Partner Re turn loss to profit

Second quarter profits beat expectations

Bermuda reinsurer Partner Re today reported net income of $474.3m for the second quarter of 2009 turning round a loss this time last year.

Financial highlights (2008 figures in brackets)

Net Premiums Written $844.7m ($956.3m) half year: $2.2bn ($2.4bn)
Net Premiums Earned $826.1m ($955.5m) half year: $1.7bn ($1.9bn)
Non-life Combined Ratio 83.5% (85.9%) half year: 85.3% (89.0%)
Net Income $474.3m (-$26m) half year: $615.8m ($103m)
Operating Earnings $179.2m ($183.8m) half year: $335m $294m)

President and CEO Patrick Thiele said: “PartnerRe had an excellent second quarter and first half of 2009, with both its reinsurance and capital markets activities performing well. For the first six months of 2009, we achieved an operating return on beginning equity of 18%, and a 15% growth in GAAP book value per share. Our reinsurance results benefited from a low level of large losses while our investment operations participated fully in the improvement shown by the global capital markets.”

Non-life segment

Q2 net premiums written $724m ($814m)
Combined ratio 83.5% (85.9%)
Technical result $171m ($176m)
Half-year net premiums written $1.9bn ($2.0bn)
Technical result $319m ($292m)
Combined ratio 85.3% (89.0%)

Business split

US business 29%
Global (Non-US) P&C business 14%
Global (Non-US) Specialty business 28%
Catastrophe business 15%
Life segment 14%

Future outlook

“Non-life market conditions at July 1 were mixed, with only selected specialty lines and Global P&C lines showing improvement. Within that environment, we grew our renewal book by approximately 11% (on a constant exchange basis) with expected profitability that is in-line with our long-term targets.”

Thiele added: “We remain focused on maintaining a well-balanced portfolio of attractively priced risks under any and all market conditions.

Paris Re deal

“Our planned acquisition of Paris Re is consistent with that objective, and will provide us with both increased diversification of risk and significant growth opportunities at a time when industry demand is likely to remain stagnant. This acquisition will also enhance our financial strength and flexibility through the addition of approximately $1.7bn in incremental shareholders’ equity.

“We are confident that the larger and stronger PartnerRe will be better able to achieve its financial goals, with reduced risk, in the uncertain environment we are facing.”