PartnerRe Ltd. Reports First Quarter 2015 Results

<p>By a <org>News Reporter-Staff News</org> Editor at <org>Investment Weekly News</org> -- <org value="NYSE:PRE" idsrc="xmltag.org">PartnerRe Ltd.</org> (NYSE:PRE) reported net income of <money>$231.7 million</money>, or <money>$4.76</money> per share for the first quarter of 2015. This includes net after-tax realized and unrealized gains on investments of <money>$100.3 million</money>, or <money>$2.06</money> per share. Net income for the first quarter of 2014 was <money>$295.7 million</money>, or <money>$5.61</money> per share, including net after-tax realized and unrealized gains on investments of <money>$115.8 million</money>, or <money>$2.20</money> per share. The Company reported operating earnings of <money>$150.5 million</money>, or <money>$3.09</money> per share, for the first quarter of 2015. This compares to operating earnings of <money>$176.9 million</money>, or <money>$3.36</money> per share, for the first quarter of 2014.</p><p>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 method investments, the loss on redemption of preferred shares and certain net after-tax withholding tax on inter-company dividends (included in other expenses), 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.</p><p>Commenting on results, <org value="NYSE:PRE" idsrc="xmltag.org">PartnerRe</org> Interim Chief Executive Officer <person>David Zwiener</person> said, "We had a solid start to 2015. Despite continued pressure across all reinsurance lines, our operating performance in the first quarter was characterized by very good underlying technical results and included an absence of major catastrophes and continued favorable reserve development, resulting in a 9.8% operating ROE. This, combined with strong results in our investment portfolio, generated tangible book value per share growth of 3.2%. These results clearly demonstrate our excellent execution capabilities and the strength of the <org value="NYSE:PRE" idsrc="xmltag.org">PartnerRe</org> franchise."</p><p>Highlights for the first quarter of 2015 compared to the same period in 2014 include: Results of operations: Net premiums written of <money>$1.7 billion</money> were down 5%. On a constant foreign exchange basis, net premiums written were up 1% driven by the Life and Health segment and modest increases in the Catastrophe and Global (Non-U.S.) P&C Non-life sub-segments. These increases were almost entirely offset by a decrease in the North America Non-life sub-segment.</p><p>Net premiums earned of <money>$1.2 billion</money> were down 2%. On a constant foreign exchange basis, net premiums earned were up 3% primarily due to the Life and Health segment and the earning of business written in prior periods in the Global Specialty Non-life sub-segment. These increases were partially offset by a decrease in the North America Non-life sub-segment.</p><p>The Non-life combined ratio was 82.8%. The combined ratio benefited from favorable prior year development of 24.0 points (or <money>$224 million</money>). All Non-life sub-segments experienced net favorable development from prior accident years during the first quarter of 2015.</p><p>Other expenses of <money>$125 million</money> includes pre-tax costs of <money>$31 million</money> related to the amalgamation with Axis, or <money>$0.63</money> per diluted share, pre-tax.</p><p>Net investment income of <money>$105 million</money> was down 10%, or 8% on a constant foreign exchange basis, primarily driven by lower reinvestment rates.</p><p>Pre-tax net realized and unrealized investment gains were <money>$116 million</money>, primarily reflecting decreases in U.S. and Euro risk-free rates.</p><p>The effective tax rate on operating earnings and non-operating earnings was 17.2% and 35.6%, respectively. Balance sheet and capitalization: Total investments, cash and funds held - directly managed were <money>$17.0 billion</money> at <chron>March 31, 2015</chron>, down 1% compared to <chron>December 31, 2014</chron>, primarily reflecting the impacts of foreign exchange.</p><p>Net Non-life loss and loss expense reserves were <money>$9.2 billion</money> at <chron>March 31, 2015</chron>, down 3% compared to <chron>December 31, 2014</chron>, primarily reflecting the impacts of foreign exchange.</p><p>Net policy benefits for life and annuity contracts were <money>$2.0 billion</money> at <chron>March 31, 2015</chron>, down 3% compared to <chron>December 31, 2014</chron>, primarily reflecting the impacts of foreign exchange.</p><p>Total capital was <money>$8.0 billion</money> at <chron>March 31, 2015</chron>, up 2% compared to <chron>December 31, 2014</chron>, primarily driven by comprehensive income for the quarter, which was partially offset by share repurchases and common and preferred dividend payments.</p><p>The Company repurchased approximately 0.5 million common shares at a total cost of approximately <money>$59 million</money> during the quarter. The average repurchase price of <money>$112.89</money> per share represents a 11% discount to the diluted book value per share at <chron>December 31, 2014</chron>. As of <chron>April 27, 2015</chron>, approximately 2.9 million common shares remained under the current repurchase authorization.</p><p>Total shareholders' equity attributable to <org value="NYSE:PRE" idsrc="xmltag.org">PartnerRe</org> was <money>$7.2 billion</money> at <chron>March 31, 2015</chron>, up 2% compared to <chron>December 31, 2014</chron>. The increase was driven by the same factors described above for total capital.</p><p>Book value per common share was <money>$129.86</money> at <chron>March 31, 2015</chron>, a record high for <org value="NYSE:PRE" idsrc="xmltag.org">PartnerRe</org>, up 2.9% compared to <money>$126.21</money> at <chron>December 31, 2014</chron>. Tangible book value per common share was <money>$118.40</money> at <chron>March 31, 2015</chron>, a record high for <org value="NYSE:PRE" idsrc="xmltag.org">PartnerRe</org>, up 3.2% compared to <money>$114.76</money> at <chron>December 31, 2014</chron>. The increases were primarily driven by net income, which was partially offset by common and preferred dividend payments.</p><p>Segment and sub-segment highlights for the first quarter of 2015 compared to the same period in 2014 include: Non-life: The Non-life segment's net premiums written were down 8%, or 3% on a constant foreign exchange basis. The decrease was reported in the <location value="LB/nam" idsrc="xmltag.org">North America</location> sub-segment and was partially offset by modest increases in the Catastrophe and Global (Non-U.S. P&C) sub-segments.</p><p>The <location value="LB/nam" idsrc="xmltag.org">North America</location> sub-segment's net premiums written were down 11%, or 10% on a constant foreign exchange basis. The decrease was primarily driven by cancellations, non-renewals and participation decreases across various lines of business and lower premiums bound in the agriculture line of business due to the delayed renewal of some significant contracts that remain in process. These decreases were partially offset by new business written in prior periods and at the <chron>January 1, 2015</chron> renewal in the property and casualty lines of business. This sub-segment reported a technical ratio of 78.2%, which included 24.3 points (or <money>$82 million</money>) of net favorable prior year loss development.</p><p>The Global (Non-U.S.) P&C sub-segment's net premiums written were down 8%. On a constant foreign exchange basis, net premiums written were up 1% primarily due to new business and increased participations in the property and motor lines of business. These increases were partially offset by the cancellation of a large motor contract. This sub-segment reported a technical ratio of 98.5%, which included 10.4 points (or <money>$18 million</money>) of net favorable prior year loss development.</p><p>The Global Specialty sub-segment's net premiums written were down 7%. On a constant foreign exchange basis, net premiums written were flat which reflects new business in the agriculture and multi-line lines of business and lower ceded premiums under the Company's retrocessional program as a result of optimizing our coverage and lower retrocessional pricing. These increases were partially offset by decreases in the marine, credit/surety and specialty casualty lines of business primarily due to cancellations, downward premium adjustments and reduced participations. This sub-segment reported a technical ratio of 72.1%, which included 30.0 points (or <money>$110 million</money>) of net favorable prior year loss development.</p><p>The Catastrophe sub-segment's net premiums written were down 2%. On a constant foreign exchange basis, net premiums written were up 5% primarily due to lower ceded premiums under the Company's retrocessional program, the extension of a significant treaty for one quarter, and new business. These increases were partially offset by cancellations, non-renewals and share decreases. This sub-segment reported a technical ratio of 40.7%, which included 24.3 points (or <money>$14 million</money>) of net favorable prior year loss development. Life and Health: The Life and Health segment's net premiums written were up 11%, or 19% on a constant foreign exchange basis. The increase was primarily driven by <org>PartnerRe Health's</org> accident and health line of business and, to a lesser extent, new business in the mortality and longevity lines of business.</p><p>The Life and Health segment's allocated underwriting result, which includes allocated investment income and operating expenses, increased to <money>$25 million</money> compared to <money>$14 million</money> in the same period of 2014. This increase was primarily due to a higher level of favorable prior year loss development from the mortality and <org>PartnerRe Health</org> accident and health lines of business. Corporate and Other: Investment activities contributed income of <money>$206 million</money> to pre-tax net income, excluding investment income allocated to the Life and Health segment. Of this amount, income of <money>$93 million</money> was included in pre-tax operating earnings and income of <money>$113 million</money> related to net realized and unrealized gains on investments and losses from equity method investee companies was included in pre-tax non-operating gains.</p><p>Separately, as announced by the Company earlier today, the Board of Directors declared a quarterly dividend of <money>$0.70</money> per common share. The dividend will be payable on <chron>June 1, 2015</chron> to common shareholders of record on <chron>May 8, 2015</chron>.</p><p>The Company has posted its first quarter 2015 financial supplement on its website <a href="http://www.partnerre.com">www.partnerre.com</a> in the Financial Information section of the Investor Relations page under Supplementary Financial Data, which includes a reconciliation of GAAP and non-GAAP measures.</p><p>Keywords for this news article include: Agriculture, <org value="NYSE:PRE" idsrc="xmltag.org">PartnerRe Ltd</org>, Finance and Investment, Investment and Finance.</p><p>Our reports deliver fact-based news of research and discoveries from around the world. Copyright 2015, NewsRx LLC</p>