PartnerRe Ltd. Reports Third Quarter 2004 Results

PartnerRe President & Chief Executive Officer, Patrick Thiele said, "The third quarter saw an exceptionally active hurricane and typhoon season with the cost of natural disasters reaching a new record for the industry. In this difficult environment, PartnerRe continued to achieve very credible operating results with annualized operating returns on equity of 10% for the quarter and 16% for the year-to-date. Additionally, book value per share has grown 11% to a new record level of $47.35 on a year-to-date basis. This clearly demonstrates that the excellent portfolio diversification that we have achieved over the past six years is resulting in consistently high quality and stable earnings."

(a) Net income per share is defined as net income available to common shareholders divided by the weighted average number of fully diluted shares outstanding for the period. Net income available to common shareholders is defined as net income less preferred dividends. Net operating earnings is net income available to common shareholders excluding after-tax net realized gains/losses on investments. Net operating earnings per share is defined as net operating earnings divided by the weighted average number of fully diluted shares outstanding for the period. Per share results are on a fully diluted basis.

(b) Developing interpretations of accounting guidance resulted in changes in the classification of certain Income Statement items. The Company performed these reclassifications as if these interpretations were available as of January 1, 2003.

Net premiums written for the third quarter 2004 were $805.3 million, an 8% increase over the comparable period in 2003. Total revenues for the quarter were up 9% from the third quarter in 2003 to $1.1 billion, including $943.8 million of net premiums earned - an increase of 6%; net investment income of $69.6 million - an increase of 8%; and net realized investment gains of $32.8 million.

For the first nine months of 2004, net premiums written were $3.2 billion, a 13% increase over the same period in 2003. Net income was $348.7 million or $6.17 per share. Net income for the period includes a net after-tax realized gain on investments of $62.1 million or $1.15 per share. Operating earnings were $271.9 million, or $5.02 per share. Net income for the first nine months of 2003 was $363.1 million or $6.30 per share including net after-tax realized gains of $70.7 million, or $1.32 per share. Operating earnings for the same period in 2003 were $268.0 million or $4.98 per share. Total revenues for the first nine months of 2004 were $3.1 billion, including $2.8 billion of net premiums earned, net investment income of $218.0 million, and net realized investment gains of $78.7 million. Total revenues for the same period in 2003 were $2.8 billion.

At September 30, 2004, total assets were $11.9 billion, total capitalization was $3.4 billion, and total shareholders' equity was $2.8 billion. This compares to total assets of $10.9 billion, total capitalization of $3.2 billion and total shareholders' equity of $2.6 billion at December 31, 2003. Book value per common share at September 30, 2004 was $47.35 on a fully diluted basis, compared to $42.48 per share at December 31, 2003.

The Company is continuing its share repurchase program which was initiated during the second quarter of 2004. During the quarter ended September 30, 2004, the Company repurchased 711,400 shares, bringing the total number of shares repurchased for the year-to-date to 874,700.

Separately, the Company announced today that its Board of Directors declared a regular quarterly dividend of $0.34 per common share. The dividend will be payable on December 1, 2004, to common shareholders of record on November 19, 2004, with the stock trading ex-dividend commencing November 17, 2004.

Results of Operations

"PartnerRe performed exceptionally well during the third quarter despite being challenged by difficult conditions in the catastrophe business," Mr. Thiele said. "Our Non-Life combined ratio of 99.5% included $137 million or 16 points from the four Florida/Caribbean hurricanes. The fact that we were able to withstand that level of loss and still remain profitable is a testament to both our treaty underwriting skills and the excellent spread of business that PartnerRe has achieved."

Results by Segment

The Non-Life segment reported net premiums written of $707.1 million for the quarter, up 4% as compared to last year. Timing differences in the recording of written premiums affect quarterly year-over-year comparisons, and therefore, the year-to-date written premium growth rate is more reflective of the full-year trend. For the first nine months, Non-Life net premiums written were $2.9 billion, representing an increase of 10%. The combined ratio was 99.5% for the third quarter compared to 93.1% for the same period in 2003. The Non-Life technical result was $52.8 million compared to $102.9 million for the third quarter of 2003. The results for this quarter include $43.2 million of net reductions to prior year reserves. The nine month technical result was $290.6 million, compared to $303.6 million for the same period in 2003. The combined ratio for the nine month period was 94.2% compared to 92.6% in 2003.

The U.S. Property and Casualty business, which represented approximately 29% of total net premiums written for the quarter, reported net premiums written of $233.7 million, up 18% over the prior year's third quarter. Net premiums earned increased 7% during the quarter when compared to the same period in 2003. The technical ratio for this sub-segment was 118.1%, compared to 102.8% in the third quarter of 2003, primarily reflecting the increased level of large losses relating to the four Atlantic hurricanes, as well as approximately $17.8 million in additions to prior year reserves. For the first nine months of 2004, net premiums written increased 10% to $810.5 million. The nine-month technical ratio was 102.0%, compared to 98.1% in 2003.

The Global (Non-U.S.) Property and Casualty business, which represented approximately 19% of total net premiums written, reported net premiums written of $154.7 million for the third quarter of 2004, compared to $165.0 million for the same period in 2003. Timing differences in the recording of premiums affect the quarterly comparison, and therefore the year-to-date written premium growth rate is more reflective of the full-year-trend. For the first nine months of 2004, net premiums written increased 25% to $821.0 million. Net premiums earned during the quarter were $212.9 million, up 10% from $193.6 million in last year's third quarter. The technical ratio for this sub-segment for the third quarter was 99.7% compared to 113.8% for the same period in 2003, reflecting strong results in both property and casualty lines, as well as approximately $16.1 million in net reductions to prior year reserves. The nine-month technical ratio was 101.2%, compared to 99.8% in 2003.

The Worldwide Specialty business, which represented approximately 40% of total net premiums written for the quarter, reported net premiums written of $318.7 million for the third quarter, essentially flat with the same prior year period. Net premiums earned were down 5% for the quarter, compared to the same period in 2003. This sub-segment's technical ratio was 76.4%, compared to 67.4% for the third quarter of 2003, reflecting the increased level of large catastrophe losses during the quarter, partially offset by net reserve reductions for prior years of approximately $44.8 million. For the nine-month period, net premiums written increased 3% to $1.3 billion. The nine-month technical ratio was 72.2%, compared to 74.0% in 2003.

The Life segment, which markets coverages primarily in Europe, Canada and Latin America, and represented approximately 12% of total net premiums written in the quarter, reported net premiums written of $97.0 million for the quarter, reflecting 60% growth over the third quarter of 2003. The allocated underwriting result was breakeven for the quarter, compared to a similar result in the third quarter of 2003. For the nine-month period, net premiums written increased 36% to $283.7 million, with an allocated underwriting loss of $3.5 million, compared to a gain of $3.2 million for the comparable period in 2003.

The ART (Alternative Risk Transfer) segment comprises finite reinsurance, structured finance, weather related products, and the results of the Company's recent investment in Channel Re. Premiums are not a representative measure of activity in ART, as reinsurance accounting does not apply for much of the business in this segment. The ART segment recognizes reinsurance revenues, gross margins, net spreads, or changes in the value of derivative instruments on its various transactions either on the "premium written", "premium earned", "investment income", or "other income" line of the income statement, in accordance with the applicable accounting guidance. The underwriting result for this segment was a gain of $1 million for the third quarter of 2004, comparable to a similar result in the third quarter of 2003.

Commentary and Outlook

"As we enter the important January 1 renewal season, we remain realistic about the state of the global reinsurance market," said Mr. Thiele. "While we expect the recent natural catastrophes and competitive dislocations to have a steadying influence on pricing in some lines, we continue to expect prices and terms and conditions to be more competitive at January 1. We think this is an excellent environment to highlight PartnerRe's financial strength and underwriting and relationship management skills.

"As for the remainder of 2004, we believe we can achieve our stated plan for the year of a minimum of $6.90 in operating earnings per share, assuming a reasonable level of large losses during the fourth quarter."

_____________________________________________

The Company uses operating earnings, diluted operating earnings per share and operating return on beginning common shareholders' equity to measure performance, as these measures focus on the underlying fundamentals of our operations without the influence of realized gains and losses from the sale of investments, which is driven by the timing of the disposition of investments and not by our operating performance. For planning purposes, the Company does not anticipate realized investment gains or losses. The Company also uses technical ratio and technical result as measures of underwriting performance. These metrics exclude overhead expenses. All references to per share amounts in this press release are on the basis of fully diluted shares. Certain reclassifications have been made to prior year consolidated financial statement amounts to conform to the current year presentation and the new segment presentation.

_____________________________________________

PartnerRe Ltd. is a leading global reinsurer, providing multi-line reinsurance to insurance companies. Risks reinsured include property, casualty, motor, agriculture, aviation/space, catastrophe, credit/surety, engineering/energy, marine, special risks, other lines, life/annuity and health, and alternative risk transfer solutions. Total revenues were $3.9 billion in 2003. As of September 30, 2004, total assets were $11.9 billion, total capitalization was $3.4 billion and total shareholders' equity was $2.8 billion. Our major reinsurance operations have ratings of AA- from Standard & Poor's, Aa3 from Moody's, A+ from A.M. Best, and AA from Fitch.

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. Citigate Sard Verbinnen (441) 292-0888 (212) 687-8080 Investor Contact: Robin Sidders Jim Barron/Hallie Bozzi

Media Contact: Celia Powell