[November 16, 2017] |
|
PartnerRe Ltd. Reports Third Quarter and Nine Month 2017 Results
PartnerRe Ltd. ("the Company") today reported a net loss available to
common shareholder of $84 million for the third quarter of 2017 compared
to net income of $240 million for the same period of 2016. Net income or
loss available to common shareholder includes net realized and
unrealized investment gains of $61 million in the third quarter of 2017
compared to $56 million in the same period of 2016. Operating losses
were $113 million for the third quarter of 2017 compared to operating
gains of $185 million for the same period of 2016.
Net income available to common shareholder for the first nine months of
2017 was $145 million compared to $578 million in the same period of
2016. Net income available to common shareholder includes net realized
and unrealized investment gains of $214 million compared to $415 million
in the same period of 2016. Operating earnings for the first nine months
of 2017 were $27 million compared to $164 million for the same period of
2016.
Operating earnings is a non-GAAP financial measure which excludes
certain net after-tax realized and unrealized investment gains and
losses, net after-tax foreign exchange gains and losses and certain net
after-tax interest in results of equity method investments, and is
calculated after dividends to preferred shareholders.
Operating (losses) earnings and net (loss) income available to common
shareholder, and the associated annualized ROEs, for the third quarters
and the first nine months of 2017 and 2016 include various non-recurring
transaction and reorganization related costs, which impact period over
period comparability as follows (in US$ millions, except for
percentages):
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|
|
|
|
|
|
|
|
|
Non-GAAP measures adjusted for transaction and
reorganization related costs, net of tax(1):
|
|
|
Q3 2017
|
|
Q3 2016
|
|
YTD 2017
|
|
YTD 2016
|
Operating (losses) earnings
|
|
|
$
|
(107
|
)
|
|
$
|
197
|
|
|
$
|
46
|
|
|
$
|
257
|
|
Annualized Operating ROE
|
|
|
(7.0
|
)%
|
|
12.6
|
%
|
|
1.0
|
%
|
|
5.5
|
%
|
Net (loss) income available to common shareholder(2)
|
|
|
$
|
(78
|
)
|
|
$
|
252
|
|
|
$
|
164
|
|
|
$
|
672
|
|
Annualized net (loss) income available to common shareholder ROE
|
|
|
(5.1
|
)%
|
|
16.2
|
%
|
|
3.6
|
%
|
|
14.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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______________
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(1)
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|
The adjustment of $6 million, after-tax, for the three months
ended September 30, 2017 primarily represented reorganization
related costs. The adjustment of $19 million, after-tax, for the
nine months ended September 30, 2017, primarily represented
reorganization related costs and transaction costs related to the
Aurigen acquisition. The adjustment of $12 million, after-tax, for
the three months ended September 30, 2016 represented
reorganization related severance costs and costs related to
certain executive changes. The adjustment of $93 million,
after-tax, for the nine months ended September 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.
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(2)
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|
Net (loss) income available to common shareholder is calculated
after preferred dividends.
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|
Commenting on results, PartnerRe President and Chief Executive Officer
Emmanuel Clarke said, "The third quarter of 2017 was a very active
period of severe catastrophe events, with a series of hurricanes
impacting the Caribbean and the U.S. and two earthquakes in Mexico. Our
first thoughts go to the victims of these catastrophes. PartnerRe is
paying losses promptly and continue to provide coverage to our clients,
demonstrating the value of our reinsurance product, which ultimately
contributes to fund reconstruction efforts in devastated regions."
Mr. Clarke also added: "Despite the impact of these losses on the
catastrophe exposed lines in our portfolio, PartnerRe book value
declined by only 0.9% during the quarter, thanks to discipline in
deploying capital in Catastrophe exposed classes, solid performance in
our Specialty portfolio, an improvement in our P&C non-CAT accident year
technical ratio compared to the third quarter of 2016 and good
investments performance. These results highlight our underwriting
discipline and the quality and diversification of our underwriting
portfolio. We are approaching the January 1 renewals season with a
strong capital position which will allow us to benefit from improving
pricing conditions in the market."
Highlights for the third quarter of 2017 compared to the same period of
2016 include the following:
Non-Life:
-
Non-life net premiums written were up 7% compared to the same period
of 2016, primarily as a result of new business written and
reinstatement premiums, partially offset by cancellations and
non-renewals. Excluding reinstatement premiums, net premiums written
increased by 2%.
-
The Non-life combined ratio of 109.8% was driven by large catastrophic
losses related to the hurricanes Harvey, Irma and Maria of $472
million, pre-tax, net of retrocession and reinstatement premiums, or
44.7 points on the combined ratio. The Non-life combined ratio in the
third quarter of 2016 was 82.7% and did not include any large
catastrophic losses. Excluding large catastrophic losses, the Non-life
combined ratio in the third quarter of 2017 was 17.6 percentage points
lower than the combined ratio in the third quarter of 2016, with the
improvement mainly driven by an improved current accident year
technical ratio, higher contributions from net prior years' reserve
development and a lower expense ratio.
-
The Non-life combined ratio continued to benefit from net favorable
prior years' reserve development of $187 million (17.7 points), with
both the P&C and Specialty segments experiencing net favorable
development from prior accident years. The combined ratio for the
third quarter of 2016 included favorable prior year development of
$173 million (16.7 points).
Life and Health:
-
Net premiums written were up 22% in the third quarter of 2017 compared
to the same period of 2016, primarily driven by the inclusion of the
Aurigen life premiums and growth in health business.
-
Allocated underwriting result, which includes allocated investment
income and other expenses, was a loss of $10 million in the third
quarter of 2017 compared to a gain of $11 million in the same period
of 2016. This decrease primarily reflects lower profitability in the
health line of business.
Investments:
-
Total net investment return in the third quarter of 2017 of $168
million, or 1.0% in percentage terms, includes net realized and
unrealized investment gains of $61 million, net investment income of
$98 million and interest in earnings of equity method investments
of $9 million. This compares to a total net investment return of $161
million, or 0.9%, for the third quarter of 2016.
-
The total net investment return in the third quarter of 2017 was
primarily generated by net investment income from fixed income
securities and mark-to-market gains in public equity and third party
private equity funds. A further compression of U.S. investment grade
corporate and mortgage-backed securities spreads also contributed to a
positive mark-to-market result, partially offset by an increase in
risk-free rates in Canada.
-
Net investment income of $98 million was down $4 million, or 4%,
compared to the third quarter of 2016, mainly due to the derisking of
the investment portfolio in the fourth quarter of 2016.
-
Reinvestment rates are currently 2.7%, in line with our existing fixed
income yield of 2.5%.
Other Income Statement Items:
-
Other expenses of $90 million in the third quarter of 2017 were
comparable to $91 million for the same period of 2016 and included $9
million of Aurigen expenses.
-
Interest expense of $11 million in the third quarter of 2017 was
comparable to $12 million for the third quarter of 2016 due to the
reduction from the redemption of $250 million of senior notes in the
fourth quarter of 2016 being partially offset by the issuance of the
€750 million senior debt (Euro debt) at a lower interest rate.
-
The preferred dividends of $12 million in the third quarter of 2017
were down $3 million compared to the third quarter of 2016 as a result
of the redemption of $150 million of Series D and E preferred shares
during the fourth quarter of 2016.
-
Net foreign exchange losses in the third quarter of 2017 were $41
million, mainly driven by the strengthening of certain currencies
against the U.S. dollar and cost of hedging foreign exchange
currencies.
-
Income tax expense of $10 million on a pre-tax loss of $62 million in
the third quarter of 2017 (compared to $29 million on a pre-tax income
of $283 million for the same period of 2016) was primarily driven by
the geographical distribution of pre-tax profits and losses, with a
significant portion of the large catastrophic losses recorded in
jurisdictions with low or nil tax rates and profits recorded in tax
jurisdictions with higher income tax rates.
Balance Sheet and Capitalization:
-
Total investments, cash and cash equivalents and funds held-directly
managed were $17.1 billion at September 30, 2017, up 1.4% compared to
December 31, 2016.
-
Cash and cash equivalents and fixed maturities, which are government
issued or investment grade fixed income securities, were $14.4 billion
at September 30, 2017, representing 87% of the cash and cash
equivalents and total investments.
-
The average rating and the average duration of the fixed income
portfolio at September 30, 2017 was A and 4.8 years, respectively,
while the average duration of the Company's liabilities was 4.5 years.
-
There were no dividends declared on common shares during the third
quarter of 2017. Dividends declared to common shareholder for the
first nine months of 2017 were $25 million.
-
Total capital was $8.2 billion at September 30, 2017, up 2.7% compared
to $8.0 billion at December 31, 2016, primarily due to net income of
$180 million for the first nine months of 2017.
-
Common shareholder's equity (or book value) and tangible book value
were $6.1 billion and $5.5 billion, respectively, at September 30,
2017, up 2.0% and 1.1%, respectively, compared to December 31, 2016,
primarily due to net income for the first nine months of 2017.
Cash Flows:
-
Cash provided by operating activities was $113 million in the third
quarter of 2017 compared to $197 million in the third quarter of 2016.
The positive cash flow was primarily driven by investment income.
-
Cash used in investing activities was $77 million in the third quarter
of 2017 compared to $811 million in the same period in 2016. The cash
used in the third quarter of 2017 was primarily due to net purchases
of fixed maturity securities. The cash used in investing activities in
the third quarter of 2016 reflects proceeds from issuance of Euro debt
that were invested in short-term fixed maturities in advance of these
funds being used to redeem preferred shares and senior notes in the
fourth quarter of 2016.
-
Cash used in financing activities was $12 million in the third quarter
of 2017 compared to cash provided by financing activities of $723
million in the same period in 2016. The cash outflows in the third
quarter of 2017 were driven by the dividends paid to preferred
shareholders. The cash inflows in the third quarter of 2016 were due
to cash proceeds on issuance of the Euro debt.
_______________________________________
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, and Life and Health. For the year ended December 31,
2016, total revenues were $5.4 billion. At September 30, 2017, total
assets were $23.6 billion, total capital was $8.2 billion and total
shareholders' equity was $6.8 billion. PartnerRe enjoys strong financial
strength ratings as follows: A.M. Best A / Moody's A1 / Standard &
Poor's A+.
PartnerRe on the Internet: www.partnerre.com
Forward-looking statements contained in this press release are based
on the Company's assumptions and expectations concerning future events
and financial performance and are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. Such
statements are subject to significant business, economic and competitive
risks and uncertainties that could cause actual results to differ
materially from those reflected in the forward-looking statements.
PartnerRe's forward-looking statements could be affected by numerous
foreseeable and unforeseeable events and developments such as exposure
to catastrophe, or other large property and casualty losses, credit,
interest, currency and other risks associated with the Company's
investment portfolio, adequacy of reserves, levels and pricing of new
and renewal business achieved, changes in accounting policies, risks
associated with implementing business strategies, and other factors
identified in the Company's reports filed or furnished with the
Securities and Exchange Commission. In light of the significant
uncertainties inherent in the forward-looking information contained
herein, readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the dates on which
they are made. The Company disclaims any obligation to publicly update
or revise any forward-looking information or statements.
The Company's estimate of losses for hurricanes Harvey, Irma and
Maria is based on a preliminary analysis of the Company's exposures, the
current assumption of total insured industry losses and preliminary
information received from certain cedants to date. There
is material uncertainty associated with the Company's loss estimates
given the nature, magnitude and recency of these loss events and the
limited claims information received to date. The ultimate loss therefore
may differ materially from the current preliminary estimate.
|
PartnerRe Ltd. Consolidated Statements of
Operations and Comprehensive (Loss) Income (1) (Expressed
in thousands of U.S. dollars) (Unaudited)
|
|
|
|
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For the three months ended
|
|
For the nine months ended
|
|
|
|
September 30, 2017
|
|
September 30, 2016
|
|
September 30, 2017
|
|
September 30, 2016
|
Revenues
|
|
|
|
|
|
|
|
|
|
Gross premiums written
|
|
|
$
|
1,389,951
|
|
|
$
|
1,244,311
|
|
|
$
|
4,352,308
|
|
|
$
|
4,254,247
|
|
Net premiums written
|
|
|
$
|
1,249,818
|
|
|
$
|
1,131,260
|
|
|
$
|
3,899,699
|
|
|
$
|
3,886,375
|
|
Decrease (increase) in unearned premiums
|
|
|
145,052
|
|
|
178,319
|
|
|
(235,126
|
)
|
|
(180,833
|
)
|
Net premiums earned
|
|
|
1,394,870
|
|
|
1,309,579
|
|
|
3,664,573
|
|
|
3,705,542
|
|
Net investment income
|
|
|
97,594
|
|
|
101,773
|
|
|
298,975
|
|
|
305,943
|
|
Net realized and unrealized investment gains
|
|
|
61,248
|
|
|
55,548
|
|
|
213,506
|
|
|
414,682
|
|
Other income
|
|
|
3,593
|
|
|
3,266
|
|
|
11,029
|
|
|
11,572
|
|
Total revenues
|
|
|
1,557,305
|
|
|
1,470,166
|
|
|
4,188,083
|
|
|
4,437,739
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Losses and loss expenses
|
|
|
1,183,109
|
|
|
772,960
|
|
|
2,756,674
|
|
|
2,470,083
|
|
Acquisition costs
|
|
|
297,466
|
|
|
298,653
|
|
|
809,766
|
|
|
865,161
|
|
Other expenses (2)
|
|
|
90,179
|
|
|
91,257
|
|
|
270,020
|
|
|
367,439
|
|
Interest expense
|
|
|
10,547
|
|
|
12,251
|
|
|
31,920
|
|
|
36,766
|
|
Amortization of intangible assets
|
|
|
6,286
|
|
|
6,588
|
|
|
18,312
|
|
|
19,764
|
|
Net foreign exchange losses (gains)
|
|
|
40,919
|
|
|
8,362
|
|
|
107,049
|
|
|
(29,378
|
)
|
Total expenses
|
|
|
1,628,506
|
|
|
1,190,071
|
|
|
3,993,741
|
|
|
3,729,835
|
|
(Loss) income before taxes and interest in earnings of equity
method investments
|
|
|
(71,201
|
)
|
|
280,095
|
|
|
194,342
|
|
|
707,904
|
|
Income tax expense
|
|
|
10,162
|
|
|
29,027
|
|
|
33,123
|
|
|
92,368
|
|
Interest in earnings of equity method investments
|
|
|
9,025
|
|
|
3,396
|
|
|
19,014
|
|
|
5,468
|
|
Net (loss) income
|
|
|
(72,338
|
)
|
|
254,464
|
|
|
180,233
|
|
|
621,004
|
|
Preferred dividends
|
|
|
11,604
|
|
|
14,184
|
|
|
34,812
|
|
|
42,551
|
|
Net (loss) income available to common shareholder
|
|
|
$
|
(83,942
|
)
|
|
$
|
240,280
|
|
|
$
|
145,421
|
|
|
$
|
578,453
|
|
Comprehensive (loss) income
|
|
|
$
|
(44,436
|
)
|
|
$
|
234,980
|
|
|
$
|
180,577
|
|
|
$
|
599,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
On March 18, 2016, Exor N.V. acquired 100% of the Company's
common shares. As such, per share data is no longer meaningful and
has been excluded. PartnerRe common shares are no longer traded on
the NYSE.
|
|
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(2)
|
|
Other expenses for the three months ended September 30, 2017
include $8 million of reorganization related costs. Other expenses
for the nine months ended September 30, 2017 include $24 million
of reorganization related costs and transaction costs related to
the Aurigen acquisition. Other expenses for the three months ended
September 30, 2016 include $13 million of reorganization related
severance costs and costs related to certain executive changes.
Other expenses for the nine months ended September 30, 2016
include $106 million of transaction costs and accelerated
stock-based compensation expense related to the closing of the
acquisition by Exor as well as reorganization related severance
costs.
|
|
|
|
|
PartnerRe Ltd. Consolidated Balance Sheets (Expressed
in thousands of U.S. dollars, except parenthetical share data) (Unaudited)
|
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
Assets
|
|
|
|
|
|
Investments:
|
|
|
|
|
|
Fixed maturities, at fair value
|
|
|
$
|
13,569,214
|
|
|
$
|
13,432,501
|
|
Short-term investments, at fair value
|
|
|
57,218
|
|
|
21,697
|
|
Equities, at fair value
|
|
|
609,878
|
|
|
38,626
|
|
Other invested assets
|
|
|
1,163,615
|
|
|
1,075,637
|
|
Total investments
|
|
|
15,399,925
|
|
|
14,568,461
|
|
Funds held - directly managed
|
|
|
527,733
|
|
|
511,324
|
|
Cash and cash equivalents
|
|
|
1,163,813
|
|
|
1,773,328
|
|
Accrued investment income
|
|
|
121,850
|
|
|
112,580
|
|
Reinsurance balances receivable
|
|
|
3,148,145
|
|
|
2,492,069
|
|
Reinsurance recoverable on paid and unpaid losses
|
|
|
884,690
|
|
|
331,704
|
|
Funds held by reinsured companies
|
|
|
789,758
|
|
|
685,069
|
|
Deferred acquisition costs
|
|
|
691,505
|
|
|
597,239
|
|
Deposit assets
|
|
|
83,536
|
|
|
74,273
|
|
Net tax assets
|
|
|
112,775
|
|
|
194,170
|
|
Goodwill
|
|
|
456,380
|
|
|
456,380
|
|
Intangible assets
|
|
|
166,569
|
|
|
107,092
|
|
Other assets and receivables
|
|
|
41,051
|
|
|
35,105
|
|
Total assets
|
|
|
$
|
23,587,730
|
|
|
$
|
21,938,794
|
|
Liabilities
|
|
|
|
|
|
Non-life reserves
|
|
|
$
|
10,023,605
|
|
|
$
|
8,985,434
|
|
Life and health reserves
|
|
|
2,375,838
|
|
|
1,984,096
|
|
Unearned premiums
|
|
|
2,043,819
|
|
|
1,623,796
|
|
Other reinsurance balances payable
|
|
|
354,735
|
|
|
281,973
|
|
Deposit liabilities
|
|
|
18,944
|
|
|
15,026
|
|
Net tax liabilities
|
|
|
186,360
|
|
|
166,113
|
|
Accounts payable, accrued expenses and other
|
|
|
332,574
|
|
|
849,572
|
|
Debt related to senior notes
|
|
|
1,372,188
|
|
|
1,273,883
|
|
Debt related to capital efficient notes
|
|
|
70,989
|
|
|
70,989
|
|
Total liabilities
|
|
|
16,779,052
|
|
|
15,250,882
|
|
Shareholders' Equity
|
|
|
|
|
|
Common shares (par value $0.00000001; issued: 100,000,000 shares)
|
|
|
-
|
|
|
-
|
|
Preferred shares (par value $1.00; issued and outstanding:
28,169,062 shares; aggregate liquidation value: $704,227)
|
|
|
28,169
|
|
|
28,169
|
|
Additional paid-in capital
|
|
|
2,396,530
|
|
|
2,396,530
|
|
Accumulated other comprehensive loss
|
|
|
(74,226
|
)
|
|
(74,569
|
)
|
Retained earnings
|
|
|
4,458,205
|
|
|
4,337,782
|
|
Total shareholders' equity
|
|
|
6,808,678
|
|
|
6,687,912
|
|
Total liabilities and shareholders' equity
|
|
|
$
|
23,587,730
|
|
|
$
|
21,938,794
|
|
|
|
|
|
|
|
|
|
|
|
|
PartnerRe Ltd. Condensed Consolidated Statements of
Cash Flows (Expressed in millions of U.S. dollars) (Unaudited)
|
|
|
|
|
For the three months ended
|
|
For the nine months ended
|
|
|
|
September 30, 2017
|
|
September 30, 2016
|
|
September 30, 2017
|
|
September 30, 2016
|
Net cash provided by operating activities
|
|
|
$
|
113
|
|
|
$
|
197
|
|
|
$
|
241
|
|
|
$
|
316
|
|
Net cash used in investing activities(1)(2)
|
|
|
(77
|
)
|
|
(811
|
)
|
|
(630
|
)
|
|
(240
|
)
|
Net cash (used in) provided by financing activities(3)(4)
|
|
|
(12
|
)
|
|
723
|
|
|
(267
|
)
|
|
444
|
|
Effect of foreign exchange rate changes on cash
|
|
|
22
|
|
|
13
|
|
|
47
|
|
|
(18
|
)
|
Increase (decrease) in cash and cash equivalents
|
|
|
46
|
|
|
122
|
|
|
(609
|
)
|
|
502
|
|
Cash and cash equivalents - beginning of period
|
|
|
1,118
|
|
|
1,957
|
|
|
1,773
|
|
|
1,577
|
|
Cash and cash equivalents - end of period
|
|
|
$
|
1,164
|
|
|
$
|
2,079
|
|
|
$
|
1,164
|
|
|
$
|
2,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Net cash used in investing activities in the nine months ended
September 30, 2017 reflects cash used to fund the Aurigen
acquisition and investments in public equity funds.
|
|
|
|
(2)
|
|
Net cash used in investing activities in the three months ended
September 30, 2016 primarily represented proceeds from issuance of
Euro debt that was invested in short-term fixed maturities in
advance of these funds being used to redeem preferred shares and
senior notes in the fourth quarter of 2016. In addition to the
investments in short-term fixed maturities, net cash used in
investing activities in the nine months ended September 30, 2016
includes cash generated through redemption of investments in order
to fund the payment of the special dividend upon closing of the
merger with Exor N.V. (Special Dividend) in the first quarter of
2016.
|
|
|
|
(3)
|
|
Net cash used in financing activities in the nine months ended
September 30, 2017 reflects a redemption of debt by Aurigen.
|
|
|
|
(4)
|
|
Net cash provided by financing activities in the three months
ended September 30, 2016 includes proceeds from issuance of Euro
750 million senior debt in September 2016. In addition to the
proceeds, the net cash provided by financing activities in the
nine months ended September 30, 2016 includes the payment of the
Special Dividend and the settlement of certain share-based awards
upon closing of the merger with Exor N.V. in the first quarter of
2016.
|
|
|
|
|
PartnerRe Ltd. Consolidated Statements of
Comprehensive (Loss) Income (Expressed in thousands of
U.S. dollars) (Unaudited)
|
|
|
|
|
For the three months ended
|
|
For the nine months ended
|
|
|
|
September 30, 2017
|
|
September 30, 2016
|
|
September 30, 2017
|
|
September 30, 2016
|
Net (loss) income
|
|
|
$
|
(72,338
|
)
|
|
$
|
254,464
|
|
|
$
|
180,233
|
|
|
$
|
621,004
|
|
Change in currency translation adjustment
|
|
|
27,479
|
|
|
(18,946
|
)
|
|
2,337
|
|
|
(20,820
|
)
|
Change in net unrealized gains or losses on investments, net of tax
|
|
|
(76
|
)
|
|
(210
|
)
|
|
(228
|
)
|
|
(620
|
)
|
Change in unfunded pension obligation, net of tax
|
|
|
499
|
|
|
(328
|
)
|
|
(1,765
|
)
|
|
164
|
|
Comprehensive (loss) income
|
|
|
$
|
(44,436
|
)
|
|
$
|
234,980
|
|
|
$
|
180,577
|
|
|
$
|
599,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PartnerRe Ltd. Segment Information (Expressed
in millions of U.S. dollars, except percentages) (Unaudited)
|
|
|
|
For the three months ended September 30, 2017
|
|
|
|
P&C segment
|
|
Specialty segment
|
|
Total Non-life
|
|
Life and Health segment
|
|
Corporate and Other
|
|
Total
|
Gross premiums written
|
|
|
$
|
550
|
|
|
$
|
489
|
|
|
$
|
1,039
|
|
|
$
|
351
|
|
|
$
|
-
|
|
|
$
|
1,390
|
|
Net premiums written
|
|
|
$
|
461
|
|
|
$
|
457
|
|
|
$
|
918
|
|
|
$
|
332
|
|
|
$
|
-
|
|
|
$
|
1,250
|
|
Decrease in unearned premiums
|
|
|
132
|
|
|
6
|
|
|
138
|
|
|
7
|
|
|
-
|
|
|
145
|
|
Net premiums earned
|
|
|
$
|
593
|
|
|
$
|
463
|
|
|
$
|
1,056
|
|
|
$
|
339
|
|
|
$
|
-
|
|
|
$
|
1,395
|
|
Losses and loss expenses
|
|
|
(647
|
)
|
|
(221
|
)
|
|
(868
|
)
|
|
(315
|
)
|
|
-
|
|
|
(1,183
|
)
|
Acquisition costs
|
|
|
(140
|
)
|
|
(124
|
)
|
|
(264
|
)
|
|
(34
|
)
|
|
-
|
|
|
(298
|
)
|
Technical result
|
|
|
$
|
(194
|
)
|
|
$
|
118
|
|
|
$
|
(76
|
)
|
|
$
|
(10
|
)
|
|
$
|
-
|
|
|
$
|
(86
|
)
|
Other (loss) income
|
|
|
-
|
|
|
(1
|
)
|
|
(1
|
)
|
|
3
|
|
|
2
|
|
|
4
|
|
Other expenses
|
|
|
(19
|
)
|
|
(8
|
)
|
|
(27
|
)
|
|
(19
|
)
|
|
(44
|
)
|
|
(90
|
)
|
Underwriting result
|
|
|
$
|
(213
|
)
|
|
$
|
109
|
|
|
$
|
(104
|
)
|
|
$
|
(26
|
)
|
|
n/a
|
|
$
|
(172
|
)
|
Net investment income
|
|
|
|
|
|
|
|
|
16
|
|
|
82
|
|
|
98
|
|
Allocated underwriting result (1)
|
|
|
|
|
|
|
|
|
$
|
(10
|
)
|
|
n/a
|
|
n/a
|
Net realized and unrealized investment gains
|
|
|
|
|
|
|
|
|
|
|
61
|
|
|
61
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
(11
|
)
|
|
(11
|
)
|
Amortization of intangible assets
|
|
|
|
|
|
|
|
|
|
|
(6
|
)
|
|
(6
|
)
|
Net foreign exchange losses
|
|
|
|
|
|
|
|
|
|
|
(41
|
)
|
|
(41
|
)
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
(10
|
)
|
|
(10
|
)
|
Interest in earnings of equity method investments
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
9
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
n/a
|
|
$
|
(72
|
)
|
Loss ratio (2)
|
|
|
109.1
|
%
|
|
47.8
|
%
|
|
82.2
|
%
|
|
|
|
|
|
|
Acquisition ratio (3)
|
|
|
23.6
|
|
|
26.7
|
|
|
25.0
|
|
|
|
|
|
|
|
Technical ratio (4)
|
|
|
132.7
|
%
|
|
74.5
|
%
|
|
107.2
|
%
|
|
|
|
|
|
|
Other expense ratio (5)
|
|
|
3.1
|
|
|
1.8
|
|
|
2.6
|
|
|
|
|
|
|
|
Combined ratio (6)
|
|
|
135.8
|
%
|
|
76.3
|
%
|
|
109.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended September 30, 2016
|
|
|
|
P&C segment
|
|
Specialty segment
|
|
Total Non-life
|
|
Life and Health segment
|
|
Corporate and Other
|
|
Total
|
Gross premiums written
|
|
|
$
|
497
|
|
|
$
|
466
|
|
|
$
|
963
|
|
|
$
|
281
|
|
|
$
|
-
|
|
|
$
|
1,244
|
|
Net premiums written
|
|
|
$
|
439
|
|
|
$
|
421
|
|
|
$
|
860
|
|
|
$
|
271
|
|
|
$
|
-
|
|
|
$
|
1,131
|
|
Decrease in unearned premiums
|
|
|
141
|
|
|
35
|
|
|
176
|
|
|
2
|
|
|
-
|
|
|
178
|
|
Net premiums earned
|
|
|
$
|
580
|
|
|
$
|
456
|
|
|
$
|
1,036
|
|
|
$
|
273
|
|
|
$
|
-
|
|
|
$
|
1,309
|
|
Losses and loss expenses
|
|
|
(264
|
)
|
|
(279
|
)
|
|
(543
|
)
|
|
(230
|
)
|
|
-
|
|
|
(773
|
)
|
Acquisition costs
|
|
|
(140
|
)
|
|
(124
|
)
|
|
(264
|
)
|
|
(34
|
)
|
|
-
|
|
|
(298
|
)
|
Technical result
|
|
|
$
|
176
|
|
|
$
|
53
|
|
|
$
|
229
|
|
|
$
|
9
|
|
|
$
|
-
|
|
|
$
|
238
|
|
Other income
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2
|
|
|
1
|
|
|
3
|
|
Other expenses
|
|
|
(31
|
)
|
|
(19
|
)
|
|
(50
|
)
|
|
(15
|
)
|
|
(26
|
)
|
|
(91
|
)
|
Underwriting result
|
|
|
$
|
145
|
|
|
$
|
34
|
|
|
$
|
179
|
|
|
$
|
(4
|
)
|
|
n/a
|
|
$
|
150
|
|
Net investment income
|
|
|
|
|
|
|
|
|
15
|
|
|
87
|
|
|
102
|
|
Allocated underwriting result (1)
|
|
|
|
|
|
|
|
|
$
|
11
|
|
|
n/a
|
|
n/a
|
Net realized and unrealized investment gains
|
|
|
|
|
|
|
|
|
|
|
56
|
|
|
56
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
(12
|
)
|
|
(12
|
)
|
Amortization of intangible assets
|
|
|
|
|
|
|
|
|
|
|
(7
|
)
|
|
(7
|
)
|
Net foreign exchange losses
|
|
|
|
|
|
|
|
|
|
|
(9
|
)
|
|
(9
|
)
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
(29
|
)
|
|
(29
|
)
|
Interest in earnings of equity method investments
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
3
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
n/a
|
|
$
|
254
|
|
Loss ratio (2)
|
|
|
45.5
|
%
|
|
61.2
|
%
|
|
52.4
|
%
|
|
|
|
|
|
|
Acquisition ratio (3)
|
|
|
24.2
|
|
|
27.2
|
|
|
25.5
|
|
|
|
|
|
|
|
Technical ratio (4)
|
|
|
69.7
|
%
|
|
88.4
|
%
|
|
77.9
|
%
|
|
|
|
|
|
|
Other expense ratio (5)
|
|
|
5.3
|
|
|
4.2
|
|
|
4.8
|
|
|
|
|
|
|
|
Combined ratio (6)
|
|
|
75.0
|
%
|
|
92.6
|
%
|
|
82.7
|
%
|
|
|
|
|
|
|
(1)
|
|
Allocated underwriting result is defined as net premiums
earned, other income or loss and allocated net investment income
less losses and loss expenses on life and health contracts,
acquisition costs and other expenses.
|
|
|
|
(2)
|
|
Loss ratio is obtained by dividing losses and loss expenses by
net premiums earned.
|
|
|
|
(3)
|
|
Acquisition ratio is obtained by dividing acquisition costs by
net premiums earned.
|
|
|
|
(4)
|
|
Technical ratio is defined as the sum of the loss ratio and the
acquisition ratio.
|
|
|
|
(5)
|
|
Other expense ratio is obtained by dividing other expenses by
net premiums earned.
|
|
|
|
(6)
|
|
Combined ratio is defined as the sum of the technical ratio and
the other expense ratio.
|
|
|
|
|
PartnerRe Ltd. Segment Information (Expressed
in millions of U.S. dollars, except percentages) (Unaudited)
|
|
|
|
|
For the nine months ended September 30, 2017
|
|
|
|
P&C segment
|
|
Specialty segment
|
|
Total Non-life
|
|
Life and Health segment
|
|
Corporate and Other
|
|
Total
|
Gross premiums written
|
|
|
$
|
1,894
|
|
|
$
|
1,441
|
|
|
$
|
3,335
|
|
|
$
|
1,017
|
|
|
$
|
-
|
|
|
$
|
4,352
|
|
Net premiums written
|
|
|
$
|
1,630
|
|
|
$
|
1,294
|
|
|
$
|
2,924
|
|
|
$
|
976
|
|
|
$
|
-
|
|
|
$
|
3,900
|
|
Increase in unearned premiums
|
|
|
(177
|
)
|
|
(53
|
)
|
|
(230
|
)
|
|
(5
|
)
|
|
-
|
|
|
(235
|
)
|
Net premiums earned
|
|
|
$
|
1,453
|
|
|
$
|
1,241
|
|
|
$
|
2,694
|
|
|
$
|
971
|
|
|
$
|
-
|
|
|
$
|
3,665
|
|
Losses and loss expenses
|
|
|
(1,216
|
)
|
|
(657
|
)
|
|
(1,873
|
)
|
|
(884
|
)
|
|
-
|
|
|
(2,757
|
)
|
Acquisition costs
|
|
|
(359
|
)
|
|
(346
|
)
|
|
(705
|
)
|
|
(105
|
)
|
|
-
|
|
|
(810
|
)
|
Technical result
|
|
|
$
|
(122
|
)
|
|
$
|
238
|
|
|
$
|
116
|
|
|
$
|
(18
|
)
|
|
$
|
-
|
|
|
$
|
98
|
|
Other income
|
|
|
1
|
|
|
(1
|
)
|
|
-
|
|
|
10
|
|
|
1
|
|
|
11
|
|
Other expenses
|
|
|
(58
|
)
|
|
(26
|
)
|
|
(84
|
)
|
|
(49
|
)
|
|
(137
|
)
|
|
(270
|
)
|
Underwriting result
|
|
|
$
|
(179
|
)
|
|
$
|
211
|
|
|
$
|
32
|
|
|
$
|
(57
|
)
|
|
n/a
|
|
$
|
(161
|
)
|
Net investment income
|
|
|
|
|
|
|
|
|
44
|
|
|
255
|
|
|
299
|
|
Allocated underwriting result
|
|
|
|
|
|
|
|
|
$
|
(13
|
)
|
|
n/a
|
|
n/a
|
Net realized and unrealized investment gains
|
|
|
|
|
|
|
|
|
|
|
213
|
|
|
213
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
(32
|
)
|
|
(32
|
)
|
Amortization of intangible assets
|
|
|
|
|
|
|
|
|
|
|
(18
|
)
|
|
(18
|
)
|
Net foreign exchange losses
|
|
|
|
|
|
|
|
|
|
|
(107
|
)
|
|
(107
|
)
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
(33
|
)
|
|
(33
|
)
|
Interest in earnings of equity method investments
|
|
|
|
|
|
|
|
|
|
|
19
|
|
|
19
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
n/a
|
|
$
|
180
|
|
Loss ratio
|
|
|
83.7
|
%
|
|
52.9
|
%
|
|
69.5
|
%
|
|
|
|
|
|
|
Acquisition ratio
|
|
|
24.7
|
|
|
27.9
|
|
|
26.2
|
|
|
|
|
|
|
|
Technical ratio
|
|
|
108.4
|
%
|
|
80.8
|
%
|
|
95.7
|
%
|
|
|
|
|
|
|
Other expense ratio
|
|
|
4.0
|
|
|
2.1
|
|
|
3.1
|
|
|
|
|
|
|
|
Combined ratio
|
|
|
112.4
|
%
|
|
82.9
|
%
|
|
98.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months ended September 30, 2016
|
|
|
|
P&C segment
|
|
Specialty segment
|
|
Total Non-life
|
|
Life and Health segment
|
|
Corporate and Other
|
|
Total
|
Gross premiums written
|
|
|
$
|
1,872
|
|
|
$
|
1,512
|
|
|
$
|
3,384
|
|
|
$
|
870
|
|
|
$
|
-
|
|
|
$
|
4,254
|
|
Net premiums written
|
|
|
$
|
1,667
|
|
|
$
|
1,387
|
|
|
$
|
3,054
|
|
|
$
|
832
|
|
|
$
|
-
|
|
|
$
|
3,886
|
|
Increase in unearned premiums
|
|
|
(120
|
)
|
|
(54
|
)
|
|
(174
|
)
|
|
(6
|
)
|
|
-
|
|
|
(180
|
)
|
Net premiums earned
|
|
|
$
|
1,547
|
|
|
$
|
1,333
|
|
|
$
|
2,880
|
|
|
$
|
826
|
|
|
$
|
-
|
|
|
$
|
3,706
|
|
Losses and loss expenses
|
|
|
(933
|
)
|
|
(859
|
)
|
|
(1,792
|
)
|
|
(678
|
)
|
|
-
|
|
|
(2,470
|
)
|
Acquisition costs
|
|
|
(399
|
)
|
|
(367
|
)
|
|
(766
|
)
|
|
(99
|
)
|
|
-
|
|
|
(865
|
)
|
Technical result
|
|
|
$
|
215
|
|
|
$
|
107
|
|
|
$
|
322
|
|
|
$
|
49
|
|
|
$
|
-
|
|
|
$
|
371
|
|
Other income
|
|
|
3
|
|
|
(1
|
)
|
|
2
|
|
|
7
|
|
|
2
|
|
|
11
|
|
Other expenses
|
|
|
(108
|
)
|
|
(67
|
)
|
|
(175
|
)
|
|
(49
|
)
|
|
(143
|
)
|
|
(367
|
)
|
Underwriting result
|
|
|
$
|
110
|
|
|
$
|
39
|
|
|
$
|
149
|
|
|
$
|
7
|
|
|
n/a
|
|
$
|
15
|
|
Net investment income
|
|
|
|
|
|
|
|
|
42
|
|
|
264
|
|
|
306
|
|
Allocated underwriting result
|
|
|
|
|
|
|
|
|
$
|
49
|
|
|
n/a
|
|
n/a
|
Net realized and unrealized investment gains
|
|
|
|
|
|
|
|
|
|
|
415
|
|
|
415
|
|
Interest expense
|
|
|
|
|
|
|
|
|
|
|
(37
|
)
|
|
(37
|
)
|
Amortization of intangible assets
|
|
|
|
|
|
|
|
|
|
|
(20
|
)
|
|
(20
|
)
|
Net foreign exchange gains
|
|
|
|
|
|
|
|
|
|
|
29
|
|
|
29
|
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
(92
|
)
|
|
(92
|
)
|
Interest in earnings of equity method investments
|
|
|
|
|
|
|
|
|
|
|
5
|
|
|
5
|
|
Net income
|
|
|
|
|
|
|
|
|
|
|
n/a
|
|
$
|
621
|
|
Loss ratio
|
|
|
60.3
|
%
|
|
64.5
|
%
|
|
62.2
|
%
|
|
|
|
|
|
|
Acquisition ratio
|
|
|
25.8
|
|
|
27.5
|
|
|
26.6
|
|
|
|
|
|
|
|
Technical ratio
|
|
|
86.1
|
%
|
|
92.0
|
%
|
|
88.8
|
%
|
|
|
|
|
|
|
Other expense ratio
|
|
|
7.0
|
|
|
5.0
|
|
|
6.1
|
|
|
|
|
|
|
|
Combined ratio
|
|
|
93.1
|
%
|
|
97.0
|
%
|
|
94.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PartnerRe Ltd. Investment Portfolio (Expressed
in millions of U.S. dollars) (Unaudited)
|
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
Investments:
|
|
|
|
|
|
|
|
|
|
Fixed maturities
|
|
|
|
|
|
|
|
|
|
U.S. government
|
|
|
$
|
2,357
|
|
|
15
|
%
|
|
$
|
3,489
|
|
|
24
|
%
|
U.S. government sponsored enterprises
|
|
|
21
|
|
|
-
|
|
|
52
|
|
|
-
|
|
U.S. states, territories and municipalities
|
|
|
691
|
|
|
5
|
|
|
685
|
|
|
5
|
|
Non-U.S. sovereign government, supranational and government related
|
|
|
1,738
|
|
|
11
|
|
|
1,136
|
|
|
8
|
|
Corporate bonds
|
|
|
6,374
|
|
|
41
|
|
|
5,705
|
|
|
39
|
|
Mortgage/asset-backed securities
|
|
|
2,388
|
|
|
16
|
|
|
2,365
|
|
|
16
|
|
Total fixed maturities
|
|
|
13,569
|
|
|
88
|
|
|
13,432
|
|
|
92
|
|
Short-term investments
|
|
|
57
|
|
|
-
|
|
|
22
|
|
|
-
|
|
Equities
|
|
|
610
|
|
|
4
|
|
|
39
|
|
|
-
|
|
Other invested assets
|
|
|
1,164
|
|
|
8
|
|
|
1,076
|
|
|
8
|
|
Total investments
|
|
|
$
|
15,400
|
|
|
100
|
%
|
|
$
|
14,569
|
|
|
100
|
%
|
Cash and cash equivalents
|
|
|
1,164
|
|
|
|
|
1,773
|
|
|
|
Total investments and cash and cash equivalents
|
|
|
16,564
|
|
|
|
|
16,342
|
|
|
|
Maturity distribution:
|
|
|
|
|
|
|
|
|
|
One year or less
|
|
|
$
|
293
|
|
|
2
|
%
|
|
$
|
264
|
|
|
2
|
%
|
More than one year through five years
|
|
|
4,711
|
|
|
35
|
|
|
5,381
|
|
|
40
|
|
More than five years through ten years
|
|
|
3,985
|
|
|
29
|
|
|
3,703
|
|
|
27
|
|
More than ten years
|
|
|
2,249
|
|
|
16
|
|
|
1,741
|
|
|
13
|
|
Subtotal
|
|
|
11,238
|
|
|
82
|
|
|
11,089
|
|
|
82
|
|
Mortgage/asset-backed securities
|
|
|
2,388
|
|
|
18
|
|
|
2,365
|
|
|
18
|
|
Total fixed maturities and short-term investments
|
|
|
$
|
13,626
|
|
|
100
|
%
|
|
$
|
13,454
|
|
|
100
|
%
|
Credit quality by market value (Total
investments excluding Other invested assets):
|
AAA
|
|
|
8
|
%
|
|
|
|
6
|
%
|
|
|
AA
|
|
|
45
|
|
|
|
|
52
|
|
|
|
A
|
|
|
18
|
|
|
|
|
15
|
|
|
|
BBB
|
|
|
26
|
|
|
|
|
24
|
|
|
|
Below Investment Grade/Unrated
|
|
|
3
|
|
|
|
|
3
|
|
|
|
|
|
|
100
|
%
|
|
|
|
100
|
%
|
|
|
Expected average duration (1)
|
|
|
4.8
|
Yrs
|
|
4.9
|
Yrs
|
Average yield to maturity at market (1)
|
|
|
2.5
|
%
|
|
|
|
2.7
|
%
|
|
|
Average credit quality
|
|
|
A
|
|
|
|
A
|
|
|
(1)
|
|
Includes funds holding fixed income securities that are
classified with equities on the Consolidated Balance Sheets and
futures used for the purpose of managing duration.
|
|
|
|
|
PartnerRe Ltd. Distribution of Corporate Bonds (Expressed
in thousands of U.S. dollars) (Unaudited)
|
|
September 30, 2017
|
|
|
|
Fair Value
|
|
Percentage to Total Fair Value of Corporate
Bonds
|
|
Percentage to Invested Assets and cash
|
|
Largest single issuer as a percentage of Invested
Assets and cash
|
|
|
|
|
Distribution by sector - Corporate bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer noncyclical
|
|
|
$
|
1,376,266
|
|
|
21.6
|
%
|
|
8.3
|
%
|
|
0.9
|
%
|
|
|
|
|
Finance
|
|
|
1,209,591
|
|
|
19.0
|
|
|
7.3
|
|
|
0.9
|
|
|
|
|
|
Industrials
|
|
|
645,002
|
|
|
10.1
|
|
|
3.9
|
|
|
0.4
|
|
|
|
|
|
Energy
|
|
|
560,568
|
|
|
8.8
|
|
|
3.4
|
|
|
0.5
|
|
|
|
|
|
Consumer cyclical
|
|
|
503,133
|
|
|
7.9
|
|
|
3.0
|
|
|
0.4
|
|
|
|
|
|
Communications
|
|
|
467,609
|
|
|
7.3
|
|
|
2.8
|
|
|
0.7
|
|
|
|
|
|
Insurance
|
|
|
392,023
|
|
|
6.1
|
|
|
2.4
|
|
|
0.4
|
|
|
|
|
|
Utilities
|
|
|
322,070
|
|
|
5.1
|
|
|
1.9
|
|
|
0.2
|
|
|
|
|
|
Real estate investment trusts
|
|
|
304,315
|
|
|
4.8
|
|
|
1.8
|
|
|
0.3
|
|
|
|
|
|
Basic materials
|
|
|
244,718
|
|
|
3.8
|
|
|
1.5
|
|
|
0.4
|
|
|
|
|
|
Technology
|
|
|
243,363
|
|
|
3.8
|
|
|
1.5
|
|
|
0.4
|
|
|
|
|
|
Catastrophe bonds
|
|
|
67,502
|
|
|
1.1
|
|
|
0.4
|
|
|
-
|
|
|
|
|
|
Longevity and mortality bonds
|
|
|
25,618
|
|
|
0.4
|
|
|
0.2
|
|
|
0.2
|
|
|
|
|
|
Government guaranteed corporate debt
|
|
|
12,001
|
|
|
0.2
|
|
|
0.1
|
|
|
0.1
|
|
|
|
|
|
Total Corporate bonds
|
|
|
$
|
6,373,779
|
|
|
100.0
|
%
|
|
38.5
|
%
|
|
|
|
|
|
|
Finance sector - Corporate bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Banks
|
|
|
$
|
676,905
|
|
|
10.6
|
%
|
|
4.1
|
%
|
|
|
|
|
|
|
Investment banking and brokerage
|
|
|
351,086
|
|
|
5.5
|
|
|
2.1
|
|
|
|
|
|
|
|
Financial services
|
|
|
85,779
|
|
|
1.4
|
|
|
0.5
|
|
|
|
|
|
|
|
Commercial and consumer finance
|
|
|
44,111
|
|
|
0.7
|
|
|
0.3
|
|
|
|
|
|
|
|
Other
|
|
|
51,710
|
|
|
0.8
|
|
|
0.3
|
|
|
|
|
|
|
|
Total finance sector - Corporate bonds
|
|
|
$
|
1,209,591
|
|
|
19.0
|
%
|
|
7.3
|
%
|
|
|
|
|
|
|
|
|
|
AAA
|
|
AA
|
|
A
|
|
BBB
|
|
Non-Investment Grade/Unrated
|
|
Total
|
Credit quality of finance sector - Corporate bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Banks
|
|
|
$
|
20,242
|
|
|
$
|
21,031
|
|
|
$
|
346,720
|
|
|
$
|
288,912
|
|
|
$
|
-
|
|
|
$
|
676,905
|
|
Investment banking and brokerage
|
|
|
-
|
|
|
-
|
|
|
58,360
|
|
|
291,478
|
|
|
1,248
|
|
|
351,086
|
|
Financial services
|
|
|
-
|
|
|
27,680
|
|
|
24,776
|
|
|
33,323
|
|
|
-
|
|
|
85,779
|
|
Commercial and consumer finance
|
|
|
-
|
|
|
-
|
|
|
33,708
|
|
|
10,403
|
|
|
-
|
|
|
44,111
|
|
Other
|
|
|
-
|
|
|
6,422
|
|
|
25,114
|
|
|
20,174
|
|
|
-
|
|
|
51,710
|
|
Total finance sector - Corporate bonds
|
|
|
$
|
20,242
|
|
|
$
|
55,133
|
|
|
$
|
488,678
|
|
|
$
|
644,290
|
|
|
$
|
1,248
|
|
|
$
|
1,209,591
|
|
% of total
|
|
|
2
|
%
|
|
5
|
%
|
|
40
|
%
|
|
53
|
%
|
|
-
|
%
|
|
100
|
%
|
Concentration of investment risk
The top 10 Corporate bond issuers account for 18.3% of the Company's
total corporate bonds. The single largest issuer accounts for 2.3% of
the Company's total Corporate bonds.
|
PartnerRe Ltd. Analysis of Non-Life Reserves (Expressed
in thousands of U.S. dollars) (Unaudited)
|
|
|
|
|
As at and for the three months ended
|
|
As at and for the nine months ended
|
|
|
|
September 30, 2017
|
|
September 30, 2016
|
|
September 30, 2017
|
|
September 30, 2016
|
Reconciliation of beginning and ending Non-life reserves:
|
|
|
|
|
|
|
|
|
|
Gross liability at beginning of period
|
|
|
$
|
9,196,466
|
|
|
$
|
9,457,499
|
|
|
$
|
8,985,434
|
|
|
$
|
9,064,711
|
|
Reinsurance recoverable at beginning of period
|
|
|
(327,428
|
)
|
|
(262,411
|
)
|
|
(266,742
|
)
|
|
(189,234
|
)
|
Net liability at beginning of period
|
|
|
8,869,038
|
|
|
9,195,088
|
|
|
8,718,692
|
|
|
8,875,477
|
|
Net incurred losses related to:
|
|
|
|
|
|
|
|
|
|
Current year
|
|
|
1,055,103
|
|
|
716,426
|
|
|
2,255,999
|
|
|
2,296,956
|
|
Prior years
|
|
|
(187,026
|
)
|
|
(173,254
|
)
|
|
(383,212
|
)
|
|
(505,073
|
)
|
|
|
|
868,077
|
|
|
543,172
|
|
|
1,872,787
|
|
|
1,791,883
|
|
Change in reserve agreement (1)
|
|
|
2,191
|
|
|
(20,553
|
)
|
|
9,685
|
|
|
7,671
|
|
Net losses paid
|
|
|
(541,063
|
)
|
|
(465,912
|
)
|
|
(1,677,360
|
)
|
|
(1,428,870
|
)
|
Effects of foreign exchange rate changes
|
|
|
101,126
|
|
|
24,526
|
|
|
375,565
|
|
|
30,160
|
|
Net liability at end of period
|
|
|
9,299,369
|
|
|
9,276,321
|
|
|
9,299,369
|
|
|
9,276,321
|
|
Reinsurance recoverable at end of period
|
|
|
724,236
|
|
|
290,151
|
|
|
724,236
|
|
|
290,151
|
|
Gross liability at end of period
|
|
|
$
|
10,023,605
|
|
|
$
|
9,566,472
|
|
|
$
|
10,023,605
|
|
|
$
|
9,566,472
|
|
|
|
|
|
|
|
|
|
|
|
Breakdown of gross liability at end of period:
|
|
|
|
|
|
|
|
|
|
Case reserves
|
|
|
$
|
4,119,683
|
|
|
$
|
4,016,213
|
|
|
$
|
4,119,683
|
|
|
$
|
4,016,213
|
|
Additional case reserves
|
|
|
163,752
|
|
|
176,248
|
|
|
163,752
|
|
|
176,248
|
|
Incurred but not reported reserves
|
|
|
5,740,170
|
|
|
5,374,011
|
|
|
5,740,170
|
|
|
5,374,011
|
|
Gross liability at end of period
|
|
|
$
|
10,023,605
|
|
|
$
|
9,566,472
|
|
|
$
|
10,023,605
|
|
|
$
|
9,566,472
|
|
Gross liability at end of period by Non-life segment:
|
|
|
|
|
|
|
|
|
|
P&C
|
|
|
7,137,387
|
|
|
6,428,472
|
|
|
7,137,387
|
|
|
6,428,472
|
|
Specialty
|
|
|
2,886,218
|
|
|
3,138,000
|
|
|
2,886,218
|
|
|
3,138,000
|
|
Gross liability at end of period
|
|
|
$
|
10,023,605
|
|
|
$
|
9,566,472
|
|
|
$
|
10,023,605
|
|
|
$
|
9,566,472
|
|
Unrecognized time value of Non-life reserves (2)
|
|
|
$
|
508,457
|
|
|
$
|
316,168
|
|
|
$
|
508,457
|
|
|
$
|
316,168
|
|
Non-life paid loss ratio data:
|
|
|
|
|
|
|
|
|
|
Non-life paid losses to incurred losses ratio
|
|
|
62.3
|
%
|
|
85.8
|
%
|
|
89.6
|
%
|
|
79.7
|
%
|
Non-life paid losses to net premiums earned ratio
|
|
|
51.3
|
%
|
|
45.0
|
%
|
|
62.3
|
%
|
|
49.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The change in the reserve agreement is due to adverse
(favorable) development on Paris Re 's reserves which are
guaranteed by Axa under the reserve agreement.
|
|
|
|
(2)
|
|
The unrecognized time value of non-life reserves represents the
difference between the recorded gross/net liability for non-life
reserves and the amount of gross/net liability for non-life
reserves that would be recorded if the underlying non-life
reserves were discounted. The unrecognized time value, or
discount, in the non-life reserves is calculated by applying
appropriate risk-free rates by currency and duration to the
underlying non-life reserves.
|
|
|
|
PartnerRe Ltd.
Life Value In Force
The Company calculates Value in Force (VIF) for its Life portfolio,
which represents the value of the Life portfolio that is not recognized
in the Consolidated Balance Sheets prepared under generally accepted
accounting principles in the United States (U.S. GAAP). Accordingly,
there is no corresponding measure that is prepared in accordance with
U.S. GAAP. Management believes that this is useful information for
investors, analysts, rating agencies and others. The Life VIF
calculation includes the business written in the Company's Life and
Health segment, except for the PartnerRe Health business.
The Company's Life VIF calculation uses market consistent techniques,
but primarily differs from a full Market Consistent Embedded Value
(MCEV) calculation, as defined in the European Insurance CFO Forum MCEV
principles, due to: (i) different methodologies used; and ii) the Life
VIF is only a component of MCEV and, specifically, the tangible assets
backing the liabilities are not considered in the Company's calculation.
The Company's Life VIF, which is calculated on a going concern basis, is
the sum of:
-
present value of future profits - which is defined as the net present
value of shareholders' projected after-tax cash flows from the
in-force business on a best-estimate assumption basis. The discount
rates used reflect currency-specific market yields on zero coupon
government bonds at given durations and are applied to projected
deterministic cash flows and to calculate risk-free investment
returns. The best-estimate is defined as median biometric assumptions
and does not include any provision for adverse deviation. The Company
attributes no value to future new business or renewals of short-term
business. Allocated inflated-adjusted expenses are projected on a best
estimate basis;
-
cost of non-hedgeable risks - which is defined as the cost of holding
capital for non-hedgeable financial and non-hedgeable non-financial
risks, such as a mortality deviation from shocks or changes in trends.
The non-hedgeable risk capital has been determined using an internal
economic capital model calibrated to a 99.6% Value at Risk (VaR)
corresponding to a 1 in 250 year event;
-
frictional costs - which is defined as the cost of double taxation or
investment management charges on assets backing required capital;
-
time value of options and guarantees (TVOG) - which is defined as the
difference between the market value and the intrinsic value of the
option calculated using stochastic techniques. The TVOG is significant
to the guaranteed minimum death benefit (GMDB) portfolio where the
Company covers death claims on savings plans, where the sum reinsured
is the difference between the invested premium amount and the current
fund value; and
-
cost of non-economic excess encumbered capital - which is defined as
the cost of any encumbered capital in excess of economic capital
required by local regulations.
Actuarial non-economic assumptions, such as current and future
mortality, are based on the most recent experience available, combined
with internal and industry benchmarks, including trend expectation where
appropriate.
The Life VIF is sensitive to changes in assumptions. In particular, the
Life VIF is sensitive to changes in yield curves that are used for
discounting, changes in equity market value assumptions and implied
volatilities.
The Company performs a detailed Life VIF calculation on an annual basis
and performs a roll-forward approach on an interim quarterly basis.
|
PartnerRe Ltd. Analysis of Life and Health Reserves (Expressed
in thousands of U.S. dollars) (Unaudited)
|
|
|
|
|
As at and for the three months ended
|
|
As at and for the nine months ended
|
|
|
|
September 30, 2017
|
|
September 30, 2016
|
|
September 30, 2017
|
|
September 30, 2016
|
Reconciliation of beginning and ending Life and health reserves:
|
|
|
|
|
|
|
|
|
|
Gross liability at beginning of period
|
|
|
$
|
2,271,323
|
|
|
$
|
2,046,248
|
|
|
$
|
1,984,096
|
|
|
$
|
2,051,935
|
|
Reinsurance recoverable at beginning of period
|
|
|
(35,041
|
)
|
|
(35,269
|
)
|
|
(31,372
|
)
|
|
(42,773
|
)
|
Net liability at beginning of period
|
|
|
2,236,282
|
|
|
2,010,979
|
|
|
1,952,724
|
|
|
2,009,162
|
|
Liability acquired related to the acquisition of Aurigen
|
|
|
-
|
|
|
-
|
|
|
67,916
|
|
|
-
|
|
Net incurred losses related to:
|
|
|
|
|
|
|
|
|
|
Current year
|
|
|
302,954
|
|
|
227,201
|
|
|
856,064
|
|
|
693,384
|
|
Prior years
|
|
|
12,078
|
|
|
2,587
|
|
|
27,823
|
|
|
(15,184
|
)
|
|
|
|
315,032
|
|
|
229,788
|
|
|
883,887
|
|
|
678,200
|
|
Net losses paid
|
|
|
(263,584
|
)
|
|
(215,432
|
)
|
|
(735,988
|
)
|
|
(622,318
|
)
|
Effects of foreign exchange rate changes
|
|
|
50,699
|
|
|
(3,824
|
)
|
|
169,890
|
|
|
(43,533
|
)
|
Net liability at end of period
|
|
|
2,338,429
|
|
|
2,021,511
|
|
|
2,338,429
|
|
|
2,021,511
|
|
Reinsurance recoverable at end of period
|
|
|
37,409
|
|
|
29,459
|
|
|
37,409
|
|
|
29,459
|
|
Gross liability at end of period
|
|
|
$
|
2,375,838
|
|
|
$
|
2,050,970
|
|
|
$
|
2,375,838
|
|
|
$
|
2,050,970
|
|
Life value in force
|
|
|
$
|
295,200
|
|
|
$
|
140,400
|
|
|
$
|
295,200
|
|
|
$
|
140,400
|
|
|
PartnerRe Ltd. Natural Catastrophe Probable Maximum
Losses (PMLs) (Expressed in millions of U.S. dollars) (Unaudited)
|
|
Single occurrence estimated net PML exposure
|
|
|
|
|
|
July 1, 2017
|
|
April 1, 2017
|
|
January 1, 2017
|
Zone
|
|
Peril
|
|
1-in-250 year PML
|
|
1-in-500 year PML (Earthquake perils
only)
|
|
1-in-250 year PML
|
|
1-in-500 year PML (Earthquake perils
only)
|
|
1-in-250 year PML
|
|
1-in-500 year PML (Earthquake perils
only)
|
U.S. Southeast
|
|
Hurricane
|
|
$
|
556
|
|
|
|
|
$
|
557
|
|
|
|
|
$
|
631
|
|
|
|
U.S. Northeast
|
|
Hurricane
|
|
573
|
|
|
|
|
567
|
|
|
|
|
616
|
|
|
|
U.S. Gulf Coast
|
|
Hurricane
|
|
586
|
|
|
|
|
557
|
|
|
|
|
583
|
|
|
|
Caribbean
|
|
Hurricane
|
|
175
|
|
|
|
|
184
|
|
|
|
|
196
|
|
|
|
Europe
|
|
Windstorm
|
|
403
|
|
|
|
|
394
|
|
|
|
|
404
|
|
|
|
Japan
|
|
Typhoon
|
|
209
|
|
|
|
|
204
|
|
|
|
|
198
|
|
|
|
California
|
|
Earthquake
|
|
512
|
|
|
$
|
640
|
|
|
480
|
|
|
$
|
633
|
|
|
488
|
|
|
$
|
665
|
British Columbia
|
|
Earthquake
|
|
143
|
|
|
306
|
|
|
159
|
|
|
312
|
|
|
166
|
|
|
307
|
Japan
|
|
Earthquake
|
|
330
|
|
|
368
|
|
|
316
|
|
|
350
|
|
|
309
|
|
|
352
|
Australia
|
|
Earthquake
|
|
152
|
|
|
222
|
|
|
150
|
|
|
211
|
|
|
148
|
|
|
184
|
New Zealand
|
|
Earthquake
|
|
140
|
|
|
201
|
|
|
137
|
|
|
200
|
|
|
131
|
|
|
171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The PML estimates are pre-tax and net of retrocession and
reinstatement premiums. The peril zones in this disclosure are major
peril zones for the industry. The Company has exposures in other peril
zones that can potentially generate losses greater than the PML
estimates in this disclosure.
For more information regarding cautionary language related to the
Natural Catastrophe PML disclosure and the forward-looking statements,
as well as uncertainties and limitations associated with certain
assumptions and the methodology used, refer to the Company's natural
catastrophe PML information and definitions (see Risk Management-Natural
Catastrophe PML in Item 3 of the Company's Annual Report on Form 20-F
for the year ended December 31, 2016).
|
PartnerRe Ltd. Reconciliation of GAAP and non-GAAP
measures (in thousands of U.S. dollars) (Unaudited)
|
|
|
|
|
For the three months ended
|
|
For the nine months ended
|
|
|
|
September 30, 2017
|
|
September 30, 2016
|
|
September 30, 2017
|
|
September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
Beginning of period common shareholder's equity
|
|
|
$
|
6,160,491
|
|
|
$
|
6,169,310
|
|
|
$
|
5,983,685
|
|
|
$
|
6,046,751
|
|
End of period common shareholder's equity
|
|
|
6,104,451
|
|
|
6,299,886
|
|
|
6,104,451
|
|
|
6,299,886
|
|
Average common shareholder's equity(1)
|
|
|
$
|
6,132,471
|
|
|
$
|
6,234,598
|
|
|
$
|
6,044,068
|
|
|
$
|
6,173,318
|
|
|
|
|
|
|
|
|
|
|
|
Annualized return on average common shareholders' equity
calculated with net income available to common shareholder
(2)
|
|
|
(5.5
|
)%
|
|
15.4
|
%
|
|
3.2
|
%
|
|
12.5
|
%
|
Less:
|
|
|
|
|
|
|
|
|
|
Annualized net realized and unrealized investment gains, net of tax,
on average common shareholder's equity(1)
|
|
|
4.2
|
|
|
3.6
|
|
|
4.4
|
|
|
7.9
|
|
Annualized net foreign exchange (losses) gains, net of tax, on
average common shareholder's equity(1)
|
|
|
(2.6
|
)
|
|
(0.3
|
)
|
|
(2.1
|
)
|
|
0.9
|
|
Annualized net interest in earnings of equity method investments,
net of tax, on average common shareholder's equity(1)
|
|
|
0.3
|
|
|
0.2
|
|
|
0.3
|
|
|
0.2
|
|
Annualized operating return on average common shareholder's equity(1)
|
|
|
(7.4
|
)%
|
|
11.9
|
%
|
|
0.6
|
%
|
|
3.5
|
%
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
|
$
|
(72,338
|
)
|
|
$
|
254,464
|
|
|
$
|
180,233
|
|
|
$
|
621,004
|
|
Less: Dividends to preferred shareholders
|
|
|
11,604
|
|
|
14,184
|
|
|
34,812
|
|
|
42,551
|
|
Net (loss) income available to common shareholder
|
|
|
(83,942
|
)
|
|
240,280
|
|
|
145,421
|
|
|
578,453
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Net realized and unrealized investment gains, net of tax
|
|
|
63,802
|
|
|
56,370
|
|
|
199,064
|
|
|
366,625
|
|
Net foreign exchange (losses) gains, net of tax
|
|
|
(40,023
|
)
|
|
(4,458
|
)
|
|
(95,001
|
)
|
|
40,854
|
|
Interest in earnings of equity method investments, net of tax
|
|
|
5,775
|
|
|
3,384
|
|
|
14,358
|
|
|
7,376
|
|
Operating (losses) earnings available to common shareholder
|
|
|
$
|
(113,496
|
)
|
|
$
|
184,984
|
|
|
$
|
27,000
|
|
|
$
|
163,598
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Average common shareholder's equity is calculated by using the
sum of the beginning of period and end of period common
shareholder's equity divided by two.
|
|
|
|
(2)
|
|
Net income or loss available to common shareholder is
calculated after preferred dividends.
|
|
|
|
|
PartnerRe Ltd. Reconciliation of GAAP and non-GAAP
measures (in thousands of U.S. dollars) (Unaudited)
|
|
|
|
|
For the three months ended
|
|
For the nine months ended
|
|
|
|
September 30, 2017
|
|
September 30, 2016
|
|
September 30, 2017
|
|
September 30, 2016
|
Annualized return on average common shareholder's equity(1)
calculated with net (loss) income available to common shareholder
|
|
|
(5.5
|
)%
|
|
15.4
|
%
|
|
3.2
|
%
|
|
12.5
|
%
|
Add:
|
|
|
|
|
|
|
|
|
|
Transaction and severance related costs(2), net of tax
|
|
|
0.4
|
|
|
0.8
|
|
|
0.4
|
|
|
2.0
|
|
Annualized return on average common shareholder's equity(1)
calculated with net (loss) income available to common shareholder,
adjusted by transaction and severance costs
|
|
|
(5.1
|
)%
|
|
16.2
|
%
|
|
3.6
|
%
|
|
14.5
|
%
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income available to common shareholder(3)
|
|
|
$
|
(83,942
|
)
|
|
$
|
240,280
|
|
|
$
|
145,421
|
|
|
$
|
578,453
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Transaction and severance related costs(2), net of tax
|
|
|
5,986
|
|
|
11,578
|
|
|
19,205
|
|
|
93,257
|
|
Net (loss) income available to common shareholder(3),
adjusted by transaction and severance costs
|
|
|
$
|
(77,956
|
)
|
|
$
|
251,858
|
|
|
$
|
164,626
|
|
|
$
|
671,710
|
|
|
|
|
|
|
|
|
|
|
|
Annualized operating return on average common shareholder's equity(1)
|
|
|
(7.4
|
)%
|
|
11.9
|
%
|
|
0.6
|
%
|
|
3.5
|
%
|
Add:
|
|
|
|
|
|
|
|
|
|
Transaction and severance related costs(2), net of tax
|
|
|
0.4
|
|
|
0.7
|
|
|
0.4
|
|
|
2.0
|
|
Annualized operating return on average common shareholder's equity(1),
adjusted by transaction and severance costs
|
|
|
(7.0
|
)%
|
|
12.6
|
%
|
|
1.0
|
%
|
|
5.5
|
%
|
|
|
|
|
|
|
|
|
|
|
Operating (losses) earnings available to common shareholder
|
|
|
$
|
(113,496
|
)
|
|
$
|
184,984
|
|
|
$
|
27,000
|
|
|
$
|
163,598
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Transaction and severance related costs(2), net of tax
|
|
|
5,986
|
|
|
11,578
|
|
|
19,205
|
|
|
93,257
|
|
Operating (losses) earnings available to common shareholder,
adjusted by transaction and severance costs
|
|
|
$
|
(107,510
|
)
|
|
$
|
196,562
|
|
|
$
|
46,205
|
|
|
$
|
256,855
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Average common shareholder's equity is calculated by using the
sum of the beginning of period and end of period common
shareholder's equity divided by two.
|
|
|
|
(2)
|
|
The adjustment of $6 million ($8 million pre-tax) for the three
months ended September 30, 2017 primarily represented
reorganization related costs. The adjustment of $19 million ($24
million pre-tax) for the nine months ended September 30, 2017
primarily represented reorganization related costs and transaction
costs related to the Aurigen acquisition. The adjustment of $12
million ($13 million pre-tax) for the three months ended September
30, 2016 represented reorganization related severance costs and
costs related to certain executive changes. The adjustment of $93
million ($106 million pre-tax) for the nine months ended September
30, 2016 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.
|
|
|
|
(3)
|
|
Net income or loss available to common shareholder is
calculated after preferred dividends.
|
|
|
|
|
PartnerRe Ltd. Reconciliation of GAAP and non-GAAP
measures (in thousands of U.S. dollars) (Unaudited)
|
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
Tangible book value:
|
|
|
|
|
|
Total shareholders' equity
|
|
|
$
|
6,808,678
|
|
|
$
|
6,687,912
|
Less:
|
|
|
|
|
|
Preferred shares, aggregate liquidation value
|
|
|
704,227
|
|
|
704,227
|
Common shareholder's equity
|
|
|
6,104,451
|
|
|
5,983,685
|
Less:
|
|
|
|
|
|
Goodwill (1)
|
|
|
456,380
|
|
|
456,380
|
Intangible assets, net of tax (1)
|
|
|
131,461
|
|
|
73,022
|
Tangible book value
|
|
|
$
|
5,516,610
|
|
|
$
|
5,454,283
|
|
|
|
|
|
|
Capital Structure:
|
|
|
|
|
|
Senior notes
|
|
|
$
|
1,372,188
|
|
|
$
|
1,273,883
|
Capital efficient notes (2)
|
|
|
63,384
|
|
|
63,384
|
Preferred shares, aggregate liquidation value
|
|
|
704,227
|
|
|
704,227
|
Common shareholder's equity
|
|
|
6,104,451
|
|
|
5,983,685
|
Total Capital
|
|
|
$
|
8,244,250
|
|
|
$
|
8,025,179
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The increase in intangible assets, net of tax, relates to the
recognition of the fair value of business acquired (VOBA) and
certain insurance licenses upon the acquisition of Aurigen, net of
amortization expense, in the three months ended June 30, 2017.
There was no related increase in goodwill as a bargain purchase
gain of less than $1 million was recorded in other income in the
Consolidated Statement of Operations.
|
|
|
|
(2)
|
|
Non-consolidated debt issued externally related to CENts of
$63m does not appear in the debt line of the Consolidated Balance
Sheet as the finance entity that issued the debt (PartnerRe
Finance II Inc.)does not meet the U.S. GAAP criteria for
consolidation. The Consolidated Balance Sheets as of September 30,
2017 and December 31, 2016 include the related intercompany notes
of $71m issued by PartnerRe U.S. Corporation to PartnerRe Finance
II Inc.
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20171116006135/en/
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