PartnerRe Ltd. Reports Third Quarter and Nine Month 2016 Results

October 26, 2016

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  • Third Quarter Net Income of $240.3 million, resulting in an Annualized Net Income ROE of 15.4%
  • Third Quarter Operating Earnings of $185.0 million, driven by Non-life combined ratio of 82.7%, resulting in an Annualized Operating ROE of 11.9%
  • Book Value of common shareholders’ equity of $6.3 billion, a 2.1% increase compared to Q2 2016

PEMBROKE, Bermuda, October 26, 2016 - PartnerRe Ltd. ("the Company") today reported a net income of $240.3 million for the third quarter of 2016. This includes net after-tax realized and unrealized gains on investments of $56.4 million. The net loss for the third quarter of 2015 was $243.3 million, including net after-tax realized and unrealized losses on investments of $121.8 million and the amalgamation termination fee and reimbursement of expenses paid to AXIS Capital of $315.0 million. The Company reported operating earnings of $185.0 million for the third quarter of 2016, which compares to operating earnings of $211.6 million for the third quarter of 2015.

Net income for the first nine months of 2016 was $578.5 million. This includes net after-tax realized and unrealized gains on investments of $366.6 million. The net loss for the first nine months of 2015 was $114.7 million, including net after-tax realized and unrealized losses on investments of $238.7 million and the amalgamation termination fee and reimbursement of expenses paid to Axis Capital of $315.0 million. Operating earnings for the first nine months of 2016 were $163.6 million, which compares to operating earnings of $474.6 million for the first nine months of 2015.

Operating earnings or loss is a non-GAAP metric 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 the amalgamation termination fee and reimbursement of expenses paid to Axis Capital, and is calculated after the payment of preferred dividends.

Net income and operating earnings and the associated annualized ROE’s for the third quarters and the first nine months of 2016 and 2015 include various transaction related costs and severance costs which impact period over period comparability as follows:

In US$ millions, except for percentages Q3 2016 Q3 2015 Year to date 2016 Year to date 2015
Operating earnings adjusted for transaction(1) and severance costs, net of tax 197 219 257 547
Annualized Operating ROE adjusted for transaction(1) and severance costs, net of tax 12.6% 14.4% 5.5% 12.0%
Net income adjusted for transaction(1) and severance costs, net of tax 252 79 672 272
Annualized Net income ROE adjusted for transaction(1) and severance costs, net of tax 16.2% 5.2% 14.5% 6.0%

(1)Transaction costs include costs incurred related to the EXOR acquisition, the terminated amalgamation with Axis Capital and the negotiated earn-out consideration paid to the former shareholders of Presidio Reinsurance Group, Inc.

The Company’s results for the third quarter of 2016 include $13 million, pre-tax, related to severance costs associated with the reorganization of the Company’s investment operations and certain executive changes.

Commenting on results, PartnerRe President and Chief Executive Officer Emmanuel Clarke said, “We delivered strong results in the third quarter, with Operating ROE and Net Income ROE of 11.9% and 15.4%, respectively. The Non-life combined ratio of 82.7% highlights our underwriting discipline in a challenging environment, while continued strong favorable prior year development of $173 million reflects the quality and solidity of our balance sheet.”

Mr. Clarke added, “The third quarter was also a very active quarter on the corporate side, with the implementation of our new organization, the strengthening of our leadership team with the appointment of James Beedle as our new Head of Asia Pacific, the launch of our €750 million Eurobond to refinance a portion of our liabilities, and the activities that led to the acquisition of Aurigen, which we announced last week. These are important achievements that will position us very well for the longer term.”

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