     -       (622 )
Technical result
   $ 111     $ 22     $ 237     $ 238     $ 608     $ (9 )   $ 2     $ 601  
                                                                 
Other income (loss)
                                     6       -       (9 )     (3 )
Other operating expenses
                                     (155 )     (23 )     (60 )     (238 )
Underwriting result
                                   $ 459     $ (32 )     n/a     $ 360  
                                                                 
Net investment income
                                             43       342       385  
Allocated underwriting result (1)
                                           $ 11       n/a       n/a  
                                                                 
Net realized investment losses
                                                     (56 )     (56 )
Interest expense
                                                     (41 )     (41 )
Net foreign exchange losses
                                                     (17 )     (17 )
Income tax expense
                                                     (78 )     (78 )
Interest in losses of equity investments
                                                     (16 )     (16 )
Net income
                                                     n/a     $ 537  
                                                                 
Loss ratio (2)
     60.7 %     70.8 %     43.2 %     18.2 %     51.5 %                        
Acquisition ratio (3)
     24.2       25.2       25.6       9.6       22.8                          
Technical ratio (4)
     84.9 %     96.0 %     68.8 %     27.8 %     74.3 %                        
Other operating expense ratio (5)
                                     6.6                          
Combined ratio (6)
                                     80.9 %                        

(A)
The Company reports the results of ChannelRe Holdings on a one-quarter lag.  The nine months ended September 30, 2007 include the Company's share of ChannelRe Holdings' net income in the amount of $8.4 million.  In addition to ChannelRe Holdings’ results, the Company recorded a charge of $25 million for the nine-month period ended September 30, 2007, which represented the Company’s share of anticipated ChannelRe Holdings’ unrealized mark-to-market losses on its credit derivative portfolio, which it expected to incur during the three-month period ended September 30, 2007.