PartnerRe Ltd. Reports Fourth Quarter and Record Full Year 2004
Results and Increase in Dividend * Fourth Quarter Net Income per
share of $2.54; Operating Earnings per share of $2.25 PEMBROKE,
Bermuda, Feb. 7 /PRNewswire-FirstCall/ -- PartnerRe Ltd. (NYSE:
PRE) today reported net income of $143.7 million, or $2.54 per
share on a fully diluted basis, for the fourth quarter of 2004.
This net income includes net after-tax realized gains on
investments of $16.1 million or $0.29 per share. Net income for the
fourth quarter of 2003, including net after-tax realized gains on
investments of $9.3 million or $0.17 per share, was $104.5 million
or $1.84 per share. Operating earnings for the fourth quarter of
2004 were $120.8 million or $2.25 per share on a fully diluted
basis. Operating earnings exclude net after-tax realized investment
gains and losses and are calculated after payment of preferred
dividends. This compares to operating earnings of $90.3 million, or
$1.67 per share, for the fourth quarter of 2003. All references to
per share amounts are on a fully diluted basis. For the year ended
December 31, 2004, net income was $492.4 million or $8.71 per
share. Net income for the period includes a net after-tax realized
gain on investments of $78.1 million or $1.44 per share. Operating
earnings were $392.8 million, or $7.27 per share. Net income for
the full year 2003 was $467.7 million or $8.13 per share including
net after-tax realized gains of $80.0 million, or $1.48 per share.
Operating earnings for the same period in 2003 were $358.3 million
or $6.65 per share. Commenting on the 2004 results, PartnerRe
President & Chief Executive Officer Patrick Thiele said, "We
had an excellent fourth quarter to close out 2004 with record
results that are well ahead of our stated plan. Despite facing a
challenging year in terms of the number of natural catastrophes and
magnitude of losses associated with them, PartnerRe performed
exceptionally well, achieving a full year operating return on
equity of 17% and growing book value by 20% to year-end book value
per share of $50.99. Our achievements in 2004 underscore the
strength of the Company both financially and operationally."
Summary unaudited consolidated financial data for the period is set
out below. U.S.$ thousands (except per share amounts and ratios)
Three months ended Twelve months ended December 31 December 31 2004
2003 2004 2003 Net Premiums Written $682,998 $772,509 $3,852,672
$3,589,641 Net Premiums Earned $942,332 $946,148 $3,733,740
$3,503,442 Non-Life Combined Ratio 94.5% 95.1% 94.3% 93.2% Net
Income $143,669 $104,530 $492,353 $467,679 Net Income per share(a)
$2.54 $1.84 $8.71 $8.13 Net Operating Earnings(a) $120,813 $90,286
$392,751 $358,319 Net Operating Earnings per share(a) $2.25 $1.67
$7.27 $6.65 (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. Net premiums written
for the fourth quarter 2004 were $683.0 million, a 12% decrease
over the comparable period in 2003. Total revenues for the quarter
were essentially flat with the fourth quarter of 2003 at $1.1
billion, including $942.3 million of net premiums earned; net
investment income of $80.0 million -- an increase of 9%; and net
realized investment gains of $38.6 million. For the year ended
December 31, 2004, net premiums written were $3.9 billion, a 7%
increase over the full year 2003. Total revenues for 2004 were $4.2
billion, including $3.7 billion of net premiums earned, net
investment income of $298.0 million, and net realized investment
gains of $117.3 million. Total revenues for 2003 were $3.9 billion.
At December 31, 2004, total assets were $12.5 billion, total
capitalization was $3.8 billion, and total shareholders' equity was
$3.4 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
December 31, 2004 was $50.99 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 2004, the Company repurchased 2.9 million
common shares, including 2 million common shares which were part of
an accelerated share repurchase agreement executed on December 30,
2004. This partially offset the issuance of 3,478,400 common shares
on December 31, 2004, following settlement of the stock purchase
contracts associated with the 8% Premium Equity Participating
Security (PEPS) Units, which were subsequently retired. Separately,
the Company announced today that its Board of Directors has
increased the annual common share dividend by 12% to $1.52 per
share from $1.36 per share. Today, the Board declared a regular
quarterly dividend of $0.38 per common share, representing the
increased level of dividend. The dividend will be payable on March
1, 2005, to common shareholders of record on February 18, 2005,
with the stock trading ex-dividend commencing February 16, 2005.
Results of Operations "Our results this year clearly demonstrate
the excellent level of portfolio diversification that we have
achieved," Mr. Thiele said. "While there were variations in results
across operating units, overall we achieved excellent underwriting
profitability with a Non-Life combined ratio of 94.3%. "Our
Worldwide Specialty operations posted an exceptional 71.2%
technical ratio on $1.5 billion in net premiums earned for the
year. These outstanding results helped to offset results in both
our U.S. and Global Property & Casualty operations, which were
impacted by reserve strengthening and the significant natural
catastrophes of the third and fourth quarters. We continued to grow
both our ART and Life segments, and they are increasingly important
components of our overall diversification strategy. "Our investment
operations also added significant value during the year," said Mr.
Thiele. "Investment income increased 14% partially driven by our
excellent cash flow of $1.3 billion, and we generated over $117
million in realized capital gains." Results by Segment The Non-Life
segment reported net premiums written of $561.8 million for the
quarter, down 17% as compared to the same period in 2003. Timing
differences in the recording of written premiums affect quarterly
year-over- year comparisons, and therefore, the full year written
premium growth rate is the more relevant measure. For the full
year, Non-Life net premiums written were $3.4 billion, representing
an increase of 5%. The combined ratio was 94.5% for the fourth
quarter compared to 95.1% for the same period in 2003. The Non-Life
technical result was $93.5 million in the fourth quarter of 2004
compared to $87.7 million for the prior year period. The results
for this quarter include $26 million in estimated claims from the
Indian Ocean tsunami, as well as $8 million of net reductions to
prior year reserves. The full year technical result was $384.1
million, compared to $391.4 million for the same period in 2003.
The combined ratio for the year was 94.3% compared to 93.2% in
2003. The U.S. Property and Casualty business, which represented
approximately 26% of total net premiums written for the year,
reported net premiums written of $179.9 million, down 1% from the
prior year's fourth quarter. Net premiums earned decreased 5%
during the quarter when compared to the same period in 2003. The
technical ratio for this sub-segment was 97.9% compared to 112.8%
in the fourth quarter of 2003. For the full year of 2004, net
premiums written increased 8% to $990.3 million. The full year
technical ratio was 101.0% compared to 101.9% in 2003. The Global
(Non-U.S.) Property and Casualty business, which represented
approximately 24% of total net premiums written for the year,
reported net premiums written of $123.8 million for the fourth
quarter of 2004, compared to $193.9 million for the same period in
2003. Timing differences in the recording of premiums affect the
quarterly comparison. For the full-year 2004, net premiums written
increased 11% to $944.8 million. Net premiums earned during the
quarter were $231.5 million, up 1% from $229.6 million in the
fourth quarter 2003. The technical ratio for this sub-segment was
113.3% for the fourth quarter compared to 98.2% for the same period
in 2003, primarily reflecting $23 million in net additions to prior
year reserves, as increases in motor excess of loss reserves were
partially offset by reductions in reserves for property business.
The full year technical ratio was 104.2%, compared to 99.3% in
2003. The Worldwide Specialty business, which represented
approximately 39% of total net premiums written for the year,
reported net premiums written of $258.1 million for the fourth
quarter, down 14% from the fourth quarter of 2003. Net premiums
earned were down 6% for the quarter, compared to the same period in
2003. This sub-segment's technical ratio was 68.1%, compared to
72.3% for the fourth quarter of 2003, reflecting the low level of
catastrophe activity during the quarter, as well as net reserve
reductions for prior years of approximately $33 million. For the
full year, net premiums written were essentially flat with 2003 at
$1.5 billion. The full year technical ratio was 71.2%, compared to
73.5% in 2003. The Life segment, which markets coverages primarily
in Europe, Canada and Latin America, and represented approximately
11% of total net premiums written for the year, reported net
premiums written of $120.3 million for the quarter, realizing 31%
growth over the fourth quarter of 2003. The allocated underwriting
result was a loss of $1 million, compared to a gain of $3 million
for the fourth quarter 2003, reflecting approximately $5 million in
estimated claims from the Indian Ocean tsunami. For the full year,
net premiums written increased 35% to $404.0 million, with an
allocated underwriting loss of $4 million, compared to a gain of $6
million in 2003. The ART (Alternative Risk Transfer) segment
comprises finite reinsurance, structured finance, weather related
products, and the results of the Company's 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"
lines 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 fourth quarter of 2004, compared to a
gain of $10 million in the fourth quarter of 2003. For the full
year, the ART segment posted a gain of $3 million, compared to a
gain of $11 million for 2003. Fourth quarter and full year 2004
results were adversely impacted by weather and catastrophe-related
losses. Commentary and Outlook "Following an exceptional year in
2004, the January 2005 renewal season was mixed for PartnerRe in
terms of pricing and potential future profitability," Mr. Thiele
said. "While the U.S. was rationally competitive with pricing in
most lines at reasonable profitability levels, European and
international markets were somewhat more competitive than expected.
Our financial strength and franchise allowed us to gain a fair
amount of new business. However, many customers increased their
retentions and we also reduced our participation in those instances
where competitive pressures pushed prices and terms and conditions
below our standards. As a result, we underwrote a diversified
portfolio priced to achieve profitability above our long-term
objective, but we expect total consolidated net written premiums to
be flat to down 5% in 2005, barring unusual market conditions." 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. At December 31, 2004, total
revenues were $4.2 billion, total assets were $12.5 billion, total
capitalization was $3.8 billion and total shareholders' equity was
$3.4 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:
http://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. PartnerRe Ltd. Consolidated Statements
of Operations and Comprehensive Income (Expressed in thousands of
U.S dollars, except per share data) (Unaudited) For the For the
three three months months ended ended For the For the December
December year ended year ended 31, 31, December 31, December 31,
2004 2003 2004 2003 Revenues Gross premiums written $686,551
$775,321 $3,887,516 $3,624,518 Net premiums written $682,998
$772,509 $3,852,672 $3,589,641 Decrease (increase) in unearned
premiums 259,334 173,639 (118,932) (86,199) Net premiums earned
942,332 946,148 3,733,740 3,503,442 Net investment income 79,961
73,156 297,997 261,697 Net realized investment gains 38,646 18,984
117,339 86,656 Other income 6,889 12,055 23,623 21,101 Total
Revenues 1,067,828 1,050,343 4,172,699 3,872,896 Expenses Losses
and loss expenses including life policy benefits 625,268 661,597
2,475,743 2,365,742 Acquisition costs 227,798 203,875 901,554
773,230 Other operating expenses 67,791 63,772 271,331 235,739
Interest expense 10,204 6,031 40,744 18,570 Net foreign exchange
gains (14,680) (2,744) (16,586) (11,824) Total Expenses 916,381
932,531 3,672,786 3,381,457 Income before distributions related to
trust preferred and mandatorily redeemable preferred securities and
taxes 151,447 117,812 499,913 491,439 Distributions related to
trust preferred and mandatorily redeemable preferred securities --
4,010 -- 21,650 Income tax expense 7,778 9,272 7,560 2,110 Net
income $143,669 $104,530 $492,353 $467,679 Preferred dividends
$6,804 $4,970 $21,485 $29,390 Operating earnings available to
common shareholders $120,813 $90,286 $392,751 $358,319
Comprehensive income $245,827 $135,414 $576,289 $562,043 Per Share
Data: Earnings per common share: Basic operating earnings $2.27
$1.68 $7.34 $6.73 Net realized investment gains, net of tax 0.31
0.17 1.46 1.50 Basic net income $2.58 $1.85 $8.80 $8.23 Weighted
average number of common shares outstanding 53,130.0 53,674.9
53,490.8 53,238.6 Diluted operating earnings $2.25 $1.67 $7.27
$6.65 Net realized investment gains, net of tax 0.29 0.17 1.44 1.48
Diluted net income $2.54 $1.84 $8.71 $8.13 Weighted average number
of common and common equivalent shares outstanding 53,809.0
54,176.1 54,047.4 53,895.9 PartnerRe Ltd. Consolidated Balance
Sheets (Expressed in thousands of U.S. dollars, except per share
data and parenthetical share data) (Unaudited) December 31,
December 31, 2004 2003 Assets Investments and cash Fixed
maturities, at fair value (amortized cost: 2004, $6,611,683; 2003,
$5,241,494) $6,723,580 $5,343,651 Short-term investments, at fair
value (amortized cost: 2004, $28,691; 2003, $46,271) 28,694 46,307
Equities, at fair value (cost: 2004, $887,006; 2003, $614,697)
1,010,777 713,950 Trading securities, at fair value (cost: 2004,
$102,371; 2003, $113,385) 108,402 122,544 Cash and cash
equivalents, at fair value, which approximates amortized cost
436,003 558,692 Other invested assets 90,268 11,776 Total
investments and cash 8,397,724 6,796,920 Accrued investment income
151,871 132,291 Reinsurance balances receivable 1,356,771 1,214,269
Reinsurance recoverable on paid and unpaid losses 180,710 188,706
Funds held by reinsured companies 1,100,107 1,068,432 Deferred
acquisition costs 409,332 354,854 Deposit assets 299,408 508,037
Taxes recoverable 81,235 80,835 Goodwill 429,519 429,519 Other
104,564 129,337 Total Assets $12,511,241 $10,903,200 Liabilities
Unpaid losses and loss expenses $5,766,629 $4,755,059 Policy
benefits for life and annuity contracts 1,277,101 1,162,016
Unearned premiums 1,194,778 1,035,450 Funds held under reinsurance
treaties 21,875 27,399 Deposit liabilities 344,202 570,634
Long-term debt 220,000 220,000 Accounts payable, accrued expenses
and other 128,606 132,064 Debt related to trust preferred
securities 206,186 206,186 Mandatorily redeemable preferred
securities -- 200,000 Total Liabilities 9,159,377 8,308,808
Shareholders' Equity Common shares (par value $1.00, issued and
outstanding: 2004, 54,854,398; 2003, 53,741,553) 54,854 53,742
Series C cumulative preferred shares (par value $1.00, issued and
outstanding: 2004 and 2003, 11,600,000; aggregate liquidation
preference: 2004 and 2003, $290,000,000) 11,600 11,600 Series D
cumulative preferred shares (par value $1.00, issued and
outstanding: 2004, 9,200,000; 2003, nil; aggregate liquidation
preference: 2004, $230,000,000; 2003, nil) 9,200 -- Additional
paid-in capital 1,288,292 1,023,167 Deferred compensation (199)
(125) Accumulated other comprehensive income: Net unrealized gains
on investments, net of tax 194,575 166,492 Currency translation
adjustment 72,510 16,657 Retained earnings 1,721,032 1,322,859
Total Shareholders' Equity 3,351,864 2,594,392 Total Liabilities
and Shareholders' Equity $12,511,241 $10,903,200 Shareholders'
Equity Per Common Share $51.63 $42.88 Diluted Book Value Per Common
and Common Equivalent Share (assuming exercise of stock options and
warrants) $50.99 $42.48 Number of Diluted Common Shares Outstanding
55,533.4 54,242.8 PartnerRe Ltd. Supplementary Information (in
millions of U.S. dollars) (Unaudited) SEGMENT INFORMATION For the
three months ended December 31, 2004 Global (Non- Total U.S. U.S.
Worldwide Non-Life ART P&C P&C) Specialty Segment Segement
(a) Gross premiums written $180 $124 $258 $562 $1 Net premiums
written $180 $124 $258 $562 $1 Decrease in unearned premiums 28 107
119 254 -- Net premiums earned $208 $231 $377 $816 $1 Losses and
loss expenses including life policy benefits (150) (203) (172)
(525) 1 Acquisition costs (54) (60) (84) (198) -- Technical Result
$4 $(32) $121 $93 $2 Other income n/a n/a n/a 6 1 Other operating
expenses n/a n/a n/a (48) (2) Underwriting Result n/a n/a n/a $51
$1 Net investment income n/a n/a n/a n/a -- Allocated Underwriting
Result(6) n/a n/a n/a n/a n/a Net realized investment gains n/a n/a
n/a n/a n/a Interest expense n/a n/a n/a n/a n/a Net foreign
exchange gains n/a n/a n/a n/a n/a Income tax expense n/a n/a n/a
n/a n/a Net income n/a n/a n/a n/a n/a Loss ratio(1) 72.3% 87.5%
45.7% 64.3% Acquisition ratio(2) 25.6 25.8 22.4 24.2 Technical
ratio(3) 97.9% 113.3% 68.1% 88.5% Other overhead expense ratio(4)
6.0 Combined ratio(5) 94.5% Life Segment Corporate Total Gross
premiums written $124 $ -- $687 Net premiums written $120 $ -- $683
Decrease in unearned premiums 5 -- 259 Net premiums earned $125 $
-- $942 Losses and loss expenses including life policy benefits
(101) -- (625) Acquisition costs (30) -- (228) Technical Result
$(6) $ -- $89 Other income -- -- 7 Other operating expenses (6)
(12) (68) Underwriting Result $(12) n/a $28 Net investment income
11 69 80 Allocated Underwriting Result(6) $(1) n/a n/a Net realized
investment gains n/a 39 39 Interest expense n/a (10) (10) Net
foreign exchange gains n/a 15 15 Income tax expense n/a (8) (8) Net
income n/a n/a $144 Loss ratio (1) Acquisition ratio (2) Technical
ratio (3) Other overhead expense ratio (4) Combined ratio (5) (A)
This segment includes the Company's share of Channel Re's net
income in the amount of $2.5 million. The 2003 period includes no
income from Channel Re as the Company acquired its equity ownership
in the first quarter of 2004. For the three months ended December
31, 2003 Global (Non- Total U.S. U.S. Worldwide Non-Life ART
P&C P&C) Specialty Segment Segement (a) Gross premiums
written $181 $193 $303 $677 $5 Net premiums written $182 $194 $301
$677 $4 Decrease (increase) in unearned premiums 37 36 101 174 (1)
Net premiums earned $219 $230 $402 $851 $3 Losses and loss expenses
including life policy benefits (193) (176) (214) (583) (2)
Acquisition costs (54) (50) (76) (180) -- Technical Result $(28) $4
$112 $88 $1 Other income n/a n/a n/a -- 12 Other operating expenses
n/a n/a n/a (47) (3) Underwriting Result n/a n/a n/a $41 $10 Net
investment income n/a n/a n/a n/a -- Allocated Underwriting
Result(6) n/a n/a n/a n/a n/a Net realized investment gains n/a n/a
n/a n/a n/a Interest expense n/a n/a n/a n/a n/a Net foreign
exchange gains n/a n/a n/a n/a n/a Income tax expense n/a n/a n/a
n/a n/a Distributions related to trust preferred and mandatorily
redeemable preferred securities n/a n/a n/a n/a n/a Net income n/a
n/a n/a n/a n/a Loss ratio (1) 88.1 % 76.7 % 53.4 % 68.5 %
Acquisition ratio (2) 24.7 21.5 18.9 21.1 Technical ratio (3) 112.8
% 98.2 % 72.3 % 89.6 % Other overhead expense ratio (4) 5.5
Combined ratio (5) 95.1 % Life Segment Corporate Total Gross
premiums written $93 $ -- $775 Net premiums written $92 $ -- $773
Decrease (increase) in unearned premiums -- -- 173 Net premiums
earned $92 $ -- $946 Losses and loss expenses including life policy
benefits (76) -- (661) Acquisition costs (24) -- (204) Technical
Result $(8) $ -- 81 Other income -- -- 12 Other operating expenses
(6) (8) (64) Underwriting Result $(14) n/a $29 Net investment
income 17 56 73 Allocated Underwriting Result(6) $3 n/a n/a Net
realized investment gains n/a 19 19 Interest expense n/a (6) (6)
Net foreign exchange gains n/a 3 3 Income tax expense n/a (9) (9)
Distributions related to trust preferred and mandatorily redeemable
preferred securities n/a (4) (4) Net income n/a n/a $105 Loss ratio
(1) Acquisition ratio (2) Technical ratio (3) Other overhead
expense ratio (4) Combined ratio (5) (1) Loss ratio is obtained by
dividing losses and loss expenses by net premiums earned. (2)
Acquisition ratio is obtained by dividing acquisition costs by net
premiums earned. (3) Technical ratio is defined as the sum of the
loss ratio and the acquisition ratio. (4) Other overhead expense
ratio is obtained by dividing other operating expenses by net
premiums earned. (5) Combined ratio is the sum of the technical
ratio and the other overhead expense ratio. (6) Allocated
Underwriting Result is defined as net premiums earned and allocated
investment income less losses and loss expenses, acquisition costs
and other overhead expenses. PartnerRe Ltd. Supplementary
Information (in millions of U.S. dollars) (Unaudited) SEGMENT
INFORMATION For the year ended December 31, 2004 Global (Non- Total
U.S. U.S. Worldwide Non-Life ART P&C P&C) Specialty Segment
Segement (a) Gross premiums written $991 $944 $1,531 $3,466 $5 Net
premiums written $990 $945 $1,509 $3,444 $5 (Increase) decrease in
unearned premiums (97) (16) (9) (122) 1 Net premiums earned $893
$929 $1,500 $3,322 $6 Losses and loss expenses including life
policy benefits (699) (730) (744) (2,173) (7) Acquisition costs
(204) (238) (323) (765) (1) Technical Result $(10) $(39) $433 $384
$(2) Other income n/a n/a n/a 6 18 Other operating expenses n/a n/a
n/a (194) (13) Underwriting Result n/a n/a n/a $196 $3 Net
investment income n/a n/a n/a n/a -- Allocated Underwriting
Result(6) n/a n/a n/a n/a n/a Net realized investment gains n/a n/a
n/a n/a n/a Interest expense n/a n/a n/a n/a n/a Net foreign
exchange gains n/a n/a n/a n/a n/a Income tax expense n/a n/a n/a
n/a n/a Net income n/a n/a n/a n/a n/a Loss ratio(1) 78.2 % 78.6 %
49.6 % 65.4 % Acquisition ratio(2) 22.8 25.6 21.6 23.0 Technical
ratio(3) 101.0 % 104.2 % 71.2 % 88.4 % Other overhead expense
ratio(4) 5.9 Combined ratio (5) 94.3 % Life Segment Corporate Total
Gross premiums written $417 $ -- $3,888 Net premiums written $404 $
-- $3,853 (Increase) decrease in unearned premiums 2 -- (119) Net
premiums earned $406 $ -- $3,734 Losses and loss expenses including
life policy benefits (296) -- (2,476) Acquisition costs (136) --
(902) Technical Result $(26) $ -- $356 Other income - -- 24 Other
operating expenses (22) (42) (271) Underwriting Result $(48) n/a
$109 Net investment income 44 254 298 Allocated Underwriting Result
(6) $(4) n/a n/a Net realized investment gains n/a 117 117 Interest
expense n/a (41) (41) Net foreign exchange gains n/a 17 17 Income
tax expense n/a (8) (8) Net income n/a n/a $492 Loss ratio (1)
Acquisition ratio (2) Technical ratio (3) Other overhead expense
ratio (4) Combined ratio (5) (A) This segment includes the
Company's share of Channel Re's net income in the amount of $6.0
million. The 2003 period includes no income from Channel Re as the
Company acquired its equity ownership in the first quarter of 2004.
For the year ended December 31, 2003 Global (Non- Total U.S. U.S.
Worldwide Non-Life ART P&C P&C) Specialty Segment Segement
(a) Gross premiums written $920 $848 $1,542 $3,310 $5 Net premiums
written $920 $849 $1,517 $3,286 $4 (Increase) decrease in unearned
premiums (77) (10) 1 (86) (1) Net premiums earned $843 $839 $1,518
$3,200 $3 Losses and loss expenses including life policy
benefits(645) (625) (827) (2,097) (2) Acquisition costs (214) (209)
(289) (712) -- Technical Result $(16) $5 $402 $391 $1 Other income
n/a n/a n/a -- 21 Other operating expenses n/a n/a n/a (176) (11)
Underwriting Result n/a n/a n/a $215 $11 Net investment income n/a
n/a n/a n/a -- Allocated Underwriting Result(6) n/a n/a n/a n/a n/a
Net realized investment gains n/a n/a n/a n/a n/a Interest expense
n/a n/a n/a n/a n/a Net foreign exchange gains n/a n/a n/a n/a n/a
Income tax expense n/a n/a n/a n/a n/a Distributions related to
trust preferred and mandatorily redeemable preferred securities n/a
n/a n/a n/a n/a Net income n/a n/a n/a n/a n/a Loss ratio(1) 76.5%
74.5% 54.5% 65.5% Acquisition ratio(2) 25.4 24.8 19.0 22.2
Technical ratio (3) 101.9% 99.3% 73.5% 87.7% Other overhead expense
ratio(4) 5.5 Combined ratio (5) 93.2% Life Segment Corporate Total
Gross premiums written $310 $ -- $3,625 Net premiums written $300 $
-- $3,590 (Increase) decrease in unearned premiums - -- (87) Net
premiums earned $300 $ -- $3,503 Losses and loss expenses including
life policy benefits (267) -- (2,366) Acquisition costs (61) --
(773) Technical Result $(28) $ -- $364 Other income -- -- 21 Other
operating expenses (19) (30) (236) Underwriting Result $(47) n/a
$149 Net investment income 53 209 262 Allocated Underwriting Result
(6) $6 n/a n/a Net realized investment gains n/a 87 87 Interest
expense n/a (18) (18) Net foreign exchange gains n/a 12 12 Income
tax expense n/a (2) (2) Distributions related to trust preferred
and mandatorily redeemable preferred securities n/a (22) (22) Net
income n/a n/a $468 Loss ratio (1) Acquisition ratio (2) Technical
ratio (3) Other overhead expense ratio (4) Combined ratio (5) (1)
Loss ratio is obtained by dividing losses and loss expenses by net
premiums earned. (2) Acquisition ratio is obtained by dividing
acquisition costs by net premiums earned. (3) Technical ratio is
defined as the sum of the loss ratio and the acquisition ratio. (4)
Other overhead expense ratio is obtained by dividing other
operating expenses by net premiums earned. (5) Combined ratio is
the sum of the technical ratio and the other overhead expense
ratio. (6) Allocated Underwriting Result is defined as net premiums
earned and allocated investment income less losses and loss
expenses, acquisition costs and other overhead expenses. PartnerRe
Ltd. Supplementary Information (Unaudited) For the For the three
three For the For the months months year year ended ended ended
ended December December December December 31, 31, 31, 31, 2004 2003
2004 2003 Distribution of Net Premiums Written by Line of Business:
Non-Life Property and Casualty Property 18 % 22 % 19 % 21 %
Casualty 19 17 21 19 Motor 7 10 10 10 Worldwide Specialty
Agriculture 5 5 4 4 Aviation/Space 10 11 6 8 Catastrophe 2 2 9 10
Credit/Surety 8 6 6 5 Engineering/Energy 6 7 6 7 Marine 3 2 2 3
Special Risk 4 5 6 5 ART -- 1 -- -- Life 18 12 11 8 Geographic
Distribution of Gross Premiums Written: Europe 43 % 42 % 45 % 41 %
North America 43 45 40 44 Asia, Australia and New Zealand 8 7 9 10
Latin America and the Caribbean 5 5 5 4 Africa 1 1 1 1 As at
December 31, 2004 Credit Ratings (Financial Strength Ratings):
Standard & Poor's AA- Moodys Aa3 A.M. Best A+ Fitch AA As at As
at December 31, December 31, 2004 2003 (in thousands of U.S. (in
thousands of U.S. dollars) dollars) Capital Structure: Long-term
debt $220,000 6 % $ 220,000 7 % Trust Preferred Securities(1)
200,000 5 200,000 6 Series B Cumulative Redeemable Preferred Shares
(PEPS) -- -- 200,000 6 6.75% Series C Cumulative Preferred Shares,
aggregate liquidation 290,000 8 290,000 9 6.5% Series D Cumulative
Preferred Shares, aggregate liquidation 230,000 6 -- -- Common
Shareholders' Equity 2,831,864 75 2,304,392 72 Total Capital
$3,771,864 100 % $ 3,214,392 100 % (1) Neither the Trust that
issued the securities nor PartnerRe Finance, which owns the Trust,
meet the consolidation requirements of FIN 46(R). Accordingly, the
Company shows the related intercompany debt of $206.2 million on
its Consolidated Balance Sheets. PartnerRe Ltd. Supplementary
Information (Unaudited) As at As at December 31, December 31, 2004
2003 Investment Portfolio: Credit Quality AAA 62 % 57 % AA 2 3 A 18
19 BBB 12 14 Below Investment Grade/Unrated 6 7 By Class U.S.
Government 5 % 7 % U.S. Mortgage/Asset Backed 16 17 U.S. Corporates
23 26 Foreign Fixed Income 34 31 Equities and Equity Substitutes 16
15 Cash (net of pending transactions) 6 4 Expected average duration
3.4 Yrs 3.6 Yrs Average yield to maturity at market 3.8 % 3.8 %
(fixed income securities and cash) Average Credit Quality AA AA For
the For the three three For the For the months months year year
ended ended ended ended December December December December 31, 31,
31, 31, 2004 2003 2004 2003 (in thousands of U.S. dollars except
per share data) Reconciliation of GAAP and non-GAAP measures: Net
income $143,669 $104,530 $492,353 $467,679 Less: Net realized
investment gains, net of tax 16,052 9,274 78,117 79,970 Dividends
to preferred shareholders 6,804 4,970 21,485 29,390 Operating
earnings available to common shareholders $120,813 $90,286 $392,751
$358,319 Diluted net income per common share $2.54 $1.84 $8.71
$8.13 Less: Net realized investment gains, net of tax, per common
share 0.29 0.17 1.44 1.48 Diluted operating earnings per common
share $2.25 $1.67 $7.27 $6.65 Annualized return on beginning common
shareholders' equity calculated with net income 23.8% 21.8% 20.4%
24.0% Less: Net realized investment gains, net of tax 2.8 2.0 3.4
4.4 Annualized operating return on equity 21.0% 19.8% 17.0% 19.6%
DATASOURCE: PartnerRe Ltd. CONTACT: PartnerRe Ltd. Investor
Contact: Robin Sidders, Media Contact: Celia Powell,
+1-441-292-0888; or Jim Barron or Hallie Bozzi of Citigate Sard
Verbinnen, +1-212-687-8080, for PartnerRe Ltd. Web site:
http://www.partnerre.com/
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