PartnerRe Ltd. Reports First Quarter 2013 Results (Excerpt)

PEMBROKE, Bermuda – 30 April, 2013 - PartnerRe Ltd. (Ticker: PRE.BH) has reported net income available to common shareholders of $210.5 million, or $3.53 per share for the first quarter of 2013. This includes net after-tax realized and unrealized gains on investments of $12.3 million, or $0.20 per share. Net income available to common shareholders for the first quarter of 2012 was $344.7 million, or $5.24 per share, including net after-tax realized and unrealized gains on investments of $159.2 million, or $2.42 per share. The Company recorded operating earnings of $202.1 million, or $3.39 per share, for the first quarter of 2013. This compares to operating earnings of $181.7 million, or $2.76 per share, for the first quarter 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 for the first quarter, PartnerRe President & Chief Executive Officer Costas Miranthis said, “We began 2013 with a very good first quarter result, driven by strong underwriting performance, generating a Non-life combined ratio of 81.7%, and growth in our underlying portfolio. This, combined with modest gains in our investment portfolio resulted in book value growth of more than 2% for the quarter.”

“Reinsurance markets are evolving rapidly and present challenges. While underlying primary pricing continues to improve, reinsurance competition has intensified in recent months. As always our underwriting decisions over the coming months will be guided by careful evaluation of risks and returns.” Mr. Miranthis added. “The recently announced organizational changes position us to effectively and efficiently focus on markets that continue to provide opportunities to generate attractive returns.”

Highlights for the first quarter of 2013 compared to the same period in 2012 include:

Results of operations:

·         Net premiums written of $1.6 billion were up 11%, or 10% on a constant foreign exchange basis, primarily related to agricultural business in the North America sub-segment. To a lesser extent, the increase in net premiums written was also due to new business in the Global (Non-U.S.) P&C sub-segment, and the  

inclusion of Presidio’s business in the Life and Health segment from January 1, 2013.

·         Net premiums earned of $1.1 billion were up 16%, or up 15% on a constant foreign exchange basis. The increase in net premiums earned was primarily due to the new agricultural business in the North America sub-segment, new business in the Global Specialty sub-segment and the inclusion of Presidio.

·         The Non-life combined ratio was 81.7%. The combined ratio benefited from favorable prior year development of $183 million (or 19.8 points). All Non-life sub-segments experienced net favorable development on prior accident years during the first quarter of 2013, with the Global Specialty and Global (Non-U.S.) P&C sub-segments contributing the most significantly.

·         Net investment income of $124 million, was down 16%, or 18% on a constant foreign exchange basis. The decrease in net investment income primarily reflects lower reinvestment rates.

·         Pre-tax net realized and unrealized investment gains were $23 million.

·         The effective tax rate on operating earnings and non-operating earnings was 10% and 50%, respectively.

Balance sheet and capitalization:

·         Total investments, cash and funds held – directly managed were $17.7 billion at March 31, 2013, down 2% compared to December 31, 2012.

·         Net Non-life loss and loss expense reserves were $10.0 billion at March 31, 2013, down 4% compared to December 31, 2012 primarily due to loss payments associated with the 2011 and 2012 catastrophe events and the impact of the stronger U.S. dollar.

·         Net policy benefits for life and annuity contracts were $1.8 billion at March 31, 2013, down 2% when compared to December 31, 2012 primarily due to the impact of the stronger U.S. dollar.

·         Total capital was $7.7 billion at March 31, 2013, modestly down compared to December 31, 2012. The modest decline was primarily driven by share repurchases, common and preferred dividend payments and the redemption of Series C preferred shares, which were primarily offset by net income for the first quarter and the issuance of Series F preferred shares.

·         The Company repurchased approximately 1.8 million common shares at a total cost of approximately $160 million during the first quarter of 2013. Since April 1, 2013, the Company has repurchased approximately 450 thousand common shares at a total cost of approximately $41 million. At April 29, 2013, approximately 4.7 million common shares remained under the current repurchase authorization.

·         Total shareholders’ equity attributable to PartnerRe Ltd. was $6.9 billion at March 31, 2013, modestly down compared to December 31, 2012. The modest decline was driven by the factors described above for total capital.

·         Book value per common share was $102.96 at March 31, 2013, up 2.1% compared to $100.84 at December 31, 2012. Tangible book value per common share was $92.91 at March 31, 2013, up 2.3% compared to $90.86 at December 31, 2012. The increases were primarily driven by net income for the first quarter and the accretive impact of share repurchases, which were partially offset by common and preferred dividend payments.

Segment and sub-segment highlights for the first quarter compared to the same period in 2012 include:

Non-life:

·         The Non-life segment’s net premiums written were up 10%. This increase was primarily driven by new agricultural business in the North America sub-segment and, to a lesser extent, new motor business in the Global (Non-U.S.) P&C sub-segment.

·         The North America sub-segment’s net premiums written were up 31% primarily driven by the agricultural line of business due to new business, the timing of renewals and a large downward premium adjustment in the same period of 2012. This sub-segment reported a technical ratio of 93.6%, which included 9.0 points (or $30 million) of net favorable prior year loss development. The technical ratio and net favorable prior year loss development include 4.8 points (or $16 million) of adverse development related to the 2012 U.S. drought losses.

·         The Global (Non-U.S.) P&C sub-segment’s net premiums written were up 6%, or 5% on a constant foreign exchange basis, primarily due to new business in the motor line of business and was partially offset by the impact of cancellations and non-renewals in the property line of business. This sub-segment reported a technical ratio of 70.5%, which included 34.8 points (or $58 million) of net favorable prior year loss development.

·         The Global Specialty sub-segment’s net premiums written were up 2% primarily due to new business in the agriculture and multi-line lines of business. These increases were partially offset by non-renewals and adjustments in the aviation/space and specialty property lines of business. This sub-segment reported a technical ratio of 77.0%, which included 17.9 points (or $60 million) of net favorable prior year loss development.

·         The Catastrophe sub-segment’s net premiums written were down 2%, or 3% on a constant foreign exchange basis. The modest decrease in net premiums written was primarily due to the restructuring of certain treaties, which was partially offset by new business. This sub-segment reported a technical ratio of (0.5)%, which included 40.1 points (or $35 million) of net favorable prior year loss development.

Life and Health:

·         The Life and Health segment’s net premiums written were up 16%, or 14% on a constant foreign exchange basis, primarily due to the inclusion of Presidio’s net premiums written from January 1, 2013.

·         The Life and Health segment’s allocated underwriting result, which includes allocated investment income and operating expenses, decreased to $16 million in the first quarter of 2013 compared to $21 million in the same period of 2012. The decrease was primarily due to a lower level of net favorable prior year’s loss development in the GMDB line of business.

Corporate and Other:

·         Investment and capital markets activities contributed income of $138 million to pre-tax net income, excluding investment income allocated to the Life and Health segment. Of this amount, income of $105 million was included in pre-tax operating earnings and an additional $33 million in net realized and unrealized gains on investments and earnings from equity investee companies was included in pre-tax non-operating income.

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 May 31, 2013, to common shareholders of record on May 20, 2013, with the stock trading ex-dividend commencing May 16, 2013.

The Company has posted its first 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.

PartnerRe Ltd.

Investor: Robin Sidders

Media: Celia Powell

441-292-0888

or

Sard Verbinnen & Co.

Drew Brown/Daniel Goldstein

212-687-8080

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, 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 March 31, 2013, total assets were $23.1 billion, total capital was $7.7 billion and total shareholders’ equity attributable to PartnerRe Ltd. was $6.9 billion.