PartnerRe last night reported better-than-expected earnings, with a first-quarter profit of $360.1 million on strong underwriting results and investment gains.The Bermuda-based reinsurer’s net income of $5.24 per share for the first quarter of 2012 compares to a loss for the first quarter of 2011 of $807 million, or $11.99 per share, including net after-tax realised and unrealised losses on investments of $88.4 million, or $1.30 per share.The profit included net after-tax realised and unrealised gains on investments of $159.2 million.The company recorded operating earnings of $181.7 million, or $2.76 per share for the January to March period. This compares to an operating loss of $735.6 million, or $10.82 per share, for the first quarter of 2011.Analysts polled by Bloomberg had expected operating earnings per share of $2.01.PartnerRe president and CEO Costas Miranthis said, “We had a good first quarter with consistently strong underwriting results in all our segments, resulting in a 13 percent operating return on beginning equity.“We also had significant gains in our investment portfolio and this enabled us to grow our book value per share approximately six percent during the quarter. These results give us a good start to the year.“While the broad economic environment remains challenging, and low investment yields are likely to persist for some time, we continue to be cautiously optimistic about improving rate adequacy trends in our reinsurance markets.“The trends that we observed in the January renewals have persisted through the April renewals. In this environment, our reinsurance portfolio, with its broad diversification by line and geography, as well as our strong balance sheet, provide a solid foundation to pursue our strategic goals.”The company’s shares closed yesterday at $69.62, down 12 cents.PartnerRe said it recorded “flat” net premiums written of $1.5 billion.It saw net premiums earned of $990 million, down seven percent, or six percent on a constant foreign exchange basis, across all sub-segments within the Non-life segment primarily due to the impact of business cancelled and non-renewed in prior quarters, and the impact of lower agriculture premiums in the North America sub-segment.The reductions in net premiums earned were partially offset by an increase in the Life segment resulting from new business written in the fourth quarter of 2011.The Non-life combined ratio was 84.7 percent and included 20.6 points (or $164 million) of net favourable loss development on prior accident years. All Non-life sub-segments experienced net favourable development on prior accident years during the first quarter 2012.The company said net investment income was down three percent to $147 million primarily reflecting lower reinvestment rates, which was partially offset by cash inflows.Pre-tax net realised and unrealised investment gains were $193 million and primarily related to gains on equity securities and gains on fixed income securities due to narrowing credit spreads.The effective tax rate on operating earnings and non-operating earnings was 15 percent and 16 percent, respectively.PartnerRe said total investments, cash and funds held and directly managed at March 31 were up two percent at $18.2 billion compared to December 31, 2011.Total shareholders’ equity was $6.8 billion at March 31 compared to $6.5 billion at December 31, 2011.Book value per common share at March 31 was $89.63 on a fully diluted basis compared to $84.42 per diluted share at December 31, 2011.PartnerRe said investment and capital markets activities contributed income of $327 million to pre-tax net income, excluding investment income allocated to the Life segment.The board of directors declared a quarterly dividend of 62 cents per common share payable on June 1, 2012, to common shareholders of record on May 21, 2012.