PartnerRe Ltd. today reported net income of $474.3 million, or $8.10 per share on a fully diluted basis for the second quarter of 2009. This net income includes net after-tax realized and unrealized gains on investments of $279.6 million, or $4.86 per share. Net loss for the second quarter of 2008 was $26.0 million, or $0.64 per share, including net after-tax realized and unrealized losses on investments of $219.1 million, or $4.04 per share. Operating earnings for the second quarter of 2009 were $179.3 million, or $3.12 per share on a fully diluted basis. This compares to operating earnings of $183.8 million, or $3.39 per share, for the second quarter of 2008.
Net income for the first six months of 2009 was $615.8 million, or $10.43 per share. This net income includes net after-tax realized and unrealized gains on investments of $205.1 million, or $3.57 per share, as well as a net after tax gain of $57.0 million or $0.99 per share, from the purchase of approximately 75% of the Company’s outstanding Capital Efficient Notes (CENts) in the first quarter of 2009. Net income for the first six months of 2008 was $103.0 million, or $1.54 per share, including net after-tax realized and unrealized losses on investments of $210.1 million, or $3.77 per share. Operating earnings for the first six months of 2009 were $335.0 million, or $5.84 per share on a fully diluted basis. This compares to operating earnings of $294.0 million, or $5.28 per share, for the first six months of 2008.
Operating earnings exclude net after-tax realized and unrealized investment gains and losses, net after-tax realized gain on the purchase of the CENts 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.
Commenting on the second quarter and half year 2009 results, PartnerRe President & Chief Executive Officer Patrick Thiele said, “PartnerRe had an excellent second quarter and first half of 2009, with both its reinsurance and capital markets activities performing well. For the first six months of 2009, we achieved an operating return on beginning equity of 18%, and a 15% growth in GAAP book value per share. Our reinsurance results benefited from a low level of large losses while our investment operations participated fully in the improvement shown by the global capital markets.”
Results by Segment
The Non-life segment reported net premiums written of $724 million for the second quarter of 2009, compared to $814 million in the same period in 2008. The combined ratio was 83.5% for the second quarter of 2009 compared to 85.9% for the same period in 2008. The Non-life technical result was $171 million for the second quarter of 2009 compared to $176 million for the prior year period. For the first six months, Non-life net premiums written were $1.9 billion, compared to $2.0 billion for same period of 2008. The six month technical result was $319 million, compared to $292 million for the same period in 2008. The combined ratio for the six month period was 85.3% compared to 89.0% in 2008.
The U.S. business, which represented 29% of total net premiums written for the quarter, reported net premiums written of $249 million for the second quarter of 2009, compared to $246 million in last year’s second quarter. Net premiums earned were $258 million in the second quarter of 2009, compared to $285 million for the same period in 2008. The technical ratio for this sub-segment was 87.9% for the 2009 second quarter, compared to 102.3% in the second quarter of 2008. The technical result for the second quarter of 2009 was a gain of $31 million, compared to a loss of $6 million for the same period in 2008. For the first six months of 2009, net premiums written were $561 million, compared to $578 million in the first six months of 2008. The six-month technical ratio was 90.4%, compared to 95.9% in 2008. The technical result for the half-year was $48 million compared to $22 million in 2008.
The Global (Non-U.S.) P&C business, which represented 14% of total net premiums written for the quarter, reported net premiums written of $118 million for the second quarter of 2009, compared to $132 million for the same period in 2008. Net premiums earned during the quarter were $161 million, compared to $186 million in the second quarter of 2008. The technical ratio for this sub-segment was 75.2% for the second quarter of 2009 compared to 72.3% for the same period in 2008. The technical result for the second quarter of 2009 was $40 million, compared to $51 million for the same period in 2008. For the six months, net premiums written were $417 million, compared to $505 million for the first half of 2008. The six-month technical ratio was 74.5%, compared to 86.3% in 2008. The technical result for the half-year was $81 million compared to $53 million in 2008.
The Global (Non-U.S.) Specialty business, which represented 28% of total net premiums written for the quarter, reported net premiums written of $232 million for the second quarter of 2009, compared to $291 million for the second quarter of 2008. Net premiums earned were $232 million for the quarter, compared to $272 million in the same period in 2008. This sub-segment’s technical ratio was 87.0% for the second quarter of 2009 compared to 80.5% for the second quarter of 2008. The technical result for the second quarter of 2009 was $30 million, compared to $53 million for the same period in 2008. For the six-month period, net premiums written were $563 million, compared to $624 million in the first half of 2008. The six-month technical ratio was 87.5%, compared to 85.8% in 2008. The technical result for the half-year was $60 million in 2009 compared to $70 million in 2008.
The Catastrophe business, which represented 15% of total net premiums written for the quarter, reported net premiums written of $125 million for the second quarter of 2009, compared to $145 million for the prior year period. Net premiums earned were $52 million for the quarter, compared to $65 million in the same period in 2008. This sub-segment’s technical ratio was (35.1)% for the quarter compared to (20.5)% for the second quarter of 2008. The technical result for the second quarter 2009 was $70 million, compared to $78 million for the same period in 2008. For the six-month period, net premiums written were $330 million, compared to $343 million for the prior year period. The six-month technical ratio was 0.3%, compared to (3.3)% in 2008. The technical result for the half-year was $130 million in 2009 compared to $147 million in 2008.
The Life segment, which represented 14% of total net premiums written for the second quarter of 2009, reported net premiums written of $116 million for the quarter, compared to $136 million in the second quarter of 2008. The allocated underwriting result for the quarter was $15 million, compared to $7 million in the same period of 2008. For the six-month period, net premiums written were $277 million, with an allocated underwriting result of $20 million, compared with net premiums written of $307 million and an allocated underwriting result of $11 million in the first half of 2008.
The Company’s capital markets and investment activities are reported under the heading of “Corporate and Other”. Within Corporate and Other, capital markets and investment activities contributed $123 million to pre-tax operating income in the second quarter and $241 million to pre-tax operating income in the first six months of the year (exclusive of Life investment income), as compared to $128 million and $248 million in 2008, respectively. Separately, following the adoption of FAS 159, with changes in the unrealized market values of invested assets recorded in net income, capital markets and investment activities contributed pre-tax non-operating gains of $313 million and $236 million in the second quarter and first half of 2009, respectively, compared to pre-tax non-operating losses of $298 million and $272 million, respectively, in the second quarter and first half of 2008.
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