Bermuda-based PartnerRe Ltd. reported last night that its net income fell to $83.2 million or $1.46 per share in the third quarter compared to $116.9 million or $2.08 per share, a year earlier. The figures include net after-tax realised gains on investments of $21.0 million or $0.39 per share in 2004 and net after-tax realised gains on investments of $15.3 million or $0.29 per share in 2003.

Operating earnings for the third quarter of 2004 are $57.3 million or $1.07 per share on a fully diluted basis compared to $96.7 million or $1.79 per share for the year earlier.

PartnerRe president & chief executive officer, Patrick Thiele said in last night's earnings release that PartnerRe's portfolio diversification of the past six years has resulted in consistently high quality and stable earnings.

He said: "The third quarter saw an exceptionally active hurricane and typhoon season with the cost of natural disasters reaching a new record for the industry. In this difficult environment, PartnerRe continued to achieve very credible operating results with annualised operating returns on equity of 10 percent for the quarter and 16 percent for the year-to-date. Additionally, book value per share has grown 11 percent to a new record level of $47.35 on a year-to-date basis."

Net premiums written for the third quarter of the year increased to $805.3 million or eight percent over the third quarter of 2003. Total revenues for the quarter were up nine percent from the same period in 2003 to $1.1 billion. This includes a six percent increase on net premiums earned to $943.8 million an eight percent increase on net investment income to $69.6 million and net realised investment gains of $32.8 million.

Mr. Thiele said that despite being challenged by difficult conditions in the catastrophe business, PartnerRe performed exceptionally well in the quarter.

"Our Non-Life combined ratio of 99.5% included $137 million or 16 points from the four Florida/Caribbean hurricanes. The fact that we were able to withstand that level of loss and still remain profitable is a testament to both our treaty underwriting skills and the excellent spread of business that PartnerRe has achieved."

The Non-Life segment reported net premiums written of $707.1 million for the quarter, up 4 percent as compared to last year.

The US Property and Casualty business, which represented approximately 29 percent of total net premiums written for the quarter, reported net premiums written of $233.7 million, up 18 percent over the 2003 quarter. Net premiums earned increased 7 percent during the quarter when compared to the same period in 2003. The technical ratio for this sub-segment was 118.1 percent, compared to 102.8 percent in the third quarter of 2003, primarily reflecting the increased level of large losses relating to the four Atlantic hurricanes, as well as approximately $17.8 million in additions to prior year reserves.

The Global (Non-US) Property and Casualty business, which represents approximately 19 percent of total net premiums written, reported net premiums written of $154.7 million for the third quarter of 2004, compared to $165 million for the same period in 2003.

The Worldwide Specialty business, which represents approximately 40 percent of total net premiums written for the quarter, reported net premiums written of $318.7 million for the third quarter, essentially flat with the same prior year period. Net premiums earned were down 5 percent for the quarter, compared to the same period in 2003.

The Life segment, which markets coverage's primarily in Europe, Canada and Latin America, and represents approximately 12 percent of total net premiums written in the quarter, reported net premiums written of $97.0 million for the quarter, reflecting 60 percent growth over the third quarter of 2003. The allocated underwriting result was breakeven for the quarter, compared to a similar result in the third quarter of 2003.

The ART (Alternative Risk Transfer) segment comprises finite reinsurance, structured finance, weather related products, and the results of the Company's recent investment in Channel Re. The underwriting result for this segment was a gain of $1 million for the third quarter of 2004, comparable to a similar result in the third quarter of 2003.

Looking forward to the January 1 renewal season, PartnerRe is realistic about the state of the global reinsurance market.

Mr. Thiele said: "While we expect the recent natural catastrophes and competitive dislocations to have a steadying influence on pricing in some lines, we continue to expect prices and terms and conditions to be more competitive at January 1. We think this is an excellent environment to highlight PartnerRe's financial strength and underwriting and relationship management skills."

For the remainder of 2004, Mr. Thiele says that PartnerRe can achieve its stated plan for the year of a minimum of $6.90 in operating earnings per share "assuming a reasonable level of large losses during the fourth quarter."

PartnerRe is continuing the share repurchase program initiated during the second quarter of 2004. As of September 30, 2004, the Company repurchased 711,400 shares, bringing the total number of shares repurchased for the year-to-date to 874,700.

PartnerRe's Board of Directors also declared a regular quarterly dividend of $0.34 per common share. The dividend will be payable on December 1, 2004, to common shareholders of record on November 19, 2004, with the stock trading ex-dividend commencing November 17, 2004.