PartnerRe Ltd. Reports First Quarter 2003 Earnings

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.

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.

Results of Operations

"Growth in net written premium was significant in the first quarter of 2003," Mr. Thiele said, "representing 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.

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."

_____________________________________________