Bermuda-based PartnerRe Ltd. has launched an internal review across its organisation and is comfortable that none of the underwriting and pricing practices alleged by New York's Attorney General exist within the company.

President and CEO Patrick Thiele spoke to attorney general's Eliot Spitzer's probe of the insurance industry at yesterday's conference call on the company's third quarter earnings results.

"We at PartnerRe have been disturbed by the allegations made in the complaint filed by Mr. Spitzer as any such activity reflects poorly on the industry as a whole. PartnerRe is not involved in this investigation and we do not expect to be," he said. "For the sake of good governance we are carrying out our own internal review across the organisation and are comfortable that none of the underwriting and pricing alleged in Mr. Spitzer's suit exists within PartnerRe."

The company is not planning to release the results of the review.

Mr. Thiele does not expect the Attorney General's investigation will impact insurers buying behaviour in terms of going from a broker distribution method for reinsurers to a direct method.

He said: "I don't see it being that kind of impact. Reinsurance brokers bring significant value to the insurance company client.

"They help structure the programme. They help negotiate the programme and that overlying value proposition will allow them to continue to be competitive with the direct distribution methodology."

Mr. Thiele also spoke about hurricane and typhoon activity that cut into PartnerRe's third-quarter profit.

The company's quarterly net income was $83.2 million, or $1.46 per share, compared to $116.9 million, or $2.08 per share in the year-ago period.

The results included $21 million in after-tax investment gains, which boosted earnings per share by 39 cents, during this year's third quarter. The year-ago period included gains of $15.3 million of gains, or 29 cents per share.

PartnerRe reported operating earnings ? which do not include investment gains ? of $57.3 million, or $1.07 per share, down from $96.7 million, or $1.79 per share.

Revenue during the period was $1.05 billion, up from $968.5 million in the year-ago period. Mr. Thiele (pictured) said that the rate of paying out the claims for hurricanes was going to take a little longer because of frequency of claims, but "my guess would be it will be mostly paid off within nine months to a year for us".

"We did an extraordinary job of underwriting in the cat unit and frankly the cat losses would have been less than I expected in total," he said, adding that global and US losses were about what he expected.

"I'll do a tip of the hat to our cat underwriters where we're underweight in Florida and we're also underweight in Japan and within that underweight we avoided the cedants with the particularly large losses and so we did a very good job in terms of our cat underwriting."

PartnerRe expects it will report operating earnings per share of $6.90 for the full year. Analyst project earnings per share of $6.61 for 2004.

Mr. Thiele said that the third quarter may turn out to be the defining quarter for the company. "In essence we took what was one of the worst cat quarters in the world if not the worst natural cat quarter in history and we still generated a ten percent return on equity and grew our book value by approximately five percent of quarter and that outlines the progress we've made as a company in achieving not only a high level of profitability but a more stable level of profitability," he said.

PartnerRe is forecasting that the market overall will be more competitive in 2005 both in terms of pricing and in terms of conditions.

"We expect to see a continuation of trends that began earlier this year, notably increased competition, more net retentions by the primary carriers or cedants discontinuing lines of business," Mr. Thiele said.

"With continued dislocation in market, we are seeing a greater push for reinsurance security which also means that in some cases cedants are looking for more reinsurance in placements than they might have had in the past."