PartnerRe Ltd. yesterday reported record operating results for the second quarter 2002, and reaffirmed its prior earnings guidance for the full year.

PartnerRe president and CEO, Patrick Thiele said: "Overall, we are pleased with our second quarter results, both in terms of growth and profitability. The reinsurance market continues to improve in response to increasing loss costs and to restrained growth in industry capital. In this environment, PartnerRe continues to excel."

For the three months ended June 30, 2002, operating earnings, which exclude net realised investment gains or losses and are calculated after payment of preferred dividends, were $71.3 million or $1.38 per share on a fully diluted basis.

This compares to operating earnings of $47.5 million, or $0.92 per share for the second quarter of 2001.

Net income for the three months ended June 30, 2002 was $66.6 million, or $1.19 per share on a fully diluted basis. Net income includes net (after tax) realised investment losses of $9.7 million. Net income for the second quarter of 2001 was $53.2 million or $0.93 per share, which included net investment gains of $0.7 million.

Total revenues for the quarter were $620.3 million, comprised of $565.7 million of net premiums earned, net investment income of $59.5 million, and net realised investment losses of $6.3 million. For the second quarter of 2001, revenues were $452.6 million, with $386.3 million of net premiums earned, net investment income of $60.8 million, and net realised investment gains of $5.5 million.

For the six months ended June 30, 2002, operating earnings were $138.1 million or $2.67 per share on a fully diluted basis. Net premiums written were nearly $1.4 billion, an increase of 38 percent from the prior year. Net income for the six months was $129.8 million, or $2.32 per share. Net income for the period includes net (after-tax) realised losses of $18.3 million. Operating earnings for the six months ended June 30, 2001 were $103.1 million or $2.00 per share. Net income for the first six months of 2001 was $149.1 million or $2.70 per share after net (after-tax) realised gains of $8.2 million and the cumulative effect of adopting FAS 133 of $27.8 million. In 2002, the company adopted Financial Accounting Standard No. 142, "Goodwill and Other Intangible Assets." As a result, it ceased amortising goodwill on January 1, 2002, which resulted in the elimination of quarterly charges of $5.6 million after tax, or 11 cents per share, and $11.2 million or 22 cents per share for the six months.

At June 30, 2002, total assets were $7.9 billion, total capitalisation was $2.5 billion, and shareholders' equity was $1.9 billion. Book value per common share was $31.52 on a fully diluted basis, compared to $29.24 per share on March 31, 2002.

Separately, the company announced that the Board of Directors declared a regular quarterly dividend of $0.29 per common share, payable on September 3, 2002, to shareholders of record on August 23, 2002. The stock will trade ex-dividend commencing August 21, 2002.

"The company again experienced strong growth in net written premiums, a trend that started in the first quarter of 2001," Mr. Thiele said. "Year over year, our total net written premiums were up 37 percent for the quarter and 38 percent for the half-year. This was driven by both price increases and real growth in treaties and participations."

Mr. Thiele continued, "Profitability remains acceptable with a combined ratio for the quarter of 94.4 percent and an annualised return on equity in excess of 18 percent. This results from better pricing, improved terms and conditions and PartnerRe's good risk selection and balanced book of business.

"In general, our shorter-tail lines of business, such as catastrophe and aviation, performed exceptionally well but were counterbalanced somewhat by continuing loss issues in credit & surety as well as higher reported losses in the quarter in casualty and motor lines."

Mr. Thiele concluded, "Consistent with earlier commentary, we believe our net written premium increases for the year will exceed our 30 percent objective.

"We are also comfortable that, absent unusual loss events, we will meet our 2002 plan of operating earnings per share of at least $5.50 and a return on beginning equity in excess of 17 percent."