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8-K - FORM 8-K - PARTNERRE LTDd616643d8k.htm
News Release   

Exhibit 99.1

 

LOGO

 

PartnerRe Ltd. Reports Third Quarter and Nine Month 2013 Results

 

 

Third Quarter Operating Earnings per share of $5.70; Net Income per share of $5.84

 

 

Third Quarter Annualized Operating ROE of 22.6%; Annualized Net Income ROE of 23.2%

 

 

Nine Month Operating Earnings per share of $9.86; Net Income per share of $5.93

 

 

Nine Month Annualized Operating ROE of 13.0%; Annualized Net Income ROE of 7.8%

 

 

Book Value of $105.53 per share, up 5.9% for the quarter and up 4.7% year-to-date

 

 

Tangible Book Value of $94.86 per share, up 6.5% for the quarter and up 4.4% year-to-date

PEMBROKE, Bermuda, October 28, 2013 – PartnerRe Ltd. (NYSE: PRE) today reported a net income of $333.4 million, or $5.84 per share for the third quarter of 2013. This includes net after-tax realized and unrealized losses on investments of $1.3 million, or $0.03 per share. Net income for the third quarter of 2012 was $486.7 million, or $7.53 per share, including net after-tax realized and unrealized gains on investments of $221.8 million, or $3.55 per share. The Company reported operating earnings of $311.2 million, or a quarterly record for PartnerRe of $5.70 per share, for the third quarter of 2013. This compares to operating earnings of $244.4 million, or $3.90 per share, for the third quarter of 2012.

Net income for the first nine months of 2013 was $392.2 million, or $5.93 per share. This includes net after-tax realized and unrealized losses on investments of $219.0 million, or $3.83 per share. Net income for the first nine months of 2012 was $1,023.0 million, or $15.19 per share, including net after-tax realized and unrealized gains on investments of $399.4 million, or $6.21 per share. Operating earnings for the first nine months of 2013 were $564.3 million, or $9.86 per share. This compares to operating earnings of $568.1 million, or $8.84 per share, for the first nine months of 2012.

Operating earnings or loss excludes certain net after-tax realized and unrealized investment gains and losses, net after-tax foreign exchange gains and losses, certain net after-tax interest in results of equity investments and the loss on redemption of preferred shares, and is calculated after the 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 results, PartnerRe President & Chief Executive Officer Costas Miranthis said, “We had very strong third quarter results reflecting a low level of large loss activity and strong core performance for most of our businesses, culminating in a 74.9% combined ratio and a 22.6% operating return on equity. For the year to date, we have recorded a 13% operating return on equity and an increase of 4.7% in book value per share. I would like to thank our teams for their exceptional focus and determination over the last few years, without which we would not be enjoying such excellent results.”

 

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    LOGO

 

“We are encouraged by these strong results in the current economic reinsurance pricing environment,” Mr. Miranthis added. “Against a backdrop of improved underlying primary pricing, reinsurance remains a competitive market. The market dynamics are similar to what we experienced in prior quarters but our teams have demonstrated that we can leverage the strength of our worldwide franchise to identify attractive business opportunities in all lines, and particularly in diversifying lines, where we have had the most success.”

Highlights for the third quarter and first nine months of 2013 compared to the same periods in 2012 include:

Results of operations:

 

   

For the third quarter, net premiums written of $1.3 billion were up 21%. The increase was reported across all Non-life sub-segments and the Life and Health segment. The increase was primarily related to new business in the North America sub-segment and, to a lesser extent, the inclusion of Presidio’s business in the Life and Health segment and new business in the Global (Non-U.S.) P&C and Global Specialty sub-segments. For the first nine months of 2013, net premiums written of $4.2 billion were up 15%. The increase was reported across all Non-life sub-segments and the Life and Health segment primarily due to the same factors discussed above for the third quarter.

 

   

For the third quarter, net premiums earned of $1.4 billion were up 15%, or 14% on a constant foreign exchange basis. The increase was primarily driven by the same factors discussed above for net premiums written for the third quarter. For the first nine months of 2013, net premiums earned of $3.8 billion were up 14%, primarily due to the same factors discussed above for net premiums written for the third quarter.

 

   

For the third quarter, the Non-life combined ratio was 74.9%. The combined ratio included 4.7 points (or $55 million, net of reinstatement premiums and retrocession) related to the German hailstorms in July 2013, and benefited from favorable prior year development of 20.3 points (or $238 million). All Non-life sub-segments experienced net favorable development on prior accident years during the third quarter of 2013. For the first nine months of 2013, the Non-life combined ratio was 84.2%. The combined ratio included 5.2 points (or $156 million, net of reinstatement premiums and retrocession) related to the German hailstorms, the European floods and the Alberta floods (the “2013 Catastrophe events”), and benefited from favorable prior year development of 17.9 points (or $548 million). All Non-life sub-segments experienced net favorable development on prior accident years during the first nine months of 2013.

 

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    LOGO

 

   

For the third quarter and the first nine months of 2013, other operating expenses included a pre-tax charge of $2 million and $46 million, respectively, related to the restructuring of the Company’s business support and Global Non-life operations, which was announced in April 2013. After-tax, these charges decreased the third quarter and the first nine months annualized operating ROE by 0.1% and 0.7%, respectively.

 

   

For the third quarter and the first nine months of 2013, net investment income of $122 million and $370 million, respectively, was down 12% and 16%, respectively, on a constant foreign exchange basis. The decrease in net investment income primarily reflects lower reinvestment rates.

 

   

For the third quarter, pre-tax net realized and unrealized investment gains were $16 million, which after-tax are losses of $1.3 million, primarily reflecting improvements in equity markets. For the first nine months of 2013, pre-tax net realized and unrealized investment losses were $260 million, which primarily reflects increases in risk-free rates.

 

   

For the third quarter, the effective tax rate on operating earnings and non-operating earnings was 15% and 61%, respectively. For the first nine months of 2013, the effective tax rate on operating earnings and non-operating earnings was 12% and 17%, respectively.

Balance sheet and capitalization:

 

   

Total investments, cash and funds held – directly managed were $17.5 billion at September 30, 2013, down 3% compared to December 31, 2012.

 

   

Net Non-life loss and loss expense reserves were $10.3 billion at September 30, 2013, down 1% compared to December 31, 2012 primarily due to loss payments.

 

   

Net policy benefits for life and annuity contracts were $1.9 billion at September 30, 2013, up 6% compared to December 31, 2012.

 

   

Total capital was $7.4 billion at September 30, 2013, down 5% compared to December 31, 2012 primarily driven by share repurchases, the redemption of Series C preferred shares and common and preferred dividend payments, which were partially offset by net income for the first nine months of 2013 and the issuance of Series F preferred shares.

 

   

The Company repurchased approximately 1.2 million common shares at a total cost of approximately $103 million during the third quarter of 2013. The average repurchase price represents a 10.7% discount to June 30, 2013 diluted book value per share. Since October 1, 2013, the Company has repurchased 90 thousand common shares at a total cost of approximately $8 million. At October 28, 2013, approximately 5.9 million common shares remained under the current repurchase authorization.

 

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    LOGO

 

   

Total shareholders’ equity attributable to PartnerRe was $6.6 billion at September 30, 2013, down 5% compared to December 31, 2012. The decline was driven by the factors described above for total capital.

 

   

Book value per common share was $105.53 at September 30, 2013, a record high for PartnerRe, up 4.7% compared to $100.84 at December 31, 2012. Tangible book value per common share was $94.86 at September 30, 2013, up 4.4% compared to $90.86 at December 31, 2012. The increases were primarily driven by net income and the accretive impact of share repurchases, which were partially offset by common and preferred dividend payments.

Segment and sub-segment highlights for the third quarter and the first nine months of 2013 compared to the same period in 2012 include:

Non-life:

 

   

For the third quarter, the Non-life segment’s net premiums written were up 20%. The increase was reported across all Non-life sub-segments and was primarily related to the North America sub-segment and, to a lesser extent, the Global (Non-U.S.) P&C and the Global Specialty sub-segments. For the first nine months of 2013, net premiums written were up 15%. The increase was reported across all Non-life sub-segments due to the same factors discussed above for the third quarter.

 

   

For the third quarter, the North America sub-segment’s net premiums written were up 31% primarily driven by new business in the agriculture line of business and, to a lesser extent, new business in the structured property and casualty lines of business. This sub-segment reported a technical ratio of 70.2%, which included 22.2 points (or $94 million) of net favorable prior year loss development. For the first nine months of 2013, the North America sub-segment’s net premiums written were up 32% due to the same factors discussed above for the third quarter. This sub-segment reported a technical ratio of 83.8%, which included 13.9 points (or $155 million) of net favorable prior year loss development and 1.4 points (or $16 million) of losses related to the Alberta floods.

 

   

For the third quarter, the Global (Non-U.S.) P&C sub-segment’s net premiums written were up 28%, or 29% on a constant foreign exchange basis, primarily due to new business in the motor line of business and upward premium adjustments in the property line of business. This sub-segment reported a technical ratio of 71.7%, which included 19.2 points (or $37 million) of net favorable prior year loss development and 1.5 points (or $3 million) of losses related to the German hailstorms. For the first nine months of 2013, the Global (Non-U.S.) P&C sub-segment’s net premiums written were up 15% primarily due to new motor business. This sub-segment reported a technical ratio of 74.9%, which included 24.8 points (or

 

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    LOGO

 

 

$131 million) of net favorable prior year loss development and 2.6 points (or $14 million) of losses related to the German hailstorms and the European floods.

 

   

For the third quarter, the Global Specialty sub-segment’s net premiums written were up 10%, or 8% on a constant foreign exchange basis, primarily due to new business in the specialty casualty and multi-line lines of business, and were partially offset by cancellations in the marine line of business. This sub-segment reported a technical ratio of 83.8%, which included 20.4 points (or $78 million) of net favorable prior year loss development. For the first nine months of 2013, the Global Specialty sub-segment’s net premiums written were up 6%, or 5% on a constant foreign exchange basis, primarily due to new business in the multi-line and agriculture lines of business. This sub-segment reported a technical ratio of 87.5%, which included 15.2 points (or $166 million) of net favorable prior year loss development and 1.9 points (or $21 million) of losses related to the European floods and the Alberta floods.

 

   

For the third quarter, the Catastrophe sub-segment’s net premiums written were up 6%, or 10% on a constant foreign exchange basis. The increase in net premiums written was primarily due to new business. This sub-segment reported a technical ratio of 33.5%, which included 16.8 points (or $29 million) of net favorable prior year loss development and 30.7 points (or $52 million) of losses, net of reinstatement premiums and retrocession, related to the German hailstorms. For the first nine months of 2013, the Catastrophe sub-segment’s net premiums written were up 1%, or up 3% on a constant foreign exchange basis. This sub-segment reported a technical ratio of 33.9%, which included 28.4 points (or $96 million) of net favorable prior year loss development and 35.1 points (or $105 million) of losses, net of reinstatement premiums and retrocession, related to the 2013 Catastrophe events.

Life and Health:

 

   

For the third quarter, the Life and Health segment’s net premiums written were up 25%, or 23% on a constant foreign exchange basis, primarily due to the inclusion of Presidio’s net premiums written. For the first nine months of 2013, the Life and Health segment’s net premiums written were up 19%, or 18% on a constant foreign exchange basis, primarily due to the same factor describing the third quarter.

 

   

For the third quarter, the Life and Health segment’s allocated underwriting result, which includes allocated investment income and operating expenses, increased to $25 million compared to $15 million in the same period of 2012. The increase was primarily due to a higher level of net favorable prior year loss development. For the first nine months of 2013, the Life and Health segment’s allocated underwriting result increased to $60 million compared to $42 million in the same period of 2012 primarily due to the same factor describing the third quarter.

 

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    LOGO

 

Corporate and Other:

 

   

For the third quarter, investment and capital markets activities contributed income of $133 million to pre-tax net income, excluding investment income allocated to the Life and Health segment. Of this amount, income of $111 million was included in pre-tax operating earnings and income of $22 million related to net realized and unrealized gains on investments and earnings from equity investee companies was included in pre-tax non-operating earnings. For the first nine months of 2013, investment and capital markets activities contributed income of $78 million to pre-tax net income, excluding investment income allocated to the Life and Health segment. Of this amount, income of $327 million was included in pre-tax operating earnings and losses of $249 million related to net realized and unrealized losses on investments and earnings from equity investee companies was included in pre-tax non-operating earnings.

 

   

For the third quarter and first nine months of 2013, other operating expenses included a pre-tax charge of $2 million and $46 million, respectively, related to the restructuring of the Company’s business support and Global Non-life operations, which was announced in April 2013.

Separately, as announced by the Company earlier today, the Board of Directors declared a quarterly dividend of $0.64 per common share. The dividend will be payable on November 29, 2013, to common shareholders of record on November 18, 2013.

The Company has posted its third quarter 2013 financial supplement on its website www.partnerre.com in the Investor Relations section on the Financial Reports page under Supplementary Financial Data, which includes a reconciliation of GAAP and non-GAAP measures.

The Company will hold a dial-in conference call and question and answer session with investors at 10 a.m. Eastern tomorrow, October 29. Investors and analysts are encouraged to call in 15 minutes prior to the commencement of the call. The conference call can be accessed by dialing 888-277-7102 or, from outside the United States, by dialing 913-312-1388. The media are invited to listen to the call live over the Internet on the Investor Relations section of PartnerRe’s web site, www.partnerre.com. To listen to the webcast, please log on to the broadcast at least five minutes prior to the start.

 

 

Net income/loss per share is defined as net income/loss attributable to PartnerRe common shareholders divided by the weighted average number of fully diluted shares outstanding for

 

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    LOGO

 

the period. Net income/loss attributable to PartnerRe common shareholders is defined as net income/loss attributable to PartnerRe less preferred dividends and loss on redemption of preferred shares. Operating earnings/loss is defined as net income/loss available to PartnerRe common shareholders excluding certain after-tax net realized and unrealized gains/losses on investments, after-tax net foreign exchange gains/losses, the loss on redemption of preferred shares and certain 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.

The Company uses operating earnings, diluted operating earnings per share and annualized operating return on beginning diluted book value per common and common share equivalents outstanding to measure performance, as these measures focus on the underlying fundamentals of our operations without the impact of after-tax net realized and unrealized gains/losses on investments (except where the company has made a strategic investment in an insurance or reinsurance related investee), after-tax net foreign exchange gains/losses, and the after-tax interest in earnings/losses of equity investments (except where the company has made a strategic investment in an insurance or reinsurance related investee and where the Company does not control the investees 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 allocated underwriting result as a measure of underwriting performance for its Life and Health operations. This metric 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. The Company uses total capital, which is defined as total shareholders’ equity attributable to PartnerRe, long-term debt, senior notes and CENts, to manage the capital structure of the Company. The Company calculates Tangible Book Value using common shareholders’ equity attributable to PartnerRe less goodwill and intangible assets, net of tax. The Company calculates Diluted Tangible Book Value per Common Share using Tangible Book Value divided by the weighted average number of PartnerRe common shares and common share equivalents outstanding. The Company uses these measures as the basis for its prime measure of long-term financial performance (annualized growth in Diluted Tangible Book Value per Common Share plus dividends).

 

 

PartnerRe Ltd. is a leading global reinsurer, providing multi-line reinsurance to insurance companies. The Company, through its wholly owned subsidiaries, also offers capital markets products that include weather and credit protection to financial, industrial and service companies. Risks reinsured include property, casualty, motor, agriculture, aviation/space, catastrophe,

 

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    LOGO

 

credit/surety, engineering, energy, marine, specialty property, specialty casualty, multiline and other lines in its Non-life operations, mortality, longevity and accident and health in its Life and Health operations, and alternative risk products. For the year ended December 31, 2012, total revenues were $5.6 billion. At September 30, 2013, total assets were $23.1 billion, total capital was $7.4 billion and total shareholders’ equity attributable to PartnerRe was $6.6 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, credit, interest, currency and other risks associated with the Company’s investment portfolio, adequacy of reserves, levels and pricing of new and renewal business achieved, changes in accounting policies, risks associated with implementing business strategies, 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.

(441) 292-0888

Investor Contact: Robin Sidders

Media Contact: Celia Powell

  

Sard Verbinnen & Co.

(212) 687-8080

Drew Brown/Daniel Goldstein

 

 

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 share and per share data)

(Unaudited)

 

     For the three
months ended
September 30,
2013
    For the three
months ended
September 30,
2012
     For the nine
months ended
September 30,
2013
    For the nine
months ended
September 30,
2012
 

Revenues

         

Gross premiums written

   $ 1,281,477      $ 1,056,076       $ 4,378,944      $ 3,786,802   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net premiums written

   $ 1,264,775      $ 1,043,240       $ 4,210,525      $ 3,652,571   

Decrease (increase) in unearned premiums

     156,694        193,851         (433,740     (334,772
  

 

 

   

 

 

    

 

 

   

 

 

 

Net premiums earned

     1,421,469        1,237,091         3,776,785        3,317,799   

Net investment income

     121,811        135,266         370,017        435,669   

Net realized and unrealized investment gains (losses)

     16,118        257,429         (260,154     488,296   

Other income

     5,399        2,744         13,205        8,143   
  

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     1,564,797        1,632,530         3,899,853        4,249,907   
  

 

 

   

 

 

    

 

 

   

 

 

 

Expenses

         

Losses and loss expenses and life policy benefits

     750,999        721,137         2,278,793        2,003,759   

Acquisition costs

     282,948        247,058         758,890        691,388   

Other operating expenses (1)

     108,467        94,697         369,340        299,055   

Interest expense

     12,233        12,224         36,694        36,668   

Amortization of intangible assets

     7,045        8,893         21,136        26,679   

Net foreign exchange losses (gains)

     1,279        2,015         9,822        (3,165
  

 

 

   

 

 

    

 

 

   

 

 

 

Total expenses

     1,162,971        1,086,024         3,474,675        3,054,384   
  

 

 

   

 

 

    

 

 

   

 

 

 

Income before taxes and interest in earnings of equity investments

     401,826        546,506         425,178        1,195,523   

Income tax expense

     70,232        64,149         37,338        181,458   

Interest in earnings of equity investments

     5,941        4,349         9,677        8,929   
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income

     337,535        486,706         397,517        1,022,994   

Net income attributable to noncontrolling interests

     (4,112     —           (5,296     —     
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income attributable to PartnerRe

     333,423        486,706         392,221        1,022,994   

Preferred dividends

     14,184        15,405         43,678        46,216   

Loss on redemption of preferred shares

     —          —           9,135        —     
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income attributable to PartnerRe common shareholders

   $ 319,239      $ 471,301       $ 339,408      $ 976,778   
  

 

 

   

 

 

    

 

 

   

 

 

 

Operating earnings attributable to PartnerRe common shareholders

   $ 311,184      $ 244,406       $ 564,328      $ 568,119   
  

 

 

   

 

 

    

 

 

   

 

 

 

Comprehensive income attributable to PartnerRe

   $ 347,740      $ 518,871       $ 375,597      $ 1,053,153   
  

 

 

   

 

 

    

 

 

   

 

 

 

Per share data attributable to PartnerRe common shareholders:

         

Earnings per common share:

         

Basic operating earnings

   $ 5.80      $ 3.95       $ 10.05      $ 8.92   

Net realized and unrealized investment (losses) gains, net of tax

     (0.02     3.59         (3.90     6.27   

Net foreign exchange gains (losses), net of tax

     0.10        0.02         (0.03     0.02   

Loss on redemption of preferred shares

     —          —           (0.16     —     

Interest in earnings of equity investments, net of tax

     0.07        0.06         0.08        0.13   
  

 

 

   

 

 

    

 

 

   

 

 

 

Basic net income

   $ 5.95      $ 7.62       $ 6.04      $ 15.34   
  

 

 

   

 

 

    

 

 

   

 

 

 

Weighted average number of common shares outstanding

     53,671,245        61,837,328         56,176,260        63,679,114   

Diluted operating earnings (1)

   $ 5.70      $ 3.90       $ 9.86      $ 8.84   

Net realized and unrealized investment (losses) gains, net of tax

     (0.03     3.55         (3.83     6.21   

Net foreign exchange gains (losses), net of tax

     0.10        0.02         (0.02     0.01   

Loss on redemption of preferred shares

     —          —           (0.16     —     

Interest in earnings of equity investments, net of tax

     0.07        0.06         0.08        0.13   
  

 

 

   

 

 

    

 

 

   

 

 

 

Diluted net income

   $ 5.84      $ 7.53       $ 5.93      $ 15.19   
  

 

 

   

 

 

    

 

 

   

 

 

 

Weighted average number of common shares and common share equivalents outstanding

     54,625,151        62,606,761         57,217,561        64,284,125   

Dividends declared per common share

   $ 0.64      $ 0.62       $ 1.92      $ 1.86   

 

(1)

Income before taxes and interest in earnings of equity investments include an expense related to the restructuring of the Company’s business support operations and Global Non-life operations of $2.4 million and $45.7 million, or $0.04 and $0.80 per diluted share, pre-tax, for the three months and nine months ended September 30, 2013, respectively.


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,
2013
    December 31,
2012
 

Assets

    

Investments:

    

Fixed maturities, trading securities, at fair value

   $ 13,680,838      $ 14,395,315   

Short-term investments, trading securities, at fair value

     36,781        150,552   

Equities, trading securities, at fair value

     1,122,084        1,094,002   

Other invested assets

     268,097        333,361   
  

 

 

   

 

 

 

Total investments

     15,107,800        15,973,230   

Funds held – directly managed

     813,497        930,741   

Cash and cash equivalents, at fair value, which approximates amortized cost

     1,551,062        1,121,705   

Accrued investment income

     175,164        184,315   

Reinsurance balances receivable

     2,564,015        1,991,991   

Reinsurance recoverable on paid and unpaid losses

     339,169        348,086   

Funds held by reinsured companies

     831,704        805,489   

Deferred acquisition costs

     680,972        568,391   

Deposit assets

     347,419        257,208   

Net tax assets

     13,688        25,098   

Goodwill

     456,380        456,380   

Intangible assets

     193,134        214,270   

Other assets

     64,203        103,528   
  

 

 

   

 

 

 

Total assets

   $ 23,138,207      $ 22,980,432   
  

 

 

   

 

 

 

Liabilities

    

Unpaid losses and loss expenses

   $ 10,564,542      $ 10,709,371   

Policy benefits for life and annuity contracts

     1,908,575        1,813,244   

Unearned premiums

     1,997,853        1,534,625   

Other reinsurance balances payable

     232,711        238,578   

Deposit liabilities

     330,233        252,217   

Net tax liabilities

     293,797        387,647   

Accounts payable, accrued expenses and other

     365,331        290,265   

Debt related to senior notes

     750,000        750,000   

Debt related to capital efficient notes

     70,989        70,989   
  

 

 

   

 

 

 

Total liabilities

     16,514,031        16,046,936   
  

 

 

   

 

 

 

Shareholders’ Equity

    

Common shares (par value $1.00; issued: 2013, 86,425,676 shares; 2012, 85,459,905 shares)

     86,426        85,460   

Preferred shares (par value $1.00; issued and outstanding: 2013, 34,150,000 shares; 2012, 35,750,000 shares; aggregate liquidation value: 2013, $853,750; 2012, $893,750)

     34,150        35,750   

Additional paid-in capital

     3,880,412        3,861,844   

Accumulated other comprehensive (loss) income

     (6,027     10,597   

Retained earnings

     5,183,219        4,952,002   

Common shares held in treasury, at cost (2013, 33,197,911 shares; 2012, 26,550,530 shares)

     (2,606,493     (2,012,157
  

 

 

   

 

 

 

Total shareholders’ equity attributable to PartnerRe

     6,571,687        6,933,496   

Noncontrolling interests

     52,489        —     
  

 

 

   

 

 

 

Total shareholders’ equity

     6,624,176        6,933,496   
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 23,138,207      $ 22,980,432   
  

 

 

   

 

 

 

Diluted Book Value Per Common Share and Common Share Equivalents Outstanding (1) (2)

   $ 105.53      $ 100.84   
  

 

 

   

 

 

 

Diluted Tangible Book Value Per Common Share and Common Share Equivalents Outstanding (1) (2)

   $ 94.86      $ 90.86   
  

 

 

   

 

 

 

Number of Common Share and Common Share Equivalents Outstanding (2)

     54,181,672        59,893,366   
  

 

 

   

 

 

 

 

(1)

Excludes the aggregate liquidation value of preferred shares (2013, $853,750; 2012, $893,750) and noncontrolling interests (2013, $52,489; 2012, $Nil).

(2) 

Common share and common share equivalents outstanding are calculated using the Treasury Method for all potentially dilutive shares.


PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

 

    For the three months ended September 30, 2013                          
    North
America
    Global
(Non-U.S.)
P&C
    Global
Specialty
    Catastrophe     Total
Non-life
segment
    Life
and Health
segment
    Corporate
and Other
    Total  

Gross premiums written

  $ 409      $ 157      $ 396      $ 79      $ 1,041      $ 235      $ 5      $ 1,281   

Net premiums written

  $ 408      $ 157      $ 389      $ 72      $ 1,026      $ 234      $ 5      $ 1,265   

Decrease (increase) in unearned premiums

    17        38        (7     99        147        9        —          156   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net premiums earned

  $ 425      $ 195      $ 382      $ 171      $ 1,173      $ 243      $ 5      $ 1,421   

Losses and loss expenses and life policy benefits

    (197     (90     (228     (42     (557     (195     1        (751

Acquisition costs

    (101     (50     (92     (16     (259     (24     —          (283
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Technical result

  $ 127      $ 55      $ 62      $ 113      $ 357      $ 24      $ 6      $ 387   

Other income

            2        3        —          5   

Other operating expenses

            (62     (17     (29     (108
         

 

 

   

 

 

   

 

 

   

 

 

 

Underwriting result

          $ 297      $ 10        n/a      $ 284   

Net investment income

              15        107        122   
           

 

 

   

 

 

   

 

 

 

Allocated underwriting result (1)

            $ 25        n/a        n/a   

Net realized and unrealized investment gains

                16        16   

Interest expense

                (12     (12

Amortization of intangible assets

                (7     (7

Net foreign exchange losses

                (1     (1

Income tax expense

                (70     (70

Interest in earnings of equity investments

                6        6   
             

 

 

   

 

 

 

Net income

                n/a      $ 338   
             

 

 

   

 

 

 

Loss ratio (2)

    46.3     46.0     59.8     24.5     47.5      

Acquisition ratio (3)

    23.9        25.7        24.0        9.0        22.1         
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

       

Technical ratio (4)

    70.2     71.7     83.8     33.5     69.6      

Other operating expense ratio (5)

            5.3         
         

 

 

       

Combined ratio (6)

            74.9      
         

 

 

       
    For the three months ended September 30, 2012                          
    North
America
    Global (Non-
U.S.) P&C
    Global
Specialty
    Catastrophe     Total
Non-life
segment
    Life
and Health
segment
    Corporate
and Other
    Total  

Gross premiums written

  $ 311      $ 123      $ 360      $ 75      $ 869      $ 187      $ —        $ 1,056   

Net premiums written

  $ 311      $ 122      $ 354      $ 69      $ 856      $ 187      $ —        $ 1,043   

Decrease in unearned premiums

    24        50        9        99        182        8        4        194   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net premiums earned

  $ 335      $ 172      $ 363      $ 168      $ 1,038      $ 195      $ 4      $ 1,237   

Losses and loss expenses and life policy benefits

    (251     (110     (161     (39     (561     (157     (3     (721

Acquisition costs

    (83     (42     (79     (15     (219     (27     (1     (247
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Technical result

  $ 1      $ 20      $ 123      $ 114      $ 258      $ 11      $ —        $ 269   

Other income

            1        1        1        3   

Other operating expenses

            (58     (12     (25     (95
         

 

 

   

 

 

   

 

 

   

 

 

 

Underwriting result

          $ 201      $ —          n/a      $ 177   

Net investment income

              15        120        135   
           

 

 

   

 

 

   

 

 

 

Allocated underwriting result (1)

            $ 15        n/a        n/a   

Net realized and unrealized investment gains

                257        257   

Interest expense

                (12     (12

Amortization of intangible assets

                (9     (9

Net foreign exchange losses

                (2     (2

Income tax expense

                (64     (64

Interest in earnings of equity investments

                5        5   
             

 

 

   

 

 

 

Net income

                n/a      $ 487   
             

 

 

   

 

 

 

Loss ratio (2)

    74.9     63.9     44.4     23.3     54.1      

Acquisition ratio (3)

    24.8        24.9        21.7        8.8        21.1         
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

       

Technical ratio (4)

    99.7     88.8     66.1     32.1     75.2      

Other operating expense ratio (5)

            5.5         
         

 

 

       

Combined ratio (6)

            80.7      
         

 

 

       

 

(1) 

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

(2) 

Loss ratio is obtained by dividing losses and loss expenses by net premiums earned.

(3) 

Acquisition ratio is obtained by dividing acquisition costs by net premiums earned.

(4) 

Technical ratio is defined as the sum of the loss ratio and the acquisition ratio.

(5) 

Other operating expense ratio is obtained by dividing other operating expenses by net premiums earned.

(6) 

Combined ratio is defined as the sum of the technical ratio and the other operating expense ratio.


PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

 

    For the nine months ended September 30, 2013                          
          Global                 Total     Life              
    North     (Non-U.S.)     Global           Non-life     and Health     Corporate        
    America     P&C     Specialty     Catastrophe     segment     segment     and Other     Total  

Gross premiums written

  $ 1,228      $ 690      $ 1,253      $ 478      $ 3,649      $ 722      $ 8      $ 4,379   

Net premiums written

  $ 1,215      $ 682      $ 1,159      $ 433      $ 3,489      $ 715      $ 7      $ 4,211   

Increase in unearned premiums

    (99     (152     (68     (97     (416     (17     (1     (434
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net premiums earned

  $ 1,116      $ 530      $ 1,091      $ 336      $ 3,073      $ 698      $ 6      $ 3,777   

Losses and loss expenses and life policy benefits

    (682     (263     (697     (81     (1,723     (558     2        (2,279

Acquisition costs

    (253     (134     (257     (33     (677     (82     —          (759
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Technical result

  $ 181      $ 133      $ 137      $ 222      $ 673      $ 58      $ 8      $ 739   

Other income

            3        9        1        13   

Other operating expenses

            (189     (52     (128     (369
         

 

 

   

 

 

   

 

 

   

 

 

 

Underwriting result

          $ 487      $ 15        n/a      $ 383   

Net investment income

              45        325        370   
           

 

 

   

 

 

   

 

 

 

Allocated underwriting result (1)

            $ 60        n/a        n/a   

Net realized and unrealized investment losses

                (260     (260

Interest expense

                (37     (37

Amortization of intangible assets

                (21     (21

Net foreign exchange losses

                (10     (10

Income tax expense

                (37     (37

Interest in earnings of equity investments

                10        10   
             

 

 

   

 

 

 

Net income

                n/a      $ 398   
             

 

 

   

 

 

 

Loss ratio (2)

    61.1     49.7     63.9     24.2     56.1      

Acquisition ratio (3)

    22.7        25.2        23.6        9.7        22.0         
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

       

Technical ratio (4)

    83.8     74.9     87.5     33.9     78.1      

Other operating expense ratio (5)

            6.1         
         

 

 

       

Combined ratio (6)

            84.2      
         

 

 

       
    For the nine months ended September 30, 2012                          
          Global                 Total     Life              
    North     (Non-U.S.)     Global           Non-life     and Health     Corporate        
    America     P&C     Specialty     Catastrophe     segment     segment     and Other     Total  

Gross premiums written

  $ 924      $ 600      $ 1,178      $ 475      $ 3,177      $ 604      $ 6      $ 3,787   

Net premiums written

  $ 922      $ 596      $ 1,098      $ 429      $ 3,045      $ 601      $ 6      $ 3,652   

Increase in unearned premiums

    (59     (100     (64     (98     (321     (12     (1     (334
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net premiums earned

  $ 863      $ 496      $ 1,034      $ 331      $ 2,724      $ 589      $ 5      $ 3,318   

Losses and loss expenses and life policy benefits

    (568     (327     (569     (58     (1,522     (479     (3     (2,004

Acquisition costs

    (218     (120     (241     (30     (609     (82     —          (691
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Technical result

  $ 77      $ 49      $ 224      $ 243      $ 593      $ 28      $ 2      $ 623   

Other income

            2        3        3        8   

Other operating expenses

            (187     (38     (74     (299
         

 

 

   

 

 

   

 

 

   

 

 

 

Underwriting result

          $ 408      $ (7     n/a      $ 332   

Net investment income

              49        387        436   
           

 

 

   

 

 

   

 

 

 

Allocated underwriting result (1)

            $ 42        n/a        n/a   

Net realized and unrealized investment gains

                488        488   

Interest expense

                (37     (37

Amortization of intangible assets

                (27     (27

Net foreign exchange gains

                3        3   

Income tax expense

                (181     (181

Interest in earnings of equity investments

                9        9   
             

 

 

   

 

 

 

Net income

                n/a      $ 1,023   
             

 

 

   

 

 

 

Loss ratio (2)

    65.9     65.9     55.1     17.4     55.9      

Acquisition ratio (3)

    25.2        24.3        23.3        9.1        22.3         
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

       

Technical ratio (4)

    91.1     90.2     78.4     26.5     78.2      

Other operating expense ratio (5)

            6.9         
         

 

 

       

Combined ratio (6)

            85.1