PartnerRe Ltd. Reports Second Quarter and Half Year 2017 Results

July 27, 2017

  • Second Quarter Net Income of $191 million, resulting in an Annualized Net Income ROE of 12.6%
  • Second Quarter Operating Earnings of $97 million, driven by Non-life combined ratio of 87.7%, resulting in an Annualized Operating ROE of 6.4%
  • Book Value or common shareholder’s equity of $6.2 billion, a 3.0% increase compared to December 31, 2016

PEMBROKE, Bermuda, July 27, 2017 – PartnerRe Ltd. (“the Company”) today reported a net income available to common shareholder of $191 million for the second quarter of 2017 compared to $137 million for the same period in 2016. Net income available to common shareholder includes net realized and unrealized gains on investments of $129 million in the second quarter of 2017 compared to a $192 million gain in the same period of 2016. Operating earnings were $97 million for the second quarter of 2017 compared to operating losses of $66 million for the same period of 2016.

Net income available to common shareholder for the first six months of 2017 was $229 million compared to $338 million in the same period of 2016.  Net income available to common shareholder includes net realized and unrealized gains on investments of $152 million compared to $359 million in the same period of 2016. Operating earnings for the first six months of 2017 were $140 million compared to operating losses of $21 million for the same period of 2016.

Operating earnings is a non-GAAP financial measure which 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, and is calculated after dividends to preferred shareholders.

Operating earnings and net income available to common shareholder, and the associated annualized ROEs, for the second quarters and the first six months of 2017 and 2016 include various non-recurring transaction and severance related costs, which impact period over period comparability as follows (in US$ millions, except for percentages):

Non-GAAP measures adjusted for transaction and severance costs, net of tax(1): Q2 2017 Q2 2016 Half Year 2017 Half Year 2016
Operating earnings $ 103 $ (44) $ 154 $ 60
Annualized Operating ROE 6.8% (2.9)% 5.1% 2.0%
Net income available to common shareholder(2) $ 198 $ 158 $ 243 $ 420
Annualized net income available to common shareholder ROE 13.0% 10.4% 8.0% 13.7%

(1)The adjustments of $7 million and $13 million for the three and six months ended June 30, 2017, respectively, primarily represented transaction costs related to the Aurigen acquisition and reorganization related severance costs. The adjustment of $22 million for the three months ended June 30, 2016 represented reorganization related severance costs and costs related to certain executive changes. The adjustment of $82 million for the six months ended June 30, 2016 primarily represented transaction costs and accelerated stock-based compensation expense related to the closing of the acquisition by Exor as well as reorganization related severance costs.
(2) Net income available to common shareholder is calculated after preferred dividends.

Commenting on results, PartnerRe President and Chief Executive Officer Emmanuel Clarke said, “We delivered good results in the second quarter with an annualized adjusted Net Income ROE of 13.0% driven by strong Non-Life underwriting results and Investments contribution. The Non-life combined ratio of 87.7% was driven by a strong performance in our Specialty segment, with a technical ratio of 77.9%, highlighting the quality and diversification of our Specialty portfolio, but also by an improvement in our P&C non-CAT accident year technical ratio compared to the second quarter of 2016. Having successfully completed the acquisition of Aurigen in the quarter, we will now work on leveraging this platform to expand our footprint in North America, consistent with our strategy to increase our revenues and profitability in the broader Life and Health segment.”

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PartnerRe Ltd. is a leading global reinsurer that helps insurance companies reduce their earnings volatility, strengthen their capital and grow their businesses through reinsurance solutions. Risks are underwritten on a worldwide basis through the Company’s three segments: P&C, Specialty Lines and Life and Health. For the year ended December 31, 2015, total revenues were $5.4 billion. At September 30, 2016, total assets were $23.2 billion, total capital was $8.8 billion and total shareholders’ equity attributable to PartnerRe was $7.2 billion. PartnerRe enjoys strong financial strength ratings as follows: A.M. Best A / Moody’s A1 / Standard & Poor’s A+.

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