Exhibit 99.2

 

 

PartnerRe Ltd.

Financial Supplement

Financial Information

as at December 31, 2013

(unaudited)

The following financial supplement is provided to assist in your understanding of

PartnerRe Ltd.

This report is for information purposes only. It should be read in conjunction with

documents filed with the SEC by PartnerRe Ltd., including the Company’s Annual

Report on Form 10-K and Quarterly Reports on Form 10-Q.

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PartnerRe Ltd.

Financial Supplement - December 31, 2013

Table of Contents

 

		Page
Regulation G and Basis of Presentation
Consolidated Financial Statements
Consolidated Statements of Operations			1
Condensed Consolidated Balance Sheets			2
Condensed Consolidated Statements of Cash Flows			3
Consolidated Statements of Comprehensive Income (Loss)			4
Segment Information
For the three months ended December 31, 2013 and 2012			5-6
For the year ended December 31, 2013 and 2012			7-8
Non-life segment			9
North America sub-segment			10
Global (Non-U.S.) P&C sub-segment			11
Global Specialty sub-segment			12
Catastrophe sub-segment			13
Life and Health segment			14
Corporate and Other			15
Distribution of Premiums
Distribution of Premiums by line of business, geography and production source			16
Distribution of Premiums by reinsurance type			17
Investments
Investment Portfolio			18
Distribution of Corporate Bonds			19
Distribution of Equities			20
Distribution of Mortgage/Asset-Backed Securities			21
Other Invested Assets including Private Markets and Derivative Exposures			22
Funds Held - Directly Managed Portfolio			23
Distribution of Corporate Bonds - Funds Held - Directly Managed Portfolio			24
Composition of Net Investment Income and Net Realized and Unrealized Investment Gains (Losses)			25
Composition of Net Investment Income and Net Realized and Unrealized Investment (Losses) Gains on Funds Held - Directly Managed Portfolio			26
Loss Reserves
Analysis of Unpaid Losses and Loss Expenses			27
Analysis of Policy Benefits for Life and Annuity Contracts			28
Reserve Development			29
Natural Catastrophe Probable Maximum Losses (PMLs)			30
Reconciliation of GAAP and non-GAAP measures			31-33
Diluted Book Value per Common Share - Treasury Stock Method			34
Diluted Book Value and Diluted Tangible Book Value per Common Share - Rollforward			35-36

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PartnerRe Ltd.

Regulation G

In addition to the GAAP financial measures set forth in this Financial Supplement, the Company has also included certain non-GAAP financial measures within the meaning of Regulation G. Management believes that these non-GAAP financial measures are important to investors, analysts, rating agencies and others who use the Company’s financial information and will help provide a consistent basis for comparison between quarters and for comparison with other companies within the industry. However, investors should consider these non-GAAP measures in addition to, and not as a substitute for, measures of financial performance prepared in accordance with GAAP.

The reconciliation of non-GAAP financial measures to the most comparable GAAP financial measures in accordance with Regulation G is included within the relevant tables.

Operating Earnings (Loss) available to PartnerRe Common Shareholders (Operating Earnings (Loss)), Diluted Operating Earnings (Loss) per Common Share and Annualized Operating Return on Beginning Diluted Book Value per Common Share and Common Share Equivalents Outstanding (Annualized Operating ROE): The Company uses Operating Earnings (Loss), Diluted Operating Earnings (Loss) per Common Share and Annualized Operating ROE to measure performance, as these measures focus on the underlying fundamentals of the Company’s operations. Operating Earnings (Loss) exclude the impact of net realized and unrealized gains and losses on investments, net of tax (except where the Company has made a strategic investment in an insurance or reinsurance related investee), net foreign exchange gains and losses, net of tax, loss on redemption of preferred shares and the interest in earnings (losses) of equity investments, net of tax (except where the Company has made a strategic investment in an insurance or reinsurance related investee and where the Company does not control the investee’s activities), and are calculated after preferred dividends. The Company calculates Diluted Operating Earnings (Loss) per Common Share using Operating Earnings (Loss) for the period divided by the weighted average number of PartnerRe common shares and common share equivalents outstanding. The Company calculates Annualized Operating ROE using annualized Diluted Operating Earnings (Loss) per Common Share for the period divided by the Diluted Book Value per PartnerRe common share and common share equivalents outstanding as of the beginning of the year. Operating Earnings (Loss) and Diluted Operating Earnings (Loss) per Common Share should not be viewed as a substitute for Net Income (Loss) or Diluted Net Income (Loss) per Common Share prepared in accordance with GAAP. Annualized Operating ROE supplements GAAP information.

Tangible Book Value and Diluted Tangible Book Value per PartnerRe Common Share and Common Share Equivalents Outstanding: The Company calculates Tangible Book Value using common shareholders’ equity attributable to PartnerRe less goodwill and intangible assets, net of tax. The Company calculates Diluted Tangible Book Value per Common Share using Tangible Book Value divided by the weighted average number of PartnerRe common shares and common share equivalents outstanding. The Company uses these measures as the basis for its prime measure of long-term financial performance (annualized growth in Diluted Tangible Book Value per Common Share plus dividends). Management believes annualized growth in Diluted Tangible Book Value per Common Share plus dividends aligns the Company’s stated long-term objectives with the measure most investors use to evaluate total shareholder value creation given that it focuses on the tangible value of total shareholder returns, excluding the impact of goodwill and intangibles.

Book Value and Tangible Book Value excluding Net Unrealized Gains and Losses on Fixed Income Securities and Funds Held - Directly Managed, Net of Tax (Book Value and Tangible Book Value excluding NURGL) and Diluted Book Value and Diluted Tangible Book Value per PartnerRe Common Share and Common Share Equivalents Outstanding (Diluted Book Value and Diluted Tangible Book Value per Common Share) excluding Net Unrealized Gains and Losses on Fixed Income Securities and Funds Held - Directly Managed, Net of Tax (Diluted Book Value and Diluted Tangible Book Value per Common Share excluding NURGL): The Company calculates Book Value and Tangible Book Value excluding NURGL using common shareholders’ equity attributable to PartnerRe and Tangible Book Value, respectively, less net unrealized gains and losses on fixed income securities and funds held - directly managed, net of tax. Book Value and Tangible Book Value excluding NURGL focuses on the underlying fundamentals of the Company’s financial position without the impact of interest rates and credit spreads on the unrealized gains and losses on fixed income securities and funds held - directly managed, net of tax. The Company calculates Diluted Book Value and Diluted Tangible Book Value per Common Share excluding NURGL divided by the weighted average number of common shares and common share equivalents outstanding.

Total Capital: The Company calculates Total Capital as the sum of common shareholders’ equity attributable to PartnerRe, preferred shares, long-term debt, senior notes and capital efficient notes. The Company uses Total Capital as a measure to manage the capital structure of the Company.

Basis of Presentation: The Company’s financial position and its results include Presidio from the date of acquisition of December 31, 2012 and for all periods thereafter.

All references to per share data, per common share data, common shares and common share equivalent data, and common shareholders’ equity data throughout this Financial Supplement relates to PartnerRe Ltd.’s (PartnerRe) common shareholders.

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PartnerRe Ltd.

Consolidated Statements of Operations

(Expressed in thousands of U.S. dollars, except share and per share data)

(Unaudited)

 

		For the three months ended																						For the year ended
		December 31, 2013				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2013				December 31, 2012
Revenues
Gross premiums written		$	1,190,761			$	1,281,477			$	1,340,582			$	1,756,886			$	931,434					$	5,569,706			$	4,718,235
Net premiums written		$	1,186,002			$	1,264,775			$	1,309,318			$	1,636,431			$	920,288					$	5,396,526			$	4,572,860
Decrease (increase) in unearned premiums			235,422				156,694				(100,682	)			(489,751	)			247,852						(198,316	)			(86,921	)
Net premiums earned			1,421,424				1,421,469				1,208,636				1,146,680				1,168,140						5,198,210				4,485,939
Net investment income			114,351				121,811				124,503				123,704				135,669						484,367				571,338
Net realized and unrealized investment gains (losses)			99,419				16,118				(299,215	)			22,943				5,113						(160,735	)			493,409
Other income			3,361				5,399				3,878				3,927				3,777						16,565				11,920
Total revenues			1,638,555				1,564,797				1,037,802				1,297,254				1,312,699						5,538,407				5,562,606
Expenses
Losses and loss expenses and life policy benefits			879,014				750,999				866,843				660,952				800,851						3,157,808				2,804,610
Acquisition costs			318,738				282,948				241,743				234,200				245,520						1,077,628				936,909
Other operating expenses (1)			131,125				108,467				144,833				116,040				112,319						500,466				411,374
Interest expense			12,236				12,233				12,232				12,229				12,227						48,929				48,895
Amortization of intangible assets			6,044				7,045				7,045				7,046				5,120						27,180				31,799
Net foreign exchange losses (gains)			8,382				1,279				10,584				(2,043	)			3,341						18,203				175
Total expenses			1,355,539				1,162,971				1,283,280				1,028,424				1,179,378						4,830,214				4,233,762
Income (loss) before taxes and interest in earnings (losses) of equity investments			283,016				401,826				(245,478	)			268,830				133,321						708,193				1,328,844
Income tax expense (benefit)			11,078				70,232				(74,569	)			41,675				22,826						48,416				204,284
Interest in earnings (losses) of equity investments			3,988				5,941				(3,479	)			7,215				1,026						13,665				9,954
Net income (loss)			275,926				337,535				(174,388	)			234,370				111,521						673,442				1,134,514
Net income attributable to noncontrolling interests			(4,138	)			(4,112	)			(1,183	)			—				—						(9,434	)			—
Net income (loss) attributable to PartnerRe			271,788				333,423				(175,571	)			234,370				111,521						664,008				1,134,514
Preferred dividends			14,184				14,184				14,796				14,699				15,405						57,861				61,622
Loss on redemption of preferred shares			—				—				—				9,135				—						9,135				—
Net income (loss) attributable to PartnerRe common shareholders		$	257,604			$	319,239			$	(190,367	)		$	210,536			$	96,116					$	597,012			$	1,072,892
Operating earnings attributable to PartnerRe common shareholders		$	157,405			$	311,184			$	51,055			$	202,089			$	95,671					$	721,733			$	663,791
Comprehensive income (loss) attributable to PartnerRe		$	265,577			$	347,740			$	(187,445	)		$	215,303			$	104,603					$	641,173			$	1,157,755
Per share data attributable to PartnerRe common shareholders:
Basic operating earnings		$	2.97			$	5.80			$	0.90			$	3.46			$	1.58					$	13.03			$	10.55
Net realized and unrealized investment gains (losses), net of tax			1.73				(0.02	)			(4.07	)			0.21				(0.13	)					(2.30	)			6.23
Net foreign exchange gains (losses), net of tax			0.07				0.10				(0.10	)			(0.01	)			0.12						0.05				0.13
Loss on redemption of preferred shares			—				—				—				(0.16	)			—						(0.16	)			—
Interest in earnings (losses) of equity investments, net of tax			0.09				0.07				(0.10	)			0.10				0.01						0.16				0.14
Basic net income (loss)		$	4.86			$	5.95			$	(3.37	)		$	3.60			$	1.58					$	10.78			$	17.05
Weighted average number of common shares outstanding			53,013,136				53,671,245				56,485,882				58,423,898				60,643,216						55,378,980				62,915,992
Diluted operating earnings (1)		$	2.91			$	5.70			$	0.90			$	3.39			$	1.55					$	12.79			$	10.43
Net realized and unrealized investment gains (losses), net of tax			1.70				(0.03	)			(4.07	)			0.20				(0.12	)					(2.25	)			6.17
Net foreign exchange gains (losses), net of tax			0.07				0.10				(0.10	)			(0.01	)			0.12						0.04				0.13
Loss on redemption of preferred shares			—				—				—				(0.15	)			—						(0.16	)			—
Interest in earnings (losses) of equity investments, net of tax			0.08				0.07				(0.10	)			0.10				0.01						0.16				0.14
Diluted net income (loss)		$	4.76			$	5.84			$	(3.37	)		$	3.53			$	1.56					$	10.58			$	16.87
Weighted average number of common shares and common share equivalents outstanding			54,165,736				54,625,151				56,485,882				59,590,044				61,627,207						56,448,105				63,615,748
Dividends declared per common share		$	0.64			$	0.64			$	0.64			$	0.64			$	0.62					$	2.56			$	2.48

 

(1)	Includes an expense related to the restructuring of the Company’s business support operations and Global Non-life operations. See page 15 for the expense and per share impacts.

 

1

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PartnerRe Ltd.

Condensed Consolidated Balance Sheets

(Expressed in thousands of U.S. dollars, except share and per share data)

(Unaudited)

 

		December 31, 2013								September 30, 2013								June 30, 2013								March 31, 2013								December 31, 2012										December 31, 2011
Assets
Total investments		$	15,148,883							$	15,107,800							$	14,968,652							$	15,544,844							$	15,973,230									$	15,287,245
Funds held - directly managed			785,768								813,497								842,415								909,520								930,741										1,268,010
Cash and cash equivalents			1,496,485								1,551,062								1,261,540								1,286,898								1,121,705										1,342,257
Accrued investment income			185,717								175,164								172,794								181,151								184,315										189,074
Reinsurance balances receivable			2,465,713								2,564,015								2,477,340								2,393,159								1,991,991										2,059,976
Reinsurance recoverable on paid and unpaid losses			308,892								339,169								356,011								400,509								348,086										397,788
Funds held by reinsured companies			843,081								831,704								782,992								775,486								805,489										796,290
Deferred acquisition costs			644,952								680,972								676,084								646,178								568,391										547,202
Goodwill			456,380								456,380								456,380								456,380								456,380										455,533
Intangible assets			187,090								193,134								200,179								207,224								214,270										133,867
Other assets			515,334								425,310								376,193								338,264								385,834										378,131
Total assets		$	23,038,295							$	23,138,207							$	22,570,580							$	23,139,613							$	22,980,432									$	22,855,373
Liabilities
Unpaid losses and loss expenses		$	10,646,318							$	10,564,542							$	10,336,368							$	10,323,786							$	10,709,371									$	11,273,091
Policy benefits for life and annuity contracts			1,974,133								1,908,575								1,799,332								1,763,413								1,813,244										1,645,662
Unearned premiums			1,723,767								1,997,853								2,162,112								2,074,370								1,534,625										1,448,841
Other reinsurance balances payable			202,549								232,711								244,583								342,423								238,578										443,873
Debt obligations			820,989								820,989								820,989								820,989								820,989										820,989
Other liabilities			904,380								989,361								791,920								867,074								930,129										755,375
Total liabilities			16,272,136								16,514,031								16,155,304								16,192,055								16,046,936										16,387,831
Total shareholders’ equity attributable to PartnerRe			6,709,532								6,571,687								6,366,957								6,910,714								6,933,496										6,467,542
Noncontrolling interests			56,627								52,489								48,319								36,844								—										—
Total shareholders’ equity			6,766,159								6,624,176								6,415,276								6,947,558								6,933,496										6,467,542
Total liabilities and shareholders’ equity		$	23,038,295							$	23,138,207							$	22,570,580							$	23,139,613							$	22,980,432									$	22,855,373
Diluted Book Value Per Common Share		$	109.26							$	105.53							$	99.65							$	102.96							$	100.84									$	84.82
Diluted Tangible Book Value Per Common Share		$	98.49							$	94.86							$	89.09							$	92.91							$	90.86									$	76.47
Number of Common Shares and Common Share Equivalents Outstanding			53,596,034								54,181,672								55,325,581								58,826,334								59,893,366										65,715,708
Capital Structure:
Senior notes (1)		$	750,000				10	%		$	750,000				10	%		$	750,000				10	%		$	750,000				10	%		$	750,000				10	%				$	750,000				10	%
Capital efficient notes (2)			63,384				1				63,384				1				63,384				1				63,384				1				63,384				1						63,384				1
Preferred shares, aggregate liquidation value			853,750				11				853,750				12				853,750				12				853,750				11				893,750				11						893,750				12
Common shareholders’ equity attributable to PartnerRe			5,855,782				78				5,717,937				77				5,513,207				77				6,056,964				78				6,039,746				78						5,573,792				77
Total Capital		$	7,522,916				100	%		$	7,385,071				100	%		$	7,180,341				100	%		$	7,724,098				100	%		$	7,746,880				100	%				$	7,280,926				100	%

 

(1)	PartnerRe Finance A LLC and PartnerRe Finance B LLC, the issuers of the senior notes, do not meet U.S. GAAP consolidation requirements. Accordingly, the Company shows the related intercompany debt of $ 250.0 million and $500.0 million, respectively, on its Condensed Consolidated Balance Sheets.

(2)	PartnerRe Finance II, the issuer of the capital efficient notes, does not meet U.S. GAAP consolidation requirements. Accordingly, the Company shows the related intercompany debt of $71.0 million on its Condensed Consolidated Balance Sheets.

 

2

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PartnerRe Ltd.

Condensed Consolidated Statements of Cash Flows

(Expressed in millions of U.S. dollars)

(Unaudited)

 

		For the three months ended																						For the year ended
		December 31, 2013				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2013				December 31, 2012
Net cash provided by operating activities:
Underwriting operations		$	133			$	201			$	8			$	(4	)		$	91					$	337			$	100
Investment income			138				161				173				166				165						637				717
Taxes and foreign exchange			(27	)			(9	)			(65	)			(47	)			(32	)					(147	)			(124	)
Net cash provided by operating activities		$	244			$	353			$	116			$	115			$	224					$	827			$	693
Net cash provided by operating activities		$	244			$	353			$	116			$	115			$	224					$	827			$	693
Net cash (used in) provided by investing activities			(167	)			95				200				289				(208	)					418				(219	)
Net cash used in financing activities			(130	)			(169	)			(342	)			(224	)			(231	)					(866	)			(688	)
Effect of foreign exchange rate changes on cash			(2	)			10				1				(15	)			1						(5	)			(6	)
(Decrease) increase in cash and cash equivalents			(55	)			289				(25	)			165				(214	)					374				(220	)
Cash and cash equivalents - beginning of period			1,551				1,262				1,287				1,122				1,336						1,122				1,342
Cash and cash equivalents - end of period		$	1,496			$	1,551			$	1,262			$	1,287			$	1,122					$	1,496			$	1,122

 

3

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PartnerRe Ltd.

Consolidated Statements of Comprehensive Income (Loss)

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

		For the three months ended
		December 31, 2013				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012
Net income (loss) attributable to PartnerRe		$	271,788			$	333,423			$	(175,571	)		$	234,370			$	111,521
Change in currency translation adjustment			(14,866	)			14,432				(11,514	)			(19,830	)			(2,554	)
Change in net unrealized gains or losses on investments, net of tax			(226	)			(229	)			(230	)			(233	)			(235	)
Change in unfunded pension obligation, net of tax			8,881				114				(130	)			996				(4,129	)
Comprehensive income (loss) attributable to PartnerRe		$	265,577			$	347,740			$	(187,445	)		$	215,303			$	104,603

 

		For the year ended
		December 31, 2013				December 31, 2012
Net income attributable to PartnerRe		$	664,008			$	1,134,514
Change in currency translation adjustment			(31,778	)			28,488
Change in net unrealized gains or losses on investments, net of tax			(918	)			(953	)
Change in unfunded pension obligation, net of tax			9,861				(4,294	)
Comprehensive income attributable to PartnerRe		$	641,173			$	1,157,755

 

4

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PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

 

						For the three months ended December 31, 2013
		North America				Global (Non-U.S.) P&C				Global Specialty				Catastrophe				Total Non- life  segment				Life  and Health segment				Corporate and Other				Total
Gross premiums written		$	372			$	128			$	423			$	18			$	941			$	250			$	—			$	1,191
Net premiums written		$	372			$	128			$	419			$	18			$	937			$	249			$	—			$	1,186
Decrease (increase) in unearned premiums			45				85				(4	)			99				225				9				1				235
Net premiums earned		$	417			$	213			$	415			$	117			$	1,162			$	258			$	1			$	1,421
Losses and loss expenses and life policy benefits			(293	)			(110	)			(223	)			(51	)			(677	)			(202	)			—				(879	)
Acquisition costs			(98	)			(62	)			(105	)			(11	)			(276	)			(42	)			—				(318	)
Technical result		$	26			$	41			$	87			$	55			$	209			$	14			$	1			$	224
Other income																			—				3				—				3
Other operating expenses																			(70	)			(19	)			(42	)			(131	)
Underwriting result																		$	139			$	(2	)			n/a			$	96
Net investment income																							15				99				114
Allocated underwriting result (1)																						$	13				n/a				n/a
Net realized and unrealized investment gains																											99				99
Interest expense																											(12	)			(12	)
Amortization of intangible assets																											(6	)			(6	)
Net foreign exchange losses																											(8	)			(8	)
Income tax expense																											(11	)			(11	)
Interest in earnings of equity investments																											4				4
Net income																											n/a			$	276
Loss ratio (2)			70.2	%			51.5	%			53.8	%			43.2	%			58.2	%
Acquisition ratio (3)			23.5				29.4				25.2				9.5				23.8
Technical ratio (4)			93.7	%			80.9	%			79.0	%			52.7	%			82.0	%
Other operating expense ratio (5)																			6.0
Combined ratio (6)																			88.0	%

 

(1)	Allocated underwriting result is defined as net premiums earned, other income or loss and allocated net investment income less life policy benefits, acquisition costs and other operating expenses.

(2)	Loss ratio is obtained by dividing losses and loss expenses by net premiums earned.

(3)	Acquisition ratio is obtained by dividing acquisition costs by net premiums earned.

(4)	Technical ratio is defined as the sum of the loss ratio and the acquisition ratio.

(5)	Other operating expense ratio is obtained by dividing other operating expenses by net premiums earned.

(6)	Combined ratio is defined as the sum of the technical ratio and the other operating expense ratio.

 

5

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

 

						For the three months ended December 31, 2012
		North America				Global (Non-U.S.) P&C				Global Specialty				Catastrophe				Total Non- life  segment				Life  and Health segment				Corporate and Other				Total
Gross premiums written		$	297			$	85			$	327			$	24			$	733			$	198			$	—			$	931
Net premiums written		$	297			$	85			$	316			$	25			$	723			$	197			$	—			$	920
Decrease in unearned premiums			16				98				23				101				238				8				2				248
Net premiums earned		$	313			$	183			$	339			$	126			$	961			$	205			$	2			$	1,168
Losses and loss expenses and life policy benefits			(248	)			(88	)			(252	)			(45	)			(633	)			(168	)			—				(801	)
Acquisition costs			(73	)			(47	)			(80	)			(12	)			(212	)			(33	)			—				(245	)
Technical result		$	(8	)		$	48			$	7			$	69			$	116			$	4			$	2			$	122
Other income																			2				1				—				3
Other operating expenses																			(70	)			(15	)			(27	)			(112	)
Underwriting result																		$	48			$	(10	)			n/a			$	13
Net investment income																							15				121				136
Allocated underwriting result (1)																						$	5				n/a				n/a
Net realized and unrealized investment gains																											5				5
Interest expense																											(12	)			(12	)
Amortization of intangible assets																											(5	)			(5	)
Net foreign exchange losses																											(3	)			(3	)
Income tax expense																											(23	)			(23	)
Interest in earnings of equity investments																											1				1
Net income																											n/a			$	112
Loss ratio (2)			79.2	%			48.5	%			74.3	%			35.6	%			65.9	%
Acquisition ratio (3)			23.2				25.6				23.5				9.8				22.0
Technical ratio (4)			102.4	%			74.1	%			97.8	%			45.4	%			87.9	%
Other operating expense ratio (5)																			7.4
Combined ratio (6)																			95.3	%

 

6

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

 

						For the year ended December 31, 2013
		North America				Global (Non-U.S.) P&C				Global Specialty				Catastrophe				Total Non- life  segment				Life  and Health segment				Corporate and Other				Total
Gross premiums written		$	1,601			$	818			$	1,676			$	495			$	4,590			$	972			$	8			$	5,570
Net premiums written		$	1,587			$	811			$	1,579			$	450			$	4,427			$	964			$	6			$	5,397
(Increase) decrease in unearned premiums			(54	)			(68	)			(73	)			3				(192	)			(7	)			—				(199	)
Net premiums earned		$	1,533			$	743			$	1,506			$	453			$	4,235			$	957			$	6			$	5,198
Losses and loss expenses and life policy benefits			(975	)			(373	)			(920	)			(132	)			(2,400	)			(760	)			2				(3,158	)
Acquisition costs			(351	)			(196	)			(362	)			(44	)			(953	)			(125	)			—				(1,078	)
Technical result		$	207			$	174			$	224			$	277			$	882			$	72			$	8			$	962
Other income																			3				11				3				17
Other operating expenses																			(259	)			(71	)			(170	)			(500	)
Underwriting result																		$	626			$	12				n/a			$	479
Net investment income																							61				423				484
Allocated underwriting result (1)																						$	73				n/a				n/a
Net realized and unrealized investment losses																											(161	)			(161	)
Interest expense																											(49	)			(49	)
Amortization of intangible assets																											(27	)			(27	)
Net foreign exchange losses																											(18	)			(18	)
Income tax expense																											(49	)			(49	)
Interest in earnings of equity investments																											14				14
Net income																											n/a			$	673
Loss ratio (2)			63.6	%			50.2	%			61.1	%			29.0	%			56.7	%
Acquisition ratio (3)			22.9				26.4				24.0				9.7				22.5
Technical ratio (4)			86.5	%			76.6	%			85.1	%			38.7	%			79.2	%
Other operating expense ratio (5)																			6.1
Combined ratio (6)																			85.3	%

 

7

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

 

						For the year ended December 31, 2012
		North America				Global (Non-U.S.) P&C				Global Specialty				Catastrophe				Total Non- life  segment				Life  and Health segment				Corporate and Other				Total
Gross premiums written		$	1,221			$	684			$	1,505			$	500			$	3,910			$	802			$	6			$	4,718
Net premiums written		$	1,219			$	681			$	1,415			$	453			$	3,768			$	799			$	6			$	4,573
(Increase) decrease in unearned premiums			(43	)			(3	)			(42	)			4				(84	)			(4	)			1				(87	)
Net premiums earned		$	1,176			$	678			$	1,373			$	457			$	3,684			$	795			$	7			$	4,486
Losses and loss expenses and life policy benefits			(816	)			(415	)			(821	)			(103	)			(2,155	)			(647	)			(3	)			(2,805	)
Acquisition costs			(291	)			(167	)			(321	)			(42	)			(821	)			(116	)			—				(937	)
Technical result		$	69			$	96			$	231			$	312			$	708			$	32			$	4			$	744
Other income																			5				4				3				12
Other operating expenses																			(257	)			(52	)			(102	)			(411	)
Underwriting result																		$	456			$	(16	)			n/a			$	345
Net investment income																							64				507				571
Allocated underwriting result (1)																						$	48				n/a				n/a
Net realized and unrealized investment gains																											494				494
Interest expense																											(49	)			(49	)
Amortization of intangible assets																											(32	)			(32	)
Net foreign exchange losses																											—				—
Income tax expense																											(204	)			(204	)
Interest in earnings of equity investments																											10				10
Net income																											n/a			$	1,135
Loss ratio (2)			69.4	%			61.3	%			59.8	%			22.4	%			58.5	%
Acquisition ratio (3)			24.7				24.6				23.4				9.3				22.3
Technical ratio (4)			94.1	%			85.9	%			83.2	%			31.7	%			80.8	%
Other operating expense ratio (5)																			7.0
Combined ratio (6)																			87.8	%

 

8

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

Non-life segment

 

		For the three months ended																						For the year ended
		December 31, 2013 (A)				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2013 (A)				December 31, 2012
Gross premiums written		$	941			$	1,041			$	1,106			$	1,502			$	733					$	4,590			$	3,910
Net premiums written		$	937			$	1,026			$	1,076			$	1,386			$	723					$	4,427			$	3,768
Net premiums earned		$	1,162			$	1,173			$	977			$	923			$	961					$	4,235			$	3,684
Losses and loss expenses			(677	)			(557	)			(686	)			(480	)			(633	)					(2,400	)			(2,155	)
Acquisition costs			(276	)			(259	)			(209	)			(208	)			(212	)					(953	)			(821	)
Technical result		$	209			$	357			$	82			$	235			$	116					$	882			$	708
Other income			—				2				—				—				2						3				5
Other operating expenses			(70	)			(62	)			(60	)			(66	)			(70	)					(259	)			(257	)
Underwriting result		$	139			$	297			$	22			$	169			$	48					$	626			$	456
Loss ratio (2)			58.2	%			47.5	%			70.3	%			52.0	%			65.9	%					56.7	%			58.5	%
Acquisition ratio (3)			23.8				22.1				21.4				22.6				22.0						22.5				22.3
Technical ratio (4)			82.0	%			69.6	%			91.7	%			74.6	%			87.9	%					79.2	%			80.8	%
Other operating expense ratio (5)			6.0				5.3				6.1				7.1				7.4						6.1				7.0
Combined ratio (6)			88.0	%			74.9	%			97.8	%			81.7	%			95.3	%					85.3	%			87.8	%

 

(A)

Comparisons of net premiums written and net premiums earned between periods include the impact of foreign exchange variances. For the three months ended December 31, 2013, net premiums written and net premiums earned include foreign exchange impacts of $(2.5) million and $(1.3) million, respectively, compared to the three months ended December 31, 2012. For the year ended December 31, 2013, net premiums written and net premiums earned include foreign exchange impacts of $(6.2) million and $(4.3) million, respectively, compared to the year ended December 31, 2012.

 

9

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

North America sub-segment

 

		For the three months ended																						For the year ended
		December 31, 2013 (A)				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2013 (A)				December 31, 2012
Gross premiums written		$	372			$	409			$	372			$	447			$	297					$	1,601			$	1,221
Net premiums written		$	372			$	408			$	360			$	446			$	297					$	1,587			$	1,219
Net premiums earned		$	417			$	425			$	357			$	333			$	313					$	1,533			$	1,176
Losses and loss expenses			(293	)			(197	)			(245	)			(240	)			(248	)					(975	)			(816	)
Acquisition costs			(98	)			(101	)			(79	)			(72	)			(73	)					(351	)			(291	)
Technical result		$	26			$	127			$	33			$	21			$	(8	)				$	207			$	69
Loss ratio (2)			70.2	%			46.3	%			68.6	%			72.0	%			79.2	%					63.6	%			69.4	%
Acquisition ratio (3)			23.5				23.9				22.1				21.6				23.2						22.9				24.7
Technical ratio (4)			93.7	%			70.2	%			90.7	%			93.6	%			102.4	%					86.5	%			94.1	%
Distribution of Net Premiums Written by Major Lines of Business:
Agriculture			40	%			31	%			28	%			23	%			25	%					30	%			19	%
Casualty			33				37				38				40				43						37				43
Credit/Surety			3				2				4				2				4						3				4
Motor			4				3				4				4				3						4				4
Multiline			5				4				5				10				7						6				7
Other			2				9				4				5				4						5				3
Property			13				14				17				16				14						15				20
Total			100	%			100	%			100	%			100	%			100	%					100	%			100	%

 

(A)

Comparisons of net premiums written and net premiums earned between periods include the impact of foreign exchange variances. For the three months ended December 31, 2013, net premiums written and net premiums earned include foreign exchange impacts of $(0.6) million and $(1.1) million, respectively, compared to the three months ended December 31, 2012. For the year ended December 31, 2013, net premiums written and net premiums earned include foreign exchange impacts of $(0.3) million and $(1.5) million, respectively, compared to the year ended December 31, 2012.

 

10

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

Global (Non-U.S.) P&C sub-segment

 

		For the three months ended																						For the year ended
		December 31, 2013 (A)				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2013 (A)				December 31, 2012
Gross premiums written		$	128			$	157			$	160			$	372			$	85					$	818			$	684
Net premiums written		$	128			$	157			$	158			$	368			$	85					$	811			$	681
Net premiums earned		$	213			$	195			$	169			$	166			$	183					$	743			$	678
Losses and loss expenses			(110	)			(90	)			(106	)			(67	)			(88	)					(373	)			(415	)
Acquisition costs			(62	)			(50	)			(34	)			(50	)			(47	)					(196	)			(167	)
Technical result		$	41			$	55			$	29			$	49			$	48					$	174			$	96
Loss ratio (2)			51.5	%			46.0	%			62.9	%			40.4	%			48.5	%					50.2	%			61.3	%
Acquisition ratio (3)			29.4				25.7				19.9				30.1				25.6						26.4				24.6
Technical ratio (4)			80.9	%			71.7	%			82.8	%			70.5	%			74.1	%					76.6	%			85.9	%
Distribution of Net Premiums Written by Major Lines of Business:
Casualty			5	%			9	%			10	%			10	%			14	%					9	%			11	%
Motor			54				35				34				34				32						37				28
Property			41				56				56				56				54						54				61
Total			100	%			100	%			100	%			100	%			100	%					100	%			100	%

 

(A)

Comparisons of net premiums written and net premiums earned between periods include the impact of foreign exchange variances. For the three months ended December 31, 2013, net premiums written and net premiums earned include foreign exchange impacts of $(2.1) million and $0.6 million, respectively, compared to the three months ended December 31, 2012. For the year ended December 31, 2013, net premiums written and net premiums earned include foreign exchange impacts of $(2.4) million and $1.2 million, respectively, compared to the year ended December 31, 2012.

 

11

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

Global Specialty sub-segment

 

		For the three months ended																						For the year ended
		December 31, 2013 (A)				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2013 (A)				December 31, 2012
Gross premiums written		$	423			$	396			$	413			$	445			$	327					$	1,676			$	1,505
Net premiums written		$	419			$	389			$	409			$	361			$	316					$	1,579			$	1,415
Net premiums earned		$	415			$	382			$	372			$	337			$	339					$	1,506			$	1,373
Losses and loss expenses			(223	)			(228	)			(284	)			(184	)			(252	)					(920	)			(821	)
Acquisition costs			(105	)			(92	)			(90	)			(75	)			(80	)					(362	)			(321	)
Technical result		$	87			$	62			$	(2	)		$	78			$	7					$	224			$	231
Loss ratio (2)			53.8	%			59.8	%			76.6	%			54.6	%			74.3	%					61.1	%			59.8	%
Acquisition ratio (3)			25.2				24.0				24.1				22.4				23.5						24.0				23.4
Technical ratio (4)			79.0	%			83.8	%			100.7	%			77.0	%			97.8	%					85.1	%			83.2	%
Distribution of Net Premiums Written by Major Lines of Business:
Agriculture			8	%			6	%			11	%			10	%			3	%					9	%			6	%
Aviation/Space			16				13				12				10				20						13				15
Credit/Surety			17				19				18				21				21						19				19
Energy			5				6				6				4				7						5				7
Engineering			16				14				14				12				14						14				12
Marine			19				19				19				20				20						19				22
Other			3				3				3				3				—						3				—
Specialty casualty			8				8				6				14				1						9				7
Specialty property			8				12				11				6				14						9				12
Total			100	%			100	%			100	%			100	%			100	%					100	%			100	%

 

(A)

Comparisons of net premiums written and net premiums earned between periods include the impact of foreign exchange variances. For the three months ended December 31, 2013, net premiums written and net premiums earned include foreign exchange impacts of $0.8 million and $2.2 million, respectively, compared to the three months ended December 31, 2012. For the year ended December 31, 2013, net premiums written and net premiums earned include foreign exchange impacts of $4.3 million and $4.7 million, respectively, compared to the year ended December 31, 2012.

 

12

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

Catastrophe sub-segment

 

		For the three months ended																						For the year ended
		December 31, 2013 (A)				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2013 (A)				December 31, 2012
Gross premiums written		$	18			$	79			$	161			$	238			$	24					$	495			$	500
Net premiums written		$	18			$	72			$	149			$	211			$	25					$	450			$	453
Net premiums earned		$	117			$	171			$	79			$	87			$	126					$	453			$	457
Losses and loss expenses			(51	)			(42	)			(51	)			11				(45	)					(132	)			(103	)
Acquisition costs			(11	)			(16	)			(6	)			(11	)			(12	)					(44	)			(42	)
Technical result		$	55			$	113			$	22			$	87			$	69					$	277			$	312
Loss ratio (2)			43.2	%			24.5	%			64.1	%			(12.8	)%			35.6	%					29.0	%			22.4	%
Acquisition ratio (3)			9.5				9.0				8.5				12.3				9.8						9.7				9.3
Technical ratio (4)			52.7	%			33.5	%			72.6	%			(0.5	)%			45.4	%					38.7	%			31.7	%

 

(A)

Comparisons of net premiums written and net premiums earned between periods include the impact of foreign exchange variances. For the three months ended December 31, 2013, net premiums written and net premiums earned include foreign exchange impacts of $(0.6) million and $(3.0) million, respectively, compared to the three months ended December 31, 2012. For the year ended December 31, 2013, net premiums written and net premiums earned include foreign exchange impacts of $(7.8) million and $(8.8) million, respectively, compared to the year ended December 31, 2012.

 

13

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

Life and Health segment

 

		For the three months ended																						For the year ended
		December 31, 2013 (A)				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2013 (A)				December 31, 2012
Gross premiums written		$	250			$	235			$	233			$	254			$	198					$	972			$	802
Net premiums written		$	249			$	234			$	232			$	249			$	197					$	964			$	799
Net premiums earned		$	258			$	243			$	232			$	224			$	205					$	957			$	795
Life policy benefits			(202	)			(195	)			(181	)			(182	)			(168	)					(760	)			(647	)
Acquisition costs			(42	)			(24	)			(33	)			(27	)			(33	)					(125	)			(116	)
Technical result		$	14			$	24			$	18			$	15			$	4					$	72			$	32
Other income			3				3				3				3				1						11				4
Other operating expenses			(19	)			(17	)			(17	)			(18	)			(15	)					(71	)			(52	)
Underwriting result		$	(2	)		$	10			$	4			$	—			$	(10	)				$	12			$	(16	)
Net investment income			15				15				15				16				15						61				64
Allocated underwriting result (1)		$	13			$	25			$	19			$	16			$	5					$	73			$	48
Distribution of Net Premiums Written by Major Lines of Business:
Accident and Health			15	%			17	%			14	%			12	%			2	%					15	%			3	%
Longevity			27				26				26				25				32						26				31
Mortality			58				57				60				63				66						59				66
Total			100	%			100	%			100	%			100	%			100	%					100	%			100	%

 

(A)

Comparisons of net premiums written and net premiums earned between periods include the impact of foreign exchange variances. For the three months ended December 31, 2013, net premiums written and net premiums earned include foreign exchange impacts of $1.5 million and $1.9 million, respectively, compared to the three months ended December 31, 2012. For the year ended December 31, 2013, net premiums written and net premiums earned include foreign exchange impacts of $4.5 million and $4.9 million, respectively, compared to the year ended December 31, 2012.

 

14

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

Corporate and Other

 

		For the three months ended																						For the year ended
		December 31, 2013				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2013				December 31, 2012
Technical result		$	1			$	6			$	—			$	1			$	2					$	8			$	4
Other income			—				—				1				1				—						3				3
Corporate expenses - costs of restructuring (1)			(12	)			(2	)			(43	)			—				—						(58	)			—
Corporate expenses			(28	)			(25	)			(23	)			(30	)			(24	)					(105	)			(88	)
Other operating expenses			(2	)			(2	)			(2	)			(2	)			(3	)					(7	)			(14	)
Net investment income			99				107				110				108				121						423				507
Net realized and unrealized investment gains (losses)			99				16				(299	)			23				5						(161	)			494
Interest expense			(12	)			(12	)			(12	)			(12	)			(12	)					(49	)			(49	)
Amortization of intangible assets			(6	)			(7	)			(7	)			(7	)			(5	)					(27	)			(32	)
Net foreign exchange (losses) gains			(8	)			(1	)			(11	)			2				(3	)					(18	)			—
Income tax (expense) benefit			(11	)			(70	)			75				(42	)			(23	)					(49	)			(204	)
Interest in earnings (losses) of equity investments			4				6				(4	)			7				1						14				10

 

(1)

The costs of restructuring relate to the Company’s reorganization of its business support and Global Non-life operations. During the three months ended December 31, 2013, these costs predominantly comprised of facility exit costs, while during the three months ended September 30, 2013 and the three months ended June 30, 2013, these costs predominantly comprised of severance costs related to the Company’s voluntary and involuntary termination plans. During the year ended December 31, 2013, these costs predominantly consisted of severance costs related to the Company’s voluntary and involuntary termination plans, and to a lesser extent, facility exit costs.

For the three months ended December 31, 2013, three months ended September 30, 2013, three months ended June 30, 2013 and the year ended December 31, 2013, these costs had a per diluted share impact, pre-tax, of $0.22, $0.04, $0.77, and $1.03, respectively.

 

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PartnerRe Ltd.

Distribution of Premiums

(Unaudited)

 

		For the three months ended																						For the year ended
		December 31, 2013				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2013				December 31, 2012
Distribution of Net Premiums Written by Line of Business:
Non-life
Property and casualty
Casualty			11	%			13	%			12	%			13	%			15	%					12	%			13	%
Motor			7				5				5				9				4						7				5
Multiline and other			3				5				3				5				3						4				3
Property			8				12				11				17				9						12				14
Specialty
Agriculture			15				12				11				8				9						11				7
Aviation/Space			6				4				4				2				7						4				5
Catastrophe			1				6				11				13				3						8				10
Credit/Surety			7				7				7				5				8						6				7
Energy			2				2				2				1				3						2				2
Engineering			6				4				4				3				5						4				4
Marine			7				6				6				5				7						6				7
Specialty casualty			3				2				2				3				1						3				2
Specialty property			3				4				4				1				5						3				4
Life and Health			21				18				18				15				21						18				17
			100	%			100	%			100	%			100	%			100	%					100	%			100	%
Distribution of Gross Premiums Written by Geography:
Asia, Australia and New Zealand			11	%			11	%			13	%			9	%			8	%					11	%			11	%
Europe			39				35				36				46				41						40				41
Latin America, Caribbean and Africa			11				12				10				9				12						10				11
North America			39				42				41				36				39						39				37
			100	%			100	%			100	%			100	%			100	%					100	%			100	%
Distribution of Gross Premiums Written by Production Source:
Broker			67	%			72	%			72	%			71	%			67	%					71	%			69	%
Direct			33				28				28				29				33						29				31
			100	%			100	%			100	%			100	%			100	%					100	%			100	%

 

16

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PartnerRe Ltd.

Distribution of Premiums

(Unaudited)

 

		For the three months ended																						For the year ended
		December 31, 2013				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2013				December 31, 2012
Distribution of Gross Premiums Written by Reinsurance Type for the Non-life sub-segment:
North America
Non-Proportional			7	%			14	%			17	%			33	%			11	%					18	%			26	%
Proportional			93				86				83				67				89						82				74
Total			100	%			100	%			100	%			100	%			100	%					100	%			100	%
Global (Non-U.S.) P&C
Non-Proportional			4	%			10	%			10	%			36	%			8	%					21	%			24	%
Proportional			96				90				90				64				92						79				76
Total			100	%			100	%			100	%			100	%			100	%					100	%			100	%
Global Specialty
Non-Proportional			11	%			16	%			18	%			31	%			9	%					19	%			20	%
Proportional			89				84				82				69				91						81				80
Total			100	%			100	%			100	%			100	%			100	%					100	%			100	%
Catastrophe
Non-Proportional			97	%			96	%			97	%			99	%			93	%					98	%			98	%
Proportional			3				4				3				1				7						2				2
Total			100	%			100	%			100	%			100	%			100	%					100	%			100	%
Non-life total
Non-Proportional			10	%			20	%			28	%			43	%			12	%					28	%			33	%
Proportional			90				80				72				57				88						72				67
Total			100	%			100	%			100	%			100	%			100	%					100	%			100	%

 

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PartnerRe Ltd.

Investment Portfolio

(Expressed in millions of U.S. dollars)

(Unaudited)

 

		December 31, 2013								September 30, 2013								June 30, 2013								March 31, 2013								December 31, 2012										December 31, 2011
Investments:
Fixed maturities
U.S. government		$	1,599				11	%		$	1,459				10	%		$	960				6	%		$	1,039				7	%		$	1,113				7	%				$	1,090				7	%
U.S. government sponsored enterprises			25				—				36				—				31				—				25				—				18				—						26				—
U.S. states, territories and municipalities			124				1				306				2				237				2				250				2				243				1						124				1
Non-U.S. sovereign government, supranational and government related			2,354				15				2,344				16				2,140				14				2,296				15				2,376				15						2,964				19
Corporates			6,049				40				6,042				40				6,246				42				6,587				42				6,656				42						5,747				38
Mortgage/asset-backed securities			3,442				23				3,494				23				3,766				25				3,773				24				3,989				25						3,991				26
Total fixed maturities			13,593				90				13,681				91				13,380				89				13,970				90				14,395				90						13,942				91
Short-term investments			14				—				37				—				29				—				115				1				151				1						42				—
Equities			1,221				8				1,122				7				1,173				8				1,149				7				1,094				7						945				6
Other invested assets			321				2				268				2				387				3				311				2				333				2						358				3
Total investments		$	15,149				100	%		$	15,108				100	%		$	14,969				100	%		$	15,545				100	%		$	15,973				100	%				$	15,287				100	%
Cash and cash equivalents			1,496								1,551								1,262								1,287								1,122										1,343
Total investments and cash		$	16,645							$	16,659							$	16,231							$	16,832							$	17,095									$	16,630
Maturity distribution:
One year or less		$	378				3	%		$	492				4	%		$	654				5	%		$	1,052				7	%		$	1,081				7	%				$	571				4	%
More than one year through five years			5,057				37				4,790				35				4,377				33				4,137				29				4,198				29						4,923				35
More than five years through ten years			3,962				29				3,883				28				3,705				27				4,184				30				4,337				30						3,713				26
More than ten years			768				6				1,059				8				907				7				939				7				941				7						786				6
Subtotal			10,165				75				10,224				75				9,643				72				10,312				73				10,557				73						9,993				71
Mortgage/asset-backed securities			3,442				25				3,494				25				3,766				28				3,773				27				3,989				27						3,991				29
Total		$	13,607				100	%		$	13,718				100	%		$	13,409				100	%		$	14,085				100	%		$	14,546				100	%				$	13,984				100	%
Credit quality by market value:
AAA			14	%							14	%							13	%							12	%							13	%									25	%
AA			41								39								40								41								42										37
A			21								22								24								25								23										21
BBB			16								16								15								15								15										11
Below Investment Grade/Unrated			8								9								8								7								7										6
			100	%							100	%							100	%							100	%							100	%									100	%
Expected average duration (1)			3.0	Yrs							2.7	Yrs							2.6	Yrs							2.9	Yrs							2.7	Yrs									2.9	Yrs
Average yield to maturity at market (1)			2.5	%							2.5	%							2.6	%							2.1	%							2.0	%									2.4	%
Average credit quality			A								A								A								A								A										AA

 

(1)	Includes funds holding fixed income securities that are classified with equities under generally accepted accounting principles in the United States.

 

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PartnerRe Ltd.

Distribution of Corporate Bonds

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

		December 31, 2013
		Fair Value				Percentage to Total Fair Value of Corporate Bonds				Percentage to Invested Assets and cash				Largest single issuer as a percentage of Invested Assets and cash
Distribution by sector - Corporate bonds
Finance		$	1,535,141				25.4	%			9.2	%			1.0	%
Consumer noncyclical			834,884				13.8				5.0				0.3
Communications			807,171				13.3				4.9				0.5
Utilities			572,170				9.5				3.4				0.2
Energy			470,625				7.8				2.8				0.4
Industrials			462,686				7.7				2.8				0.2
Consumer cyclical			371,035				6.1				2.2				0.2
Insurance			282,812				4.7				1.7				0.2
Basic materials			195,547				3.2				1.2				0.2
Government guaranteed corporate debt			174,137				2.9				1.0				0.4
Technology			121,738				2.0				0.7				0.1
Real estate investment trusts			113,697				1.9				0.7				0.1
Catastrophe bonds			67,126				1.1				0.4				0.1
Longevity and mortality bonds			25,297				0.4				0.2				0.2
Diversified			14,597				0.2				0.1				0.1
Total Corporate bonds		$	6,048,663				100.0	%			36.3	%
Finance sector - Corporate bonds
Banks		$	791,658				13.1	%			4.7	%
Investment banking and brokerage			364,716				6.0				2.2
Financial services			217,318				3.6				1.3
Commercial and consumer finance			132,372				2.2				0.8
Other			29,077				0.5				0.2
Total finance sector - Corporate bonds		$	1,535,141				25.4	%			9.2	%
		AAA				AA				A				BBB				Non-Investment Grade/Unrated				Total
Credit quality of finance sector - Corporate bonds
Banks		$	30,936			$	57,393			$	559,726			$	143,004			$	599			$	791,658
Investment banking and brokerage			—				—				332,956				30,737				1,023				364,716
Financial services			—				181,978				28,927				3,947				2,466				217,318
Commercial and consumer finance			—				5,200				30,200				96,472				500				132,372
Other			—				12,678				14,550				1,849				—				29,077
Total finance sector - Corporate bonds		$	30,936			$	257,249			$	966,359			$	276,009			$	4,588			$	1,535,141
% of total			2	%			17	%			63	%			18	%			—	%			100	%

Concentration of investment risk

The top 10 Corporate bond issuers account for 18.4% of the Company’s total corporate bonds. The single largest issuer accounts for 2.8% of the Company’s total Corporate bonds.

 

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PartnerRe Ltd.

Distribution of Equities

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

		December 31, 2013
		Fair Value				Percentage to Total Fair Value of Equities				Percentage to Invested Assets and cash				Largest single issuer as a percentage of Invested  Assets and cash
Distribution by sector - Equities
Real estate investment trusts		$	175,796				17.4	%			1.1	%			0.1	%
Energy			159,509				15.8				1.0				0.1
Insurance			144,020				14.2				0.9				0.7
Finance			138,707				13.7				0.8				0.2
Consumer noncyclical			108,663				10.7				0.6				—
Communications			72,991				7.2				0.4				0.1
Technology			61,520				6.1				0.4				0.1
Industrials			47,677				4.7				0.3				—
Consumer cyclical			45,915				4.5				0.3				—
Utilities			37,151				3.7				0.2				—
Basic materials			17,913				1.8				0.1				—
Diversified			2,080				0.2				—				—
Total equities		$	1,011,942				100.0	%			6.1	%
Mutual funds and exchange traded funds (ETFs)
Funds holding fixed income securities			184,829								1.1
Funds and ETFs holding equities			24,282								0.1
Total Equities		$	1,221,053								7.3	%

Concentration of investment risk

The single largest fund in funds and ETFs holding equities is an emerging markets fixed income fund, which accounts for 8.5% of the Company’s total equities. Excluding equity securities held in mutual funds and exchange traded funds, the top 10 common stock issuers account for 27.5% of the Company’s total equities. Excluding equity securities held in mutual funds and exchange traded funds, the single largest issuer accounts for 12.0% of the Company’s total equities.

 

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PartnerRe Ltd.

Distribution of Mortgage/Asset-Backed Securities ⁽¹⁾

(Expressed in thousands of U.S. dollars)

(Unaudited)

Fixed Maturities - Mortgage/Asset-Backed Securities by type and by rating

 

		Rating at December 31, 2013
		GNMA				GSEs				AAA				AA				A				BBB				Non-Investment Grade/Unrated				Total
U.S. Asset-Backed Securities		$	—			$	—			$	168,935			$	104,466			$	111,180			$	909			$	483,836			$	869,326
U.S. Collaterized Mortgage Obligations			—				3,011				—				—				—				—				—				3,011
U.S. Mortgage Backed Securities (MBS)			434,731				1,222,107				—				—				—				—				—				1,656,838
U.S. Commercial Mortgage Backed Securities (CMBS)			5,592				—				18,215				—				842				1,063				1,627				27,339
U.S. MBS Interest Only			46,179				69,605				4,289				—				—				—				15,928				136,001
		$	486,502			$	1,294,723			$	191,439			$	104,466			$	112,022			$	1,972			$	501,391			$	2,692,515
Non-U.S. Asset-Backed Securities		$	—			$	—			$	150,624			$	82,617			$	28,359			$	7,305			$	—			$	268,905
Non-U.S. Collaterized Mortgage Obligations			—				—				175,190				68,095				37,328				2,819				—				283,432
Non-U.S. Commercial Mortgage Backed Securities (CMBS)			—				—				8,408				—				—				—				—				8,408
Non-U.S. Mortgage Backed Securities (MBS)			—				—				189,235				—				—				—				—				189,235
		$	—			$	—			$	523,457			$	150,712			$	65,687			$	10,124			$	—			$	749,980
Total mortgage/asset-backed securities		$	486,502			$	1,294,723			$	714,896			$	255,178			$	177,709			$	12,096			$	501,391			$	3,442,495
Corporate Securities			—				25,311				—				—				—				—				—				25,311
Total		$	486,502			$	1,320,034			$	714,896			$	255,178			$	177,709			$	12,096			$	501,391			$	3,467,806
% of total			14	%			38	%			21	%			7	%			5	%			—	%			15	%			100	%

 

(1)	In addition to the mortgage/asset-backed securities above, the Company has derivatives exposure to to-be-announced mortgage-backed securities with a notional value of $183.8 million and a carrying value of ($1.3) million at December 31, 2013 within Other Invested Assets.

 

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PartnerRe Ltd.

Other Invested Assets including Private Markets and Derivative Exposures

(Expressed in thousands of U.S. dollars)

(Unaudited)

Carrying and Notional Values of Private Markets Investments and Other Invested Assets

 

		December 31, 2013																						September 30, 2013										June 30, 2013
		Investments				Fair Value of Derivatives				Carrying Value				Net Notional Amount of Derivatives / Other				Total Net Exposures (1)						Carrying Value				Total Net Exposures  (1)						Carrying Value				Total Net Exposures  (1)
Private Markets Investments
Principal Finance - Investments		$	112,636			$	—			$	112,636			$	—			$	112,636					$	112,221			$	112,221					$	123,282			$	123,282
Principal Finance - Derivative Exposure Assumed (2)			—				(931	)			(931	)			31,740				30,809						(5,196	)			2,461						(2,225	)			71,189
Insurance-Linked Securities			—				(268	)			(268	)			268,724				268,456						(215	)			240,529						(92	)			240,652
Strategic Investments			168,854				—				168,854				—				168,854						209,042				209,042						205,353				205,353
Total other invested assets - Private Markets Exposure Assumed			281,490				(1,199	)			280,291				300,464				580,755						315,852				564,253						326,318				640,476
Other Credit Derivatives - Exposure Assumed			—				—				—				—				—						49				5,049						102				5,102
Other Credit Derivatives - Protection Purchased			—				(71	)			(71	)			(14,000	)			(14,071	)					(231	)			(34,231	)					(404	)			(34,404	)
Other (3)			8,993				31,768				40,761														(47,573	)									60,791
Total other invested assets		$	290,483			$	30,498			$	320,981													$	268,097									$	386,807

 

(1)

The total net exposures originated in Private Markets are $1,484 million at December 31, 2013 ($1,644 million and $1,618 million at September 30 and June 30, 2013, respectively). In addition to the net exposures listed above of $581 million at December 31, 2013 ($564 million and $640 million at September 30, 2013 and June 30, 2013, respectively), the Company has the following other net exposures originated in Private Markets:

 

•

Principal Finance: $640 million of assets listed under Investments - Fixed Maturities and $10 million listed under Investments - Equities for a total exposure of $793 million at December 31, 2013 ($956 million and $934 million at September 30, 2013 and June 30, 2013, respectively).

 

•

Insurance-Linked Securities: $92 million of bonds listed under Investments - Fixed Maturities for a total exposure of $361 million at December 31, 2013 ($443 million and $443 million at September 30, 2013 and June 30, 2013, respectively).

 

•

Strategic Investments: $159 million of assets listed under Investments - Equities, and $2 million of assets listed under Other Assets for a total exposure of $330 million at December 31, 2013 ($245 million and $241 million at September 30, 2013 and June 30, 2013, respectively).

 

(2)	The Company enters into interest rate swaps to mitigate notional exposure on certain fixed maturities and total return swaps. Accordingly, the notional value of these interest rate swaps is not presented in the table.

(3)	Other includes foreign currency and fixed income hedging instruments used to manage currency and duration exposure, respectively, and other miscellaneous invested assets.

 

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PartnerRe Ltd.

Funds Held - Directly Managed Portfolio

(Expressed in millions of U.S. dollars)

(Unaudited)

 

		December 31, 2013								September 30, 2013								June 30, 2013								March 31, 2013								December 31, 2012										December 31, 2011
Investments:
Fixed maturities
U.S. government		$	108				19	%		$	111				17	%		$	107				16	%		$	129				16	%		$	129				15	%				$	111				11	%
U.S. government sponsored enterprises			50				9				57				9				65				10				90				11				90				11						158				15
Non-U.S. sovereign government, supranational and government related			137				25				193				30				196				29				226				28				234				28						275				26
Corporates			249				44				259				41				287				43				345				43				362				44						480				45
Total fixed maturities			544				97				620				97				655				98				790				98				815				98						1,024				97
Short-term investments			2				—				2				1				—				—				—				—				—				—						18				2
Other invested assets			15				3				16				2				15				2				16				2				18				2						16				1
Total investments		$	561				100	%		$	638				100	%		$	670				100	%		$	806				100	%		$	833				100	%				$	1,058				100	%
Cash and cash equivalents			85								34								20								44								54										176
Total investments and cash		$	646							$	672							$	690							$	850							$	887									$	1,234
Accrued investment income			7								9								8								10								10										14
Other funds held assets/liabilities			133								133								144								50								34										20
Total funds held - directly managed		$	786							$	814							$	842							$	910							$	931									$	1,268
Maturity distribution:
One year or less		$	89				16	%		$	97				16	%		$	114				17	%		$	154				19	%		$	133				17	%				$	227				22	%
More than one year through five years			331				61				377				60				403				62				487				62				515				63						573				55
More than five years through ten years			109				20				122				20				108				16				127				16				141				17						215				20
More than ten years			17				3				26				4				30				5				22				3				26				3						27				3
Total		$	546				100	%		$	622				100	%		$	655				100	%		$	790				100	%		$	815				100	%				$	1,042				100	%
Credit quality by market value:
AAA			13	%							12	%							12	%							11	%							12	%									22	%
AA			58								56								56								59								58										50
A			22								26								26								24								24										24
BBB			7								6								6								6								6										4
			100	%							100	%							100	%							100	%							100	%									100	%
Expected average duration			2.9	Yrs							3.1	Yrs							3.1	Yrs							2.9	Yrs							3.0	Yrs									2.7	Yrs
Average yield to maturity at market			1.2	%							1.2	%							1.3	%							0.9	%							1.0	%									1.7	%
Average credit quality			AA								AA								AA								AA								AA										AA

 

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PartnerRe Ltd.

Distribution of Corporate Bonds

Funds Held - Directly Managed Portfolio

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

						December 31, 2013
		Fair Value				Percentage to Total Fair Value of Corporate Bonds				Percentage to Funds Held - Directly Managed Investments and  cash				Largest single issuer as a percentage of Funds Held  - Directly Managed Investments and cash
Distribution by sector - Corporate bonds
Finance		$	79,017				31.7	%			12.2	%			1.5	%
Consumer noncyclical			51,205				20.6				7.9				1.4
Energy			35,412				14.2				5.5				1.5
Utilities			21,611				8.7				3.4				0.9
Basic materials			15,844				6.3				2.5				0.7
Communications			13,653				5.5				2.1				0.6
Government guaranteed corporate debt			10,098				4.0				1.6				1.2
Consumer cyclical			8,665				3.5				1.3				1.2
Industrials			5,924				2.4				0.9				0.5
Technology			4,154				1.7				0.6				0.6
Real estate investment trusts			3,364				1.4				0.5				0.5
Total Corporate bonds		$	248,947				100.0	%			38.5	%
Finance sector - Corporate bonds
Banks		$	53,973				21.7	%			8.3	%
Financial services			11,567				4.6				1.8
Investment banking and brokerage			10,798				4.3				1.7
Commercial and consumer finance			2,679				1.1				0.4
Total finance sector - Corporate bonds		$	79,017				31.7	%			12.2	%
		AAA				AA				A				BBB				Total
Credit quality of finance sector - Corporate bonds
Banks		$	374			$	26,327			$	25,538			$	1,734			$	53,973
Financial services			—				7,237				4,330				—				11,567
Investment banking and brokerage			10,798				—				—				—				10,798
Commercial and consumer finance			—				—				2,679				—				2,679
Total finance sector - Corporate bonds		$	11,172			$	33,564			$	32,547			$	1,734			$	79,017
% of total			14	%			43	%			41	%			2	%			100	%

Concentration of investment risk

The Top 10 corporate bond issuers account for 31.8% of the Company’s total corporate bonds within the Funds Held - Directly Managed Portfolio. The single largest issuer accounts for 3.9% of the Company’s total corporate bonds within the Funds Held - Directly Managed portfolio.

 

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PartnerRe Ltd.

Composition of Net Investment Income and Net Realized and Unrealized Investment Gains (Losses)

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

		For the three months ended																						For the year ended
		December 31, 2013				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2013				December 31, 2012
Fixed maturities		$	108,580			$	110,911			$	110,727			$	116,082			$	125,903					$	446,299			$	512,833
Short-term investments, cash and cash equivalents			421				266				320				879				1,144						1,886				2,905
Equities			6,278				9,140				12,799				4,772				5,018						32,989				26,207
Funds held and other			8,252				8,824				8,536				8,604				9,435						34,215				44,109
Funds held - directly managed			4,785				4,902				5,010				5,805				6,275						20,502				29,031
Investment expenses			(13,965	)			(12,232	)			(12,889	)			(12,438	)			(12,106	)					(51,524	)			(43,747	)
Net investment income (1)		$	114,351			$	121,811			$	124,503			$	123,704			$	135,669					$	484,367			$	571,338
Net realized investment gains on fixed maturities and short-term investments		$	18,363			$	18,642			$	40,026			$	41,544			$	49,761					$	118,575			$	172,987
Net realized investment gains on equities			6,049				15,057				34,790				19,320				18,868						75,217				72,155
Net realized (losses) gains on other invested assets			(78,098	)			80,065				7,378				11,152				(971	)					20,497				(16,691	)
Change in net unrealized gains (losses) on other invested assets			98,809				(103,406	)			83,285				(22,036	)			(13,903	)					56,652				(9,568	)
Change in net unrealized investment (losses) gains on fixed maturities and short-term investments			(68,619	)			10,259				(395,757	)			(71,670	)			(44,799	)					(525,787	)			186,063
Change in net unrealized investment gains (losses) on equities			126,551				(891	)			(57,715	)			50,066				(2,815	)					118,010				66,253
Net other realized and unrealized investment gains (losses)			198				(2,192	)			696				(809	)			578						(2,107	)			5,843
Net realized and unrealized investment (losses) gains on funds held - directly managed			(3,834	)			(1,416	)			(11,918	)			(4,624	)			(1,606	)					(21,792	)			16,367
Net realized and unrealized investment gains (losses)		$	99,419			$	16,118			$	(299,215	)		$	22,943			$	5,113					$	(160,735	)		$	493,409

 

(1)

Comparisons of net investment income between periods include the impact of foreign exchange variances. For the three months ended December 31, 2013, net investment income includes foreign exchange impacts of $ 0.5 million compared to the three months ended December 31, 2012. For the year ended December 31, 2013, net investment income includes foreign exchange impacts of $6.6 million compared to the year ended December 31, 2012.

 

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PartnerRe Ltd.

Composition of Net Investment Income and Net Realized and Unrealized Investment (Losses) Gains

Funds Held - Directly Managed Portfolio

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

		For the three months ended																						For the year ended
		December 31, 2013				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2013				December 31, 2012
Fixed maturities		$	4,054			$	4,697			$	4,717			$	5,336			$	6,307					$	18,804			$	27,760
Short-term investments, cash and cash equivalents			343				299				227				377				333						1,246				1,046
Other			285				316				364				322				364						1,287				1,647
Investment expenses			103				(410	)			(298	)			(230	)			(729	)					(835	)			(1,422	)
Net investment income		$	4,785			$	4,902			$	5,010			$	5,805			$	6,275					$	20,502			$	29,031
Net realized investment gains (losses) on fixed maturities and short-term investments		$	1,695			$	(618	)		$	3,495			$	1,449			$	8,642					$	6,021			$	8,405
Net realized investment gains (losses) on other invested assets			—				81				(62	)			—				—						19				—
Change in net unrealized investment (losses) gains on fixed maturities and short-term investments			(4,618	)			(969	)			(14,621	)			(3,968	)			(10,019	)					(24,176	)			6,583
Change in net unrealized investment (losses) gains on other invested assets			(911	)			90				(730	)			(2,105	)			(229	)					(3,656	)			1,379
Net realized and unrealized investment (losses) gains on funds held - directly managed		$	(3,834	)		$	(1,416	)		$	(11,918	)		$	(4,624	)		$	(1,606	)				$	(21,792	)		$	16,367

 

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PartnerRe Ltd.

Analysis of Unpaid Losses and Loss Expenses

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

		As at and for the three months ended																						As at and for the year ended
		December 31, 2013				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2013				December 31, 2012
Reconciliation of beginning and ending liability for unpaid losses and loss expenses:
Gross liability at beginning of period		$	10,564,542			$	10,336,368			$	10,323,786			$	10,709,371			$	10,761,302					$	10,709,371			$	11,273,091
Reinsurance recoverable at beginning of period			(285,206	)			(276,295	)			(292,711	)			(291,330	)			(308,154	)					(291,330	)			(353,105	)
Net liability at beginning of period			10,279,336				10,060,073				10,031,075				10,418,041				10,453,148						10,418,041				10,919,986
Net incurred losses related to:
Current year			849,706				793,894				813,492				661,665				793,291						3,118,755				2,785,694
Prior years			(173,000	)			(238,354	)			(127,350	)			(182,796	)			(160,564	)					(721,499	)			(628,065	)
			676,706				555,540				686,142				478,869				632,727						2,397,256				2,157,629
Change in reserve agreement (1)			(3,607	)			(19,967	)			(7	)			(25,963	)			(18,862	)					(49,544	)			(86,163	)
Net losses paid			(589,413	)			(474,012	)			(632,011	)			(706,123	)			(707,035	)					(2,401,559	)			(2,705,062	)
Effects of foreign exchange rate changes			15,912				157,702				(25,126	)			(133,749	)			58,063						14,740				131,651
Net liability at end of period			10,378,934				10,279,336				10,060,073				10,031,075				10,418,041						10,378,934				10,418,041
Reinsurance recoverable at end of period			267,384				285,206				276,295				292,711				291,330						267,384				291,330
Gross liability at end of period		$	10,646,318			$	10,564,542			$	10,336,368			$	10,323,786			$	10,709,371					$	10,646,318			$	10,709,371
Breakdown of gross liability at end of period:
Case reserves		$	4,663,164			$	4,711,580			$	4,645,378			$	4,792,975			$	4,872,591					$	4,663,164			$	4,872,591
Additional case reserves			403,145				401,752				346,553				373,509				343,549						403,145				343,549
Incurred but not reported reserves			5,580,009				5,451,210				5,344,437				5,157,302				5,493,231						5,580,009				5,493,231
Gross liability at end of period		$	10,646,318			$	10,564,542			$	10,336,368			$	10,323,786			$	10,709,371					$	10,646,318			$	10,709,371
Breakdown of gross liability at end of period by Non-life sub-segment:
North America		$	3,535,946			$	3,397,875			$	3,332,288			$	3,279,989			$	3,373,852					$	3,535,946			$	3,373,852
Global (Non-U.S.) P&C			2,444,129				2,424,923				2,388,789				2,412,743				2,507,761						2,444,129				2,507,761
Global Specialty			3,951,543				3,978,436				3,817,570				3,788,417				3,868,700						3,951,543				3,868,700
Catastrophe			714,700				763,308				797,721				842,637				959,058						714,700				959,058
Gross liability at end of period		$	10,646,318			$	10,564,542			$	10,336,368			$	10,323,786			$	10,709,371					$	10,646,318			$	10,709,371
Unrecognized time value of non-life reserves		$	733,528			$	688,734			$	658,929			$	452,389			$	465,625					$	733,528			$	465,625
Non-life paid loss ratio data:
Non-life paid losses to incurred losses ratio			87.1	%			85.3	%			92.1	%			147.5	%			111.7	%					100.2	%			125.4	%
Non-life paid losses to net premiums earned ratio			50.7	%			40.2	%			64.7	%			76.5	%			73.5	%					56.6	%			73.3	%

 

(1)	The change in the reserve agreement is due to favorable development on Paris Re’s reserves which are guaranteed by Axa under the reserve agreement.

 

27

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PartnerRe Ltd.

Analysis of Policy Benefits for Life and Annuity Contracts

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

						As at and for the three months ended																		As at and for the year ended
		December 31, 2013				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2013				December 31, 2012
Reconciliation of beginning and ending policy benefits for life and annuity contracts:
Gross liability at beginning of period		$	1,908,575			$	1,799,332			$	1,763,413			$	1,813,244			$	1,703,147					$	1,813,244			$	1,645,662
Reinsurance recoverable at beginning of period			(6,978	)			(6,432	)			(9,798	)			(20,684	)			(9,836	)					(20,684	)			(9,874	)
Net liability at beginning of period			1,901,597				1,792,900				1,753,615				1,792,560				1,693,311						1,792,560				1,635,788
Liability acquired related to the acquisition of Presidio			—				—				—				—				54,071						—				54,071
Net incurred losses related to:
Current year			207,998				208,839				192,285				190,474				167,612						799,596				661,343
Prior years			(5,690	)			(13,380	)			(11,584	)			(8,391	)			512						(39,044	)			(14,362	)
			202,308				195,459				180,701				182,083				168,124						760,552				646,981
Net losses paid			(160,309	)			(149,895	)			(153,770	)			(161,571	)			(145,060	)					(625,546	)			(593,690	)
Effects of foreign exchange rate changes			23,515				63,133				12,354				(59,457	)			22,114						39,545				49,410
Net liability at end of period			1,967,111				1,901,597				1,792,900				1,753,615				1,792,560						1,967,111				1,792,560
Reinsurance recoverable at end of period			7,022				6,978				6,432				9,798				20,684						7,022				20,684
Gross liability at end of period		$	1,974,133			$	1,908,575			$	1,799,332			$	1,763,413			$	1,813,244					$	1,974,133			$	1,813,244

 

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PartnerRe Ltd.

Reserve Development

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

		For the three months ended																						For the year ended
		December 31, 2013				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2013				December 31, 2012
Prior year net favorable (adverse) reserve development:
Non-life segment:
North America		$	67,202			$	94,466			$	31,226			$	29,946			$	51,381					$	222,839			$	218,483
Global (Non-U.S.) P&C			48,793				37,493				36,149				57,617				39,929						180,052				114,279
Global Specialty			61,379				77,760				27,780				60,464				45,944						227,383				250,523
Catastrophe			(4,374	)			28,635				32,195				34,769				23,310						91,225				44,780
Total Non-life net prior year reserve development		$	173,000			$	238,354			$	127,350			$	182,796			$	160,564					$	721,499			$	628,065
Non-life segment:
Net prior year reserve development due to changes in premiums		$	(23,458	)		$	(23,508	)		$	(12,714	)		$	(11,129	)		$	(18,866	)				$	(70,810	)		$	(93,971	)
Net prior year reserve development due to all other factors (2)			196,458				261,862				140,064				193,925				179,430						792,309				722,036
Total Non-life net prior year reserve development		$	173,000			$	238,354			$	127,350			$	182,796			$	160,564					$	721,499			$	628,065
Life and Health segment:
Net prior year reserve development due to GMDB (1)		$	6,388			$	11,087			$	3,493			$	5,649			$	(3	)				$	26,617			$	10,009
Net prior year reserve development due to all other factors (2)			(698	)			2,293				8,091				2,742				(509	)					12,427				4,353
Total Life and Health net prior year reserve development		$	5,690			$	13,380			$	11,584			$	8,391			$	(512	)				$	39,044			$	14,362

 

(1)

The guaranteed minimum death benefit (GMDB) reserves are sensitive to volatility in certain referenced global equity markets. At December 31, 2013, a 10% increase in the referenced global equity market would have decreased reserves by approximately $2.8 million, while a 10% decrease in the referenced global equity market would have increased reserves by approximately $3.4 million.

(2)	Net prior year reserve development due to all other factors includes, but is not limited to loss experience, changes in assumptions and changes in methodology.

 

29

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PartnerRe Ltd.

Natural Catastrophe Probable Maximum Losses (PMLs)

(Expressed in millions of U.S. dollars)

(Unaudited)

Single occurrence estimated net PML exposure ⁽¹⁾

 

				October 1, 2013								July 1, 2013								April 1, 2013								Jan 1, 2013								Oct 1, 2012
Zone		Peril		1-in-250 year PML				1-in-500 year PML (Earthquake perils only)				1-in-250 year PML				1-in-500 year PML (Earthquake perils only)				1-in-250 year PML				1-in-500 year PML (Earthquake perils only)				1-in-250 year PML				1-in-500 year PML (Earthquake perils only)				1-in-250 year PML				1-in-500 year PML (Earthquake perils only)
U.S. Southeast		Hurricane		$	1,054							$	1,054							$	1,115							$	1,143							$	1,173
U.S. Northeast		Hurricane			1,121								1,121								1,019								1,124								1,000
U.S. Gulf Coast		Hurricane			1,025								1,025								1,001								1,041								1,069
Caribbean		Hurricane			276								276								270								293								272
Europe		Windstorm			872								872								850								850								927
Japan		Typhoon			124								124								169								192								164
California		Earthquake			575			$	679				575			$	679				574			$	685				722			$	906				734			$	923
British Columbia		Earthquake			305				513				305				513				310				559				314				564				350				526
Japan		Earthquake			435				457				435				457				463				488				503				564				502				543
Australia		Earthquake			418				552				418				552				439				557				468				583				468				582
New Zealand		Earthquake			250				272				250				272				261				282				276				299				320				339

 

(1)	The PML estimates are pre-tax and net of retrocession and reinstatement premiums. The peril zones in this disclosure are major peril zones for the industry. The Company has exposures in other peril zones that can potentially generate losses greater than the PML estimates in this disclosure.

The Company estimates that the incremental loss at the 1-in-250 year return period from a U.S. hurricane impacting more than one of the three hurricane risk zones in the United States would be 20% higher than the PML of the largest zone impacted. In addition, there is the potential for a hurricane to impact the Caribbean peril zone and one or more U.S. hurricane peril zones.

For more information regarding cautionary language related to the Natural Catastrophe PML disclosure and the forward-looking statements, as well as uncertainties and limitations associated with certain assumptions and the methodology used, you must refer to the Company’s natural catastrophe PML information and definitions, see Business - Natural Catastrophe Probable Maximum Loss (PML) in Item 1 of Part 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

 

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PartnerRe Ltd.

Reconciliation of GAAP and non-GAAP measures

(in thousands of U.S. dollars, except per share data)

(Unaudited)

 

		For the three months ended																						For the year ended
		December 31, 2013				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2013				December 31, 2012
Reconciliation of GAAP and non-GAAP measures:
Annualized return on beginning diluted book value per common share calculated with net income (loss) per share attributable to common shareholders (1)			18.9	%			23.2	%			(13.4	)%			14.0	%			7.4	%					10.5	%			19.9	%
Less:
Annualized net realized and unrealized investment gains (losses), net of tax, on beginning diluted book value per common share (1)			6.7				(0.1	)			(16.2	)			0.8				(0.6	)					(2.2	)			7.3
Annualized net foreign exchange gains (losses), net of tax, on beginning diluted book value per common share (1)			0.3				0.4				(0.4	)			(0.1	)			0.6						—				0.1
Annualized net interest in earnings (losses) of equity investments, net of tax, on beginning diluted book value per common share (1)			0.4				0.3				(0.4	)			0.4				0.1						0.2				0.2
Annualized loss on redemption of preferred shares, on beginning diluted book value per common share (1)			—				—				—				(0.6	)			—						(0.2	)			—
Annualized operating return on beginning diluted book value per common share (1)			11.5	%			22.6	%			3.6	%			13.5	%			7.3	%					12.7	%			12.3	%
Net income (loss) attributable to PartnerRe		$	271,788			$	333,423			$	(175,571	)		$	234,370			$	111,521					$	664,008			$	1,134,514
Less:
Net realized and unrealized investment gains (losses), net of tax			91,781				(1,272	)			(229,966	)			12,275				(7,356	)					(127,182	)			392,014
Net foreign exchange gains (losses), net of tax			3,869				5,338				(5,898	)			(787	)			7,281						2,521				8,345
Interest in earnings (losses) of equity investments, net of tax			4,549				3,989				(5,558	)			6,094				520						9,075				8,742
Dividends to preferred shareholders			14,184				14,184				14,796				14,699				15,405						57,861				61,622
Operating earnings attributable to PartnerRe common shareholders		$	157,405			$	311,184			$	51,055			$	202,089			$	95,671					$	721,733			$	663,791
Per diluted common share:
Net income (loss) attributable to PartnerRe common shareholders		$	4.76			$	5.84			$	(3.37	)		$	3.53			$	1.56					$	10.58			$	16.87
Less:
Net realized and unrealized investment gains (losses), net of tax			1.70				(0.03	)			(4.07	)			0.20				(0.12	)					(2.25	)			6.17
Net foreign exchange gains (losses), net of tax			0.07				0.10				(0.10	)			(0.01	)			0.12						0.04				0.13
Loss on redemption of preferred shares			—				—				—				(0.15	)			—						(0.16	)			—
Interest in earnings (losses) of equity investments, net of tax			0.08				0.07				(0.10	)			0.10				0.01						0.16				0.14
Operating earnings attributable to PartnerRe common shareholders		$	2.91			$	5.70			$	0.90			$	3.39			$	1.55					$	12.79			$	10.43

 

(1)	Excluding preferred shares of $893,750 at January 1, 2013 and 2012.

 

31

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PartnerRe Ltd.

Reconciliation of GAAP and non-GAAP measures

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

 

		December 31, 2013				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2011
Reconciliation of GAAP and non-GAAP measures:
Total shareholders’ equity		$	6,766,159			$	6,624,176			$	6,415,276			$	6,947,558			$	6,933,496					$	6,467,542
Less:
Preferred shares, aggregate liquidation value			853,750				853,750				853,750				853,750				893,750						893,750
Noncontrolling interests			56,627				52,489				48,319				36,844				—						—
Common shareholders’ equity attributable to PartnerRe			5,855,782				5,717,937				5,513,207				6,056,964				6,039,746						5,573,792
Less:
Goodwill			456,380				456,380				456,380				456,380				456,380						455,533
Intangible assets, net of tax			120,900				121,922				127,662				135,207				141,249						93,254
Tangible book value		$	5,278,502			$	5,139,635			$	4,929,165			$	5,465,377			$	5,442,117					$	5,025,005
Common shares and common share equivalents outstanding			53,596,034				54,181,672				55,325,581				58,826,334				59,893,366						65,715,708
Equals:
Diluted tangible book value per common share		$	98.49			$	94.86			$	89.09			$	92.91			$	90.86					$	76.47

 

32

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PartnerRe Ltd.

Reconciliation of GAAP and non-GAAP measures

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

 

		December 31, 2013				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2011
Reconciliation of GAAP and non-GAAP measures:
Total shareholders’ equity		$	6,766,159			$	6,624,176			$	6,415,276			$	6,947,558			$	6,933,496					$	6,467,542
Less:
Preferred shares, aggregate liquidation value			853,750				853,750				853,750				853,750				893,750						893,750
Noncontrolling interests			56,627				52,489				48,319				36,844				—						—
Common shareholders’ equity attributable to PartnerRe			5,855,782				5,717,937				5,513,207				6,056,964				6,039,746						5,573,792
Less:
Goodwill			456,380				456,380				456,380				456,380				456,380						455,533
Intangible assets, net of tax			120,900				121,922				127,662				135,207				141,249						93,254
Tangible book value			5,278,502				5,139,635				4,929,165				5,465,377				5,442,117						5,025,005
Net unrealized gains on fixed income securities and funds held - directly managed, net of tax (NURGL)			223,995				194,144				291,987				563,953				657,604						451,946
Book value excluding NURGL		$	5,631,787			$	5,523,793			$	5,221,220			$	5,493,011			$	5,382,142					$	5,121,846
Tangible book value excluding NURGL		$	5,054,507			$	4,945,491			$	4,637,178			$	4,901,424			$	4,784,513					$	4,573,059
Divided by:
Number of common shares and common share equivalents outstanding			53,596,034				54,181,672				55,325,581				58,826,334				59,893,366						65,715,708
Equals:
Diluted book value per common share excluding NURGL		$	105.08			$	101.95			$	94.37			$	93.38			$	89.86					$	77.94
Diluted tangible book value per common share excluding NURGL		$	94.31			$	91.28			$	83.82			$	83.32			$	79.88					$	69.59

 

33

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PartnerRe Ltd.

Diluted Book Value per Common Share - Treasury Stock Method ⁽¹⁾

(in thousands of U.S. dollars, except share and per share data)

(Unaudited)

 

		December 31, 2013				September 30, 2013				June 30, 2013				March 31, 2013				December 31, 2012						December 31, 2011
Basic book value per common share
Total shareholders’ equity		$	6,766,159			$	6,624,176			$	6,415,276			$	6,947,558			$	6,933,496					$	6,467,542
Less:
Preferred shares, aggregate liquidation value			853,750				853,750				853,750				853,750				893,750						893,750
Noncontrolling interests			56,627				52,489				48,319				36,844				—						—
Common shareholders’ equity attributable to PartnerRe		$	5,855,782			$	5,717,937			$	5,513,207			$	6,056,964			$	6,039,746					$	5,573,792
Basic common shares outstanding			52,443,434				53,227,765				54,321,732				57,660,188				58,909,375						65,322,328
Basic book value per common share		$	111.66			$	107.42			$	101.49			$	105.05			$	102.53					$	85.33
Common shareholders’ equity attributable to PartnerRe		$	5,855,782			$	5,717,937			$	5,513,207			$	6,056,964			$	6,039,746					$	5,573,792
Basic common shares outstanding			52,443,434				53,227,765				54,321,732				57,660,188				58,909,375						65,322,328
Add:
Stock options and other			2,382,771				2,438,798				2,614,443				3,105,137				2,892,514						809,392
Restricted stock units			870,054				887,442				900,577				793,400				864,269						488,999
Less:
Stock options and other bought back via treasury stock method			2,100,225				2,372,333				2,511,171				2,732,391				2,772,792						905,011
Diluted common shares and common share equivalents outstanding			53,596,034				54,181,672				55,325,581				58,826,334				59,893,366						65,715,708
Diluted book value per common share		$	109.26			$	105.53			$	99.65			$	102.96			$	100.84					$	84.82

 

(1)

This method assumes that proceeds received upon exercise of options will be used to repurchase the Company’s common shares at the average market price. Unvested restricted stock and the dilutive impact of the Company’s forward sale contracts, if any, are also added to determine the diluted common shares and common share equivalents outstanding.

 

34

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PartnerRe Ltd.

Diluted Book Value per Common Share - Rollforward

(in millions of U.S. dollars, except per share data)

(Unaudited)

 

		As at and for the three months ended December 31,  2013										As at and for the year ended December 31, 2013
		Common shareholders’ equity				Diluted book value per common share						Common shareholders’ equity				Diluted book value per common share
Common shareholders’ equity attributable to PartnerRe / diluted book value per common share at beginning of period		$	5,718			$	105.53					$	6,040			$	100.84
Technical result			224				4.13						962				17.06
Other operating expenses			(131	)			(2.42	)					(500	)			(8.87	)
Net investment income			114				2.11						484				8.58
Amortization of intangible assets			(6	)			(0.11	)					(27	)			(0.48	)
Other, net			(18	)			(0.32	)					(47	)			(0.85	)
Operating income tax expense			(12	)			(0.22	)					(92	)			(1.63	)
Preferred dividends			(14	)			(0.26	)					(58	)			(1.02	)
Operating earnings			157				2.91						722				12.79
Net realized and unrealized investment gains (losses), net of tax			92				1.70						(127	)			(2.25	)
Net foreign exchange gains, net of tax			4				0.07						2				0.04
Loss on redemption of preferred shares			—				—						(9	)			(0.16	)
Interest in earnings of equity investments, net of tax			5				0.08						9				0.16
Net income attributable to PartnerRe common shareholders			258				4.76						597				10.58
Common share dividends			(34	)			(0.64	)					(142	)			(2.56	)
Change in currency translation adjustment			(15	)			(0.27	)					(32	)			(0.56	)
Repurchase of common shares, net			(80	)			0.06						(616	)			0.84
Preferred share issuance costs			—				—						(9	)			(0.15	)
Recognition of loss on redemption of preferred shares			—				—						9				0.16
Change in other accumulated comprehensive income or loss, net of tax			9				0.16						9				0.16
Impact of change in number of common and common share equivalents outstanding			n/a				(0.34	)					n/a				(0.05	)
Common shareholders’ equity attributable to PartnerRe / diluted book value per common share at end of period		$	5,856			$	109.26					$	5,856			$	109.26
Goodwill			(456	)			(8.51	)					(456	)			(8.51	)
Intangible assets, net of tax			(121	)			(2.26	)					(121	)			(2.26	)
Tangible common shareholders’ equity attributable to PartnerRe / diluted tangible book value per common share at end of period		$	5,279			$	98.49					$	5,279			$	98.49

 

35

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PartnerRe Ltd.

Diluted Book Value per Common Share - Rollforward

(in millions of U.S. dollars, except per share data)

(Unaudited)

 

		As at and for the year ended December 31, 2012										As at and for the year ended December 31, 2011
		Common shareholders’ equity				Diluted book value per common share						Common shareholders’ equity				Diluted book value per common share
Common shareholders’ equity attributable to PartnerRe / diluted book value per common share at beginning of period		$	5,574			$	84.82					$	6,687			$	93.77
Technical result			744				11.70						(663	)			(9.82	)
Other operating expenses			(411	)			(6.47	)					(435	)			(6.44	)
Net investment income			571				8.98						629				9.31
Amortization of intangible assets			(32	)			(0.50	)					(36	)			(0.54	)
Other, net			(36	)			(0.58	)					(42	)			(0.61	)
Operating income tax expense			(110	)			(1.73	)					(48	)			(0.71	)
Preferred dividends			(62	)			(0.97	)					(47	)			(0.69	)
Operating earnings (loss)			664				10.43						(642	)			(9.50	)
Net realized and unrealized investment gains, net of tax			392				6.17						15				0.23
Net foreign exchange gains, net of tax			8				0.13						67				0.98
Interest in earnings (losses) of equity investments, net of tax			9				0.14						(7	)			(0.11	)
Net income (loss) attributable to PartnerRe common shareholders			1,073				16.87						(567	)			(8.40	)
Common share dividends			(156	)			(2.48	)					(159	)			(2.35	)
Change in currency translation adjustment			28				0.45						(12	)			(0.17	)
Repurchase of common shares, net			(474	)			2.07						(358	)			0.93
Preferred shares issuance costs			—				—						(12	)			(0.18	)
Change in other accumulated comprehensive income or loss, net of tax			(5	)			(0.08	)					(5	)			(0.07	)
Impact of change in number of common and common share equivalents outstanding			n/a				(0.81	)					n/a				1.29
Common shareholders’ equity attributable to PartnerRe / diluted book value per common share at end of period		$	6,040			$	100.84					$	5,574			$	84.82
Goodwill			(456	)			(7.62	)					(456	)			(6.93	)
Intangibles, net of tax			(142	)			(2.36	)					(93	)			(1.42	)
Tangible common shareholders’ equity attributable to PartnerRe / diluted tangible book value per common share at end of period		$	5,442			$	90.86					$	5,025			$	76.47

 

36