PartnerRe Ltd. Reports Fourth Quarter and Full Year 2008 Results

Business Wire, Feb 2, 2009

PEMBROKE, Bermuda -- PartnerRe Ltd. (NYSE:PRE)

* Fourth Quarter Operating Earnings per share of $0.95; Net Income per share of $1.53

* Fourth Quarter Annualized Operating ROE of 5.7%; Annualized Net Income ROE of 9.1%

* Full Year Operating Earnings per share of $8.43; Net Income per share of $0.22

* Full Year Operating ROE of 12.3%; Net Income ROE of 0.3%

* Book Value of $63.95 per share, down 6% year over year

PartnerRe Ltd. (NYSE:PRE) today reported net income of $95.3 million, or $1.53 per share on a fully diluted basis for the fourth quarter of 2008. Net income includes net after-tax realized and unrealized gains on investments of $37.6 million, or $0.67 per share. Since the adoption by the Company of FAS 159 as of January 1, 2008, the Company presents on its Income Statement realized and unrealized changes in the market values of investments. Net income for the fourth quarter of 2007 was $180.6 million, or $3.04 per share on a fully diluted basis, including net after-tax realized losses on investments of $19.0 million, or $0.34 per share. Comparable numbers for 2007 do not include the impact of FAS 159. Operating earnings for the fourth quarter of 2008 were $53.9 million, or $0.95 per share on a fully diluted basis. This compares to operating earnings of $257.4 million, or $4.55 per share, for the fourth quarter of 2007. Operating earnings exclude net after-tax realized and unrealized investment gains and losses and net after-tax interest in results of equity investments, and are calculated after payment of preferred dividends. All references to per share amounts in the text of this press release are on a fully diluted basis.

For the year ended December 31, 2008, net income was $46.6 million, or $0.22 per share. Net income includes net after-tax realized and unrealized losses on investments of $453.6 million, or $8.15 per share. Operating earnings were $469.3 million, or $8.43 per share. Net income for the full year 2007 was $717.8 million, or $11.87 per share. This net income included net after-tax realized losses on investments of $56.3 million, or $0.98 per share. Operating earnings for the full year 2007 were $822.4 million, or $14.29 per share.

Commenting on the 2008 results, PartnerRe President & Chief Executive Officer Patrick Thiele said, "2008 was an extraordinary year on two fronts. The year was highlighted by the worst global financial crisis we have experienced in recent history and it was the third worst year in recorded history for natural catastrophes. Despite this, we delivered a 12% operating return on beginning equity for the year, maintained a strong balance sheet, and achieved a positive total return on our investment portfolio. More importantly, over a longer period, which we believe is a better measure of a company's success, we exceeded our long term targets, with a 15% average operating return on beginning equity and 11% compounded GAAP book value per share growth over the last six years.

"We believe the results we have delivered over the past several years, as well as our continued strong capital position during this most recent period, clearly demonstrate the value and effectiveness of our integrated risk management framework. They also underscore our commitment to PartnerRe's stakeholders: our clients in terms of providing secure capacity, and our shareholders in terms of continued value generation."

Summary unaudited consolidated financial data for the period is set out below.

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(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. Operating earnings is defined as net income available to common shareholders excluding after-tax net realized and unrealized gains/losses on investments and after-tax interest in earnings/losses of equity investments. Operating earnings per share is defined as operating earnings divided by the weighted average number of fully diluted shares outstanding for the period.

Net premiums written for the fourth quarter of 2008 were $752.4 million, compared to $714.4 million in the fourth quarter of 2007. Total revenues for the fourth quarter 2008 were $1.2 billion, compared to $1.1 billion in the fourth quarter of 2007, and included $984.3 million of net premiums earned, which were essentially flat with the fourth quarter of 2007; net investment income of $144.3 million - an increase of 5% over the fourth quarter of 2007; and pre-tax net realized and unrealized investment gains of $64.0 million as compared to pre-tax net realized investment losses of $16.5 million for the fourth quarter of 2007.

For the full year of 2008, net premiums written were $4.0 billion, up 6% over the full year 2007. Total revenues for the full year of 2008 were $4.0 billion, including $3.9 billion of net premiums earned, net investment income of $573.0 million, and pre-tax net realized and unrealized investment losses of $531.4 million. Total revenues for the same period in 2007 were $4.2 billion, including $3.8 billion of net premiums earned, net investment income of $523.3 million, and pre-tax net realized investment losses of $72.5 million.