Bermuda-based insurer PartnerRe is expected to see improved operating results and growth in premium rates this year as its US and French operating subsidiaries benefit from the hard insurance market.

That was the view of ratings agency A.M. Best Co., which yesterday affirmed the group financial strength rating of A+ (Superior) for the group and its core subsidiaries.

Best said the rating reflected PartnerRe's "prominent position as a leading global multi-line reinsurance organisation offering diversified products and international market capabilities".

"PartnerRe's shareholders equity of $1.9 billion at September 30, 2002, and 2001 net premiums of $1.8 billion rank it among the top reinsurance companies in the world," the agency said.

"Operating in an intensely competitive environment, PartnerRe has achieved generally strong consolidated operating returns through its client-oriented strategy, specialised underwriting expertise, diverse risk portfolio and strong operational discipline."

The agency praised PartnerRe's the company;s superior capitalisation and sound investment and reserving strategies.

Concerns over earnings susceptibility to catastrophe exposure and the group's modest use of retrocessional agreements were offset by PartnerRe's disciplined and analytical underwriting approach, resulting in controlled risk commitments along with successful diversification initiatives that improve overall earnings stability.

AM Best said it expected PartnerRe's US subsidiary to see improved results in 2003 as the company "benefits from higher rates and a flight to quality" after suffering losses last year as a result of the September 11 terrorist attack and the collapse of Enron.

Best said Paris-based PartnerRe SA, the fourth-largest French reinsurer, has historically been the weakest performer in the PartnerRe group and has received capital; and reinsurance protection from the parent company.

"However, A.M. Best expects a significant improvement for full-year 2002 and prospectively in 2003."

PartnerRe this week announced its board of directors had declared a dividend for the period October 1, 2002-December 31, 2002 of $0.50 per share on the Company's 8% Series A Cumulative Preferred Shares.