Bermuda-based PartnerRe Ltd., reported excellent first quarter results with net income of $124.6 million, or $2.23 per share on a fully diluted basis, compared to net income for the first quarter of 2002 of $63.3 million or $1.13 per share.
The company noted that the net income figures include a net after-tax realized gain on investments of $38.5 million or $0.72 per share for the first quarter of 2003, and a net after-tax realized loss on investments of $8.5 million in the same period in 2002.
Operating earnings, which exclude realized capital gains and losses and payments on preferred shares, for the first quarter 2003 were $81.2 million or $1.51 per share on a fully diluted basis, compared to operating earnings of $66.8 million, or $1.29 per share for the first quarter of 2002.
PartnerRe said its “Total revenues increased 72% in the quarter to $911.4 million, including $806.2 million of net premiums earned, net investment income of $61.7 million, and net realized investment gains of $41.0 million. For the first quarter of 2002, revenues were $531.0 million, with $479.5 million of net premiums earned, net investment income of $58.7 million, and net realized investment losses of $7.9 million.”
Other highlights included in the report were:
— Net premiums written rose to $1.2347 billion from $824 million;
— Net premiums earned rose to $806.23 million from $479.47 million;
— Non-life combined ratio increased slightly to 94.6% from 92.6;
— Annualized net income ROE was 26%;
— Annualized operating ROE was18% ;
— Book value per share grew to $35.54
PartnerRe President & CEO Patrick Thiele, commented, “We had an excellent first quarter, with strong growth in all segments and results in line with the ambitious targets we have set for ourselves. We achieved an annualized operating return on equity of 18% while maintaining a superior balance sheet.”
Thiele noted that the increase in premium was around 50 percent and indicated that this was the “first time we have exceeded the $1 billion level during a quarter.” He cited the company’s “superior ratings and strong market presence, good pricing across all our lines of business, a positive foreign exchange impact and the timing of renewals” as important factors contributing to its success in the first quarter.
“We continue to expect however that the growth rate for the year will be in the range of 25% to 30%,” he continued. “Our Non-Life segment performed well, with a combined ratio of 94.6%. We are also taking advantage of dislocations in the life market and, as a result, life premiums are up by more than 100% compared to last year. We continue to generate strong cash flow from our reinsurance operations, with cash flow from operations of $234 million this quarter, contributing to meaningful growth in invested assets.”
Thiele noted that PartnerRe has begun its tenth year in operation, and has become “one of the world’s leading reinsurers and is well positioned to take advantage of virtually all market opportunities.” He indicated that the company is “benefiting from the increasing flight to quality,” and that “our growing franchise, strong ratings, products and coverages are in increased demand across the globe.
“We remain confident that we will achieve our previously communicated plan for 2003 of at least $3.3 billion in premiums written, an operating return on equity of at least 17%, and minimum operating earnings per share of $5.70, barring any large catastrophes or unusual loss events,” Thiele concluded.
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