Bermuda-based PartnerRe Ltd. reported net income of $231.7 million, or $4.76 per share for the first quarter of 2015. The figure includes net after-tax realized and unrealized gains on investments of $100.3 million, or $2.06 per share.
By comparison net income for the first quarter of 2014 was $295.7 million, or $5.61 per share, including net after-tax realized and unrealized gains on investments of $115.8 million, or $2.20 per share.
The Company reported operating earnings of $150.5 million, or $3.09 per share, for the first quarter of 2015, compared to $176.9 million, or $3.36 per share, for the first quarter of 2014.
The announcement explained that operating earnings or loss “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, the loss on redemption of preferred shares and certain net after-tax withholding tax on inter-company dividends (included in other expenses), and is calculated after the payment of preferred dividends. All references to per share amounts in the text of this press release are on a fully diluted basis.”
PartnerRe Interim CEO David Zwiener commented: “We had a solid start to 2015. Despite continued pressure across all reinsurance lines, our operating performance in the first quarter was characterized by very good underlying technical results and included an absence of major catastrophes and continued favorable reserve development, resulting in a 9.8 percent operating ROE.
“This, combined with strong results in our investment portfolio, generated tangible book value per share growth of 3.2 percent. These results clearly demonstrate our excellent execution capabilities and the strength of the PartnerRe franchise.”
PartnerRe listed the following “highlights for operations in the first quarter of 2015 compared to the same period in 2014,” as follows:
— Net premiums written of $1.7 billion were down 5 percent. On a constant foreign exchange basis, net premiums written were up 1 percent driven by the Life and Health segment and modest increases in the Catastrophe and Global (Non-U.S.) P&C Non-life sub-segments. These increases were almost entirely offset by a decrease in the North America Non-life sub-segment.
— Net premiums earned of $1.2 billion were down 2 percent. On a constant foreign exchange basis, net premiums earned were up 3 percent primarily due to the Life and Health segment and the earning of business written in prior periods in the Global Specialty Non-life sub-segment. These increases were partially offset by a decrease in the North America Non-life sub-segment.
— The Non-life combined ratio was 82.8 percent. The combined ratio benefited from favorable prior year development of 24.0 points (or $224 million). All Non-life sub-segments experienced net favorable development from prior accident years during the first quarter of 2015.
— Other expenses of $125 million include pre-tax costs of $31 million related to the amalgamation with Axis, or $0.63 per diluted share, pre-tax.
— Net investment income of $105 million was down 10 percent, or 8 percent on a constant foreign exchange basis, primarily driven by lower reinvestment rates.
— Pre-tax net realized and unrealized investment gains were $116 million, primarily reflecting decreases in U.S. and Euro risk-free rates.
— The effective tax rate on operating earnings and non-operating earnings was 17.2 percent and 35.6 percent, respectively.