Bermuda's PartnerRe Ltd.'s management last night claimed it is now one of the world's most profitable insurance companies after reporting record profits and growth during 2003.

At close of markets yesterday the company, which has offices on Pitts Bay Road, reported that it had more than doubled its profits for 2003 to $467.7 million after a turn-around in investment income, strong premium growth and excellent underwriting profitability, the company's management said.

“2003 was a record year for PartnerRe by virtually all measures of growth and profitability,” said Patrick Thiele, president and chief executive officer of the company.

Net income for 2002 was $190.3 million, which included a net after tax loss on investments of $16.7 million, while the figure for 2003 included a net after-tax realised gain on investments of $80.0 million.

“We had another strong quarter to finish 2003, our tenth anniversary year, well ahead of plan,” said Mr. Thiele. “We had very strong premium growth, excellent underwriting profitability, and generated in excess of $1.1 billion of operating cash flow.”

He added that the company had a full year operating return on equity of 20 percent. And he said that this affirmed the company's “leadership position as one of the world's most profitable reinsurers”.

Mr. Thiele added: “We also grew book value by 25 percent to year-end shareholders' equity of $2.6 billion, again underscoring the financial strength and stability of our company.”

For the final quarter of 2003, the company showed an 18.2 increase in profits to $104.5 million compared to $88.4 million for the same period a year earlier.

Operating earnings for the fourth quarter of 2003 were $90.3 million or $1.67 per share on a fully diluted basis (operating earnings exclude net realised investment gains or losses and are calculated after payment of preferred dividends). Net premiums written for the fourth quarter of 2003 were $772.5 million, an 11 percent increase over the comparable period in 2002.

Total revenues increased 27 percent in the quarter to $1.1 billion, including $946.1 million of net premiums earned an increase of 26 percent, net investment income of $73.2 million - an increase of 10 percent; and net realised investment gains of $19.0 million. For the fourth quarter of 2002, revenues were $824.2 million, with $748.7 million of net premiums earned, net investment income of $66.8 million, and net realised investment gains of $6.6 million.

For the year ended December 31, 2003, net premiums written were $3.6 billion, an increase of 35 percent from the prior year.

Total revenues for 2003 were $3.9 billion, a 45 percent increase over the $2.7 billion in 2002.

At December 31, 2003, total assets were $10.9 billion, total capitalisation was $3.2 billion, and total shareholders' equity was $2.6 billion.

This compares to total assets of $8.5 billion, total capitalisation of $2.7 billion, and total shareholders' equity of $2.1 billion at December 31,2002.

“Growth in net premiums written for the full year represented a 35 percent increase over 2002 to a record level of $3.6 billion,” added Mr. Thiele.

“This result is well ahead of the 30 percent growth target we communicated in our plan for 2003, and demonstrates the strength of the PartnerRe franchise in accessing business which we believe will provide superior returns.”

Book value per common share was $42.48 on a fully diluted basis, compared to $34.02 per share at December 31, 2002.

PartnerRe also announced that it increased the annual common share dividend by 10 percent to $1.36 from $1.24.

“We understand that dividends are an important component of shareholder return,” Mr. Thiele said.

“We are pleased that PartnerRe has increased its common share dividend every year since its inception in 1993, generating a compound annual growth rate of 13 percent.”