Bermuda-based PartnerRe Ltd. reported a net income of $295.7 million, or $5.61 per share for the first quarter of 2014. This includes net after-tax realized and unrealized gains on investments of $115.8 million, or $2.20 per share. Net income for the first quarter of 2013 was $210.5 million, or $3.53 per share, including net after-tax realized and unrealized gains on investments of $12.3 million, or $0.20 per share.
The Company also reported operating earnings, which excludes capital gains/losses and certain other items, of $176.9 million, or $3.36 per share, for the first quarter of 2014, compared to $202.1 million, or $3.39 per share, for the first quarter of 2013.
PartnerRe listed the following highlights for the first quarter of 2014 compared to the same period in 2013:
— Net premiums written of $1.7 billion were up 6 percent. The increase was driven by the North America and Global Specialty Non-life sub-segments, and the Life and Health segment. The increase was primarily driven by the agriculture and credit/surety lines of business in the North America Non-life sub-segment, the multi-line and agriculture lines of business in the Global Specialty Non-life sub-segment and PartnerRe Health’s accident and health line of business in the Life and Health segment. These increases were partially offset by decreases in the Catastrophe and Global (Non-U.S.) P&C Non-life sub-segments.
— Net premiums earned of $1.3 billion were up 9 percent, or 10 percent on a constant foreign exchange basis. The increase was primarily driven by the earning of new business written in 2013 in the North America, Global (Non-U.S.) P&C and Global Specialty Non-life sub-segments and the Life and Health segment.
— The Non-life combined ratio was 83.9 percent. The combined ratio benefited from favorable prior year development of 16.6 points (or $164 million). All Non-life sub-segments experienced net favorable development on prior accident years during the first quarter of 2014.
— Net investment income of $117 million was down 6 percent. The decrease in net investment income primarily reflects lower reinvestment rates.
— Pre-tax net realized and unrealized investment gains were $142 million primarily reflecting decreases in longer-term risk-free interest rates and narrowing credit spreads.
— The effective tax rate on operating earnings and non-operating earnings was 14 percent and 20 percent, respectively.
President & CEO Costas Miranthis commented: “I am pleased to report a strong start to 2014, with first quarter results reflecting solid underwriting performance and improved financial markets. On a dividend adjusted basis, we grew tangible book value per share by 5.4 percent.
“We are beginning to see the effect of our efforts to profitably diversify our portfolio into new lines such as health and mortgage business. I am confident that our ability to find new, attractive businesses coupled with our excellent franchise, strong client relationships and superior balance sheet position us to compete effectively in an otherwise challenging operating environment.”
The earnings report also listed the following balance sheet and capitalization figures:
— Total investments, cash and funds held – directly managed were $17.5 billion at March 31, 2014, comparable to December 31, 2013.
— Net Non-life loss and loss expense reserves were $10.3 billion at March 31, 2014, down 1 percent compared to December 31, 2013.
— Net policy benefits for life and annuity contracts were $2.1 billion at March 31, 2014, up 7 percent compared to December 31, 2013.
— Total capital was $7.6 billion at March 31, 2014, up 1 percent compared to December 31, 2013 primarily driven by net income for the quarter, which was partially offset by share repurchases and common and preferred dividend payments.
The Company also repurchased approximately 1.8 million common shares at a total cost of approximately $180 million during the first quarter of 2014. The average repurchase price of $99.76 per share represents an 8.7 percent discount to diluted book value per share at December 31, 2013. Since April 1, 2014, the Company has repurchased 450 thousand common shares at a total cost of approximately $46 million. As of April 28, 2014, approximately 2.7 million common shares remained under the current repurchase authorization.
Total shareholders’ equity attributable to PartnerRe was $6.8 billion at March 31, 2014, up 1 percent compared to December 31, 2013. The increase was driven by the factors described above for total capital.
Book value per common share was $114.13 at March 31, 2014, a record high for PartnerRe, up 4.5 percent compared to $109.26 at December 31, 2013. Tangible book value per common share was $103.10 at March 31, 2014, up 4.7 percent compared to $98.49 at December 31, 2013. The increases were primarily driven by net income, which was partially offset by common and preferred dividend payments.