PartnerRe last night reported a 12 percent fall in first-quarter net income compared to 2006 after it sustained losses of $44 million from a winter storm in Europe.

The storm, named Kyrill, brought hurricane-force winds and widespread damage to the UK and parts of western and central Europe in January this year.

The Bermuda reinsurer said it made a profit of $169.3 million in the first three months of the year, or $2.76 per share, compared to last year's corresponding figure of $193.2 million, or $3.21 per share.

The company's first-quarter results beat the predictions of analysts, who expected net income of $1.71 per share.

PartnerRe president and chief executive officer Patrick Thiele said: "PartnerRe continues to benefit from a solid, well-balanced book of business that generated a 19 percent annualised operating return on beginning shareholders' equity, despite the impact of Winterstorm Kyrill, which resulted in losses to PartnerRe of approximately $44 million, net of reinstatement premiums.

"We continue to grow GAAP book value per share at a healthy pace, as is demonstrated by 4 percent growth in the first quarter and 27 percent growth year over year, to $58.45."

PartnerRe's total revenue fell slightly to $962.3 million from $995.6 million a year earlier.

Operating earnings for the first quarter were $157.9 million, or $2.71 per share, compared to $133.7 million, or $2.32 per share, for the first quarter of 2006. The company's non-life combined ratio was 85.4 percent, compared to 87.8 percent for the same period last year.

Net premiums for the non-life segment of the company were down 6 percent to $1.1 billion for the quarter.

Mr. Thiele was optimistic about the rest of the year. "Our results this quarter are consistent with the current state of the reinsurance market and with our underwriting approach," the CEO said.

"Today we are experiencing a more competitive environment as cedants retain a greater proportion of their business. However the resultant price declines are being are being offset by benign loss trends, leading to expected profitability on our current business that is above our long-term goals."

PartnerRe repurchased $33.8 million worth of common shares during the first quarter, as shareholders' equity increased from $3.8 billion at the end of 2006 to $3.9 billion at March 31, 2007.