UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

CURRENT REPORT

Pursuant To Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): October 26, 2015

PartnerRe Ltd.

(Exact Name of Registrant as Specified in Charter)

Bermuda

(State or Other Jurisdiction of Incorporation)

 

001-14536		Not Applicable
(Commission File Number)		(IRS Employer Identification No.)
Wellesley House, 90 Pitts Bay Road, Pembroke, Bermuda		HM 08
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (441) 292-0888

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

c	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
c	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
c	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
c	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 2.02	Results of Operations and Financial Condition

On October 26, 2015, PartnerRe Ltd. issued a press release reporting its 2015 third quarter results. A copy of the press release, as well as a financial supplement, are attached hereto as Exhibits 99.1 and 99.2, respectively, to this Form 8-K and are hereby incorporated by reference to this Item 2.02.

As provided in General Instruction B.2 of Form 8-K, the information and exhibits contained in this Form 8-K are not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, are not otherwise subject to the liabilities of that section and are not incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such a filing.

 

Item 8.01	Other Events

On October 26, 2015, PartnerRe Ltd. issued a press release reporting that its Board of Directors has declared a dividend of $0.70 per common share. A copy of the press release is attached as Exhibit 99.3 to this Form 8-K and is hereby incorporated by reference to this Item 8.01.

 

Item 9.01	Financial Statements and Exhibits

(d)	Exhibits.

Exhibit No.		Description
99.1		Press Release of PartnerRe Ltd., dated October 26, 2015
99.2		Financial Supplement
99.3		Press Release of PartnerRe Ltd., dated October 26, 2015

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

						PartnerRe Ltd.
						(Registrant)
Date:		October 26, 2015				By:		/s/ Marc Wetherhill
								Name: Marc Wetherhill
								Title:   Chief Legal Counsel

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Index to Exhibits

 

Exhibit No.			Description
99.1			Press Release of PartnerRe Ltd., dated October 26, 2015
99.2			Financial Supplement
99.3			Press Release of PartnerRe Ltd., dated October 26, 2015

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Exhibit 99.1

                                                    

News Release

PartnerRe Ltd. Reports Third Quarter and Nine Month 2015 Results

•	Third Quarter Operating Earnings per share of $4.42; Net Loss per share of $5.08

•	Third Quarter Annualized Operating ROE of 14.0%; Annualized Net Loss ROE of 16.1%

•	Nine Month Operating Earnings per share of $9.95; Net Loss per share of $2.40

•	Nine Month Annualized Operating ROE of 10.5%; Annualized Net Loss ROE of 2.5%

•	Book Value of $120.67 per share, down 5.2% for the quarter and down 4.4% year-to-date

•	Tangible Book Value of $109.46 per share, down 5.6% for the quarter and down 4.6% year-to-date

PEMBROKE, Bermuda, October 26, 2015 — PartnerRe Ltd. (NYSE: PRE) today reported a net loss of $243.3 million, or $5.08 per share for the third quarter of 2015. This includes the amalgamation termination fee and reimbursement of expenses paid to Axis Capital of $315.0 million, or $6.58 per share, and net after-tax realized and unrealized losses on investments of $121.8 million, or $2.54 per share. Net income for the third quarter of 2014 was $182.2 million, or $3.60 per share, including net after-tax realized and unrealized losses on investments of $35.4 million, or $0.70 per share. The Company reported operating earnings of $211.6 million, or $4.42 per share, for the third quarter of 2015. This compares to operating earnings of $226.7 million, or $4.47 per share, for the third quarter of 2014.

The net loss for the first nine months of 2015 was $114.7 million, or $2.40 per share. This includes the amalgamation termination fee and reimbursement of expenses paid to Axis Capital of $315.0 million, or $6.60 per share, and net after-tax realized and unrealized losses on investments of $238.7 million, or $5.00 per share. Net income for the first nine months of 2014 was $735.5 million, or $14.26 per share. This includes net after-tax realized and unrealized gains on investments of $204.1 million, or $3.95 per share. Operating earnings for the first nine months of 2015 were $474.6 million, or $9.95 per share. This compares to operating earnings of $537.1 million, or $10.42 per share, for the first nine months of 2014.

Operating earnings or loss excludes certain net after-tax realized and unrealized investment gains and losses, net after-tax foreign exchange gains and losses, certain net after-tax interest in results of equity method investments, the loss on redemption of preferred shares, certain net after-tax withholding tax on inter-company dividends (included in other expenses) and the amalgamation termination fee and reimbursement of expenses paid to Axis Capital (included in other expenses), and is calculated after the payment of preferred dividends. All references to per share amounts in the text of this press release are on a fully diluted basis.

PartnerRe Ltd. Wellesley House, 5th Floor 90 Pitts Bay Road Pembroke, Bermuda HM 08	Telephone +1 441 292 0888 Fax +1 441 292 6080 www.partnerre.com

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News Release

PartnerRe Interim Chief Executive Officer David Zwiener said, “Our results this quarter reflect a number of factors, most notably the amalgamation termination fee paid to Axis Capital, and continued difficult financial and investment markets, both of which had a negative impact on our book value. Despite the noise, and the impact of the Chinese Tianjin loss in August, our underlying results remain strong. All in, we posted a 1.4 point improvement in our Non-life combined ratio to 82.8% when compared to the third quarter of 2014. Our Life and Health portfolios also remain strong. Overall for the third quarter, we recorded an operating ROE of 14%, which on the back of our solid performance for the first half of 2015, resulted in an operating ROE of 10.5% for the year to date.”

Commenting on market conditions, PartnerRe President Emmanuel Clarke, said, “As we look ahead to the important January renewal season, which accounts for more than 60% of our Non-life treaty premium, reinsurance markets remain competitive across the board. In addition, M&A activity is continuing to be a distraction for some market participants. At PartnerRe, however, we continue to distinguish ourselves with our clients as a stable and focused partner with long-term financial flexibility, and a proven track record of reliability.”

Highlights for the third quarter and first nine months of 2015 compared to the same periods in 2014 include:

Results of operations:

•

For the third quarter, net premiums written of $1.2 billion were down 11%. On a constant foreign exchange basis, net premiums written were down 5% primarily driven by decreases reported in the Catastrophe and North America Non-life sub-segments. For the first nine months of 2015, net premiums written of $4.2 billion were down 7%. On a constant foreign exchange basis, net premiums written were down 1% primarily due to the Catastrophe and North America Non-Life sub-segments. These decreases were partially offset by an increase in the Life and Health segment.

•

For the third quarter, net premiums earned of $1.4 billion were down 9%. On a constant foreign exchange basis, net premiums earned were down 3% primarily due to the Catastrophe and North America Non-life sub-segments. For the first nine months of 2015, net premiums earned of $4.0 billion were down 5%. On a constant foreign exchange basis, net premiums earned were up 2%, primarily due to the Life and Health segment, and, to a lesser extent, the Global Specialty and Global (Non-U.S.) P&C Non-life sub-segments. These increases were partially offset by decreases in the Catastrophe Non-life sub-segment.

•

For the third quarter, the Non-life combined ratio was 82.8%. The combined ratio benefited from favorable prior year development of 22.2 points (or $246 million) and included 5.4 points (or $60 million) of large losses related to the Tianjin explosion. All Non-life sub-segments experienced net favorable development from prior accident years during the third quarter of 2015. For the first nine months of 2015, the Non-life combined ratio was 85.3%. The combined ratio benefited from favorable prior year development of 21.0 points (or $644 million) and included 2.0 points (or $60

PartnerRe Ltd. Wellesley House, 5th Floor 90 Pitts Bay Road Pembroke, Bermuda HM 08	Telephone +1 441 292 0888 Fax +1 441 292 6080 www.partnerre.com

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News Release

million) of large losses related to the Tianjin explosion. All Non-life sub-segments experienced net favorable development on prior accident years during the first nine months of 2015.

•

For the third quarter, other expenses of $416 million include the termination fee and reimbursement of expenses paid to Axis Capital of $315 million, or $6.58 per diluted share. Additionally, other expenses include other Axis Capital and Exor transaction related expenses of $7 million, pre-tax, or $0.15 per diluted share, pre-tax. For the first nine months of 2015, other expenses of $670 million include the termination fee and reimbursement of expenses paid to Axis Capital of $315 million, or $6.60 per diluted share. Additionally, other expenses include other Axis Capital and Exor transaction related expenses of $47 million, pre-tax, or $0.98 per diluted share, pre-tax, and costs related to the negotiated earn-out consideration paid to the former shareholders of Presidio Reinsurance Group, Inc. of $25 million, or $0.53, per diluted share, pre-tax.

•

For the third quarter, net investment income of $117 million was down 1%. On a constant foreign exchange basis, net investment income was up 3% reflecting additional income from higher yielding securities. For the first nine months of 2015, net investment income of $342 million was down 6%. On a constant foreign exchange basis, net investment income was down 3% primarily reflecting lower reinvestment rates.

•

For the third quarter and first nine months of 2015, pre-tax net realized and unrealized investment losses were $133 million and $273 million, respectively, primarily reflecting widening U.S. and European credit spreads and decreases in worldwide equity markets. The losses in net realized and unrealized investment losses for the third quarter were partially offset by decreases in longer-term U.S. and European risk-free rates.

•	For the third quarter, the effective tax rate on operating earnings and non-operating losses was 12.9% and 3.4%, respectively. For the first nine months of 2015, the effective tax rate on operating earnings and non-operating losses was 15.2% and 1.7%, respectively.

Balance sheet and capitalization:

•	Total investments, cash and funds held – directly managed were $16.3 billion at September 30, 2015, down 5% compared to December 31, 2014. The decrease was primarily due to cash flows out of the portfolio to fund the termination fee and reimbursement of expenses paid to Axis Capital, the impact of the strengthening U.S. dollar, and the widening of U.S. and European credit spreads.

•	Net Non-life loss and loss expense reserves were $9.3 billion at September 30, 2015, down 2% compared to December 31, 2014, primarily reflecting the impacts of foreign exchange.

•	Net policy benefits for life and annuity contracts were $2.1 billion at September 30, 2015, up 3% compared to December 31, 2014, primarily due to growth in the business, which was partially offset by the impacts of foreign exchange.

•	Total capital was $7.6 billion at September 30, 2015, down 3% compared to December 31, 2014, primarily due to the net loss for the first nine months of 2015 and common and preferred dividend payments.

PartnerRe Ltd. Wellesley House, 5th Floor 90 Pitts Bay Road Pembroke, Bermuda HM 08	Telephone +1 441 292 0888 Fax +1 441 292 6080 www.partnerre.com

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News Release

•	Total shareholders’ equity attributable to PartnerRe was $6.8 billion at September 30, 2015, down 4% compared to December 31, 2014, due to the same factors described above for total capital.

•	Book value per common share was $120.67 at September 30, 2015, down 4% compared to $126.21 at December 31, 2014. Tangible book value per common share was $109.46 at September 30, 2015, down 5% compared to $114.76 at December 31, 2014. The decreases were primarily driven by the net loss and common and preferred dividend payments.

Segment and sub-segment highlights for the third quarter and first nine months of 2015 compared to the same period in 2014 include:

Non-life:

•

For the third quarter, the Non-life segment’s net premiums written were down 12%. On a constant foreign exchange basis, net premiums written were down 7%. For the first nine months of 2015, the Non-life segment’s net premiums written were down 10%. On a constant foreign exchange basis, net premiums written were down 4%. The decreases on a constant foreign exchange basis for both the third quarter and first nine months of 2015 were reported in all sub-segments, except for a modest increase in the Global (Non-U.S.) P&C sub-segment.

•

For the third quarter, the North America sub-segment’s net premiums written were down 10%. On a constant foreign exchange basis, net premiums written were down 9% with the decrease driven by cancellations across multiple lines of business, downward premium adjustments in the agriculture line and higher premiums ceded in the credit/surety and agriculture lines of business. This sub-segment reported a technical ratio of 78.1%, which included 25.1 points (or $102 million) of net favorable prior year loss development. For the first nine months of 2015, the North America sub-segment’s net premiums written were down 6%, primarily due to the same factors describing the third quarter. This sub-segment reported a technical ratio of 83.8%, which included 19.3 points (or $229 million) of net favorable prior year loss development.

•

For the third quarter, the Global (Non-U.S.) P&C sub-segment’s net premiums written were down 7%. On a constant foreign exchange basis, net premiums written were up 5% primarily due to new business written across all lines of business, which was partially offset by an increased participation on an existing motor treaty recorded in the same period of 2014. This sub-segment reported a technical ratio of 92.7%, which included 20.7 points (or $38 million) of net favorable prior year loss development, and included 12.1 points (or $22 million) of large losses related to the Tianjin explosion. For the first nine months of 2015, the Global (Non-U.S.) P&C sub-segment’s net premiums written were down 8%. On a constant foreign exchange basis, net premiums written were up 3% primarily due to new business written across all lines of business, which was partially offset by cancellations and downward premium adjustments in the property and motor lines of business. This sub-segment reported a technical ratio of 96.6%, which included 12.9 points (or $67 million) of net favorable prior year loss development, and included 4.3 points (or $22 million) of large losses related to the Tianjin explosion.

PartnerRe Ltd. Wellesley House, 5th Floor 90 Pitts Bay Road Pembroke, Bermuda HM 08	Telephone +1 441 292 0888 Fax +1 441 292 6080 www.partnerre.com

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News Release

•

For the third quarter, the Global Specialty sub-segment’s net premiums written were down 9%. On a constant foreign exchange basis, net premiums written were down 2% primarily due to downward premium adjustments in multiple lines of business and the impact of cancellations in prior periods across multiple lines of business. These decreases in net premiums written were partially offset by new business written in prior periods across multiple lines of business. This sub-segment reported a technical ratio of 83.2%, which included 25.6 points (or $104 million) of net favorable prior year loss development, and included 4.6 points (or $19 million) of large losses related to the Tianjin explosion. For the first nine months of 2015, the Global Specialty sub-segment’s net premiums written were down 8%. On a constant foreign exchange basis, net premiums written were down 1% primarily due to cancellations, reduced participations and downward prior year premium adjustments across multiple lines of business, which were partially offset by new business written across multiple lines of business in prior periods and lower premiums ceded under the Company's retrocessional programs. This sub-segment reported a technical ratio of 78.7%, which included 28.3 points (or $323 million) of net favorable prior year loss development, and included 1.6 points (or $19 million) of large losses related to the Tianjin explosion.

•

For the third quarter, the Catastrophe sub-segment’s net premiums written were down 75%. On a constant foreign exchange basis, net premiums written were down 65% primarily due to higher premiums ceded under the Company's retrocessional programs and, to a lesser extent, cancellations and non-renewals. These decreases in net premiums written were partially offset by new business. This sub-segment reported a technical ratio of 33.6%, which included 1.3 points (or $2 million) of net favorable prior year loss development, and included 14.5 points (or $16 million) of large losses related to the Tianjin explosion. For the first nine months of 2015, the Catastrophe sub-segment’s net premiums written were down 29%. On a constant foreign exchange basis, net premiums written were down 23% primarily due to the same factors describing the third quarter. This sub-segment reported a technical ratio of 25.9%, which included 11.7 points (or $25 million) of net favorable prior year loss development, and included 7.6 points (or $16 million) of large losses related to the Tianjin explosion.

 

Life and Health:

•

For the third quarter, the Life and Health segment’s net premiums written were down 8%. On a constant foreign exchange basis, net premiums written were up 1% with the increase primarily driven by PartnerRe Health’s accident and health line of business, which was partially offset by decreases in the longevity and mortality lines of business. For the first nine months of 2015, the Life and Health segment’s net premiums written were up 1%. On a constant foreign exchange basis, net premiums written were up 9% primarily driven by PartnerRe Health’s accident and health line of business, an increase in our participation on a significant longevity treaty and new short-term business written in the mortality line.

PartnerRe Ltd. Wellesley House, 5th Floor 90 Pitts Bay Road Pembroke, Bermuda HM 08	Telephone +1 441 292 0888 Fax +1 441 292 6080 www.partnerre.com

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News Release

•

For the third quarter, the Life and Health segment’s allocated underwriting result, which includes allocated investment income and other expenses, decreased to $18 million compared to $20 million in the same period of 2014. This decrease was primarily due to adverse prior year loss development related to the GMDB line of business partially offset by increased favorable prior year loss development on PartnerRe Health's accident and health line of business. For the first nine months of 2015, the Life and Health segment’s allocated underwriting result, which includes allocated investment income and other expenses, increased to $69 million compared to $52 million in the same period of 2014 primarily due to an increase in net favorable prior year loss development.

Corporate and Other:

•

For the third quarter, investment activities contributed losses of $34 million to the pre-tax net loss, excluding investment income allocated to the Life and Health segment. Of this amount, income of $100 million was included in pre-tax operating earnings and a loss of $134 million related to net realized and unrealized losses on investments and losses from equity method investee companies was included in pre-tax non-operating losses. For the first nine months of 2015, investment activities contributed income of $29 million to the pre-tax net loss, excluding investment income allocated to the Life and Health segment. Of this amount, income of $298 million was included in pre-tax operating earnings and losses of $269 million related to net realized and unrealized losses on investments and earnings from equity method investee companies was included in pre-tax non-operating losses.

Separately, as announced by the Company earlier today, the Board of Directors declared a quarterly dividend of $0.70 per common share. The dividend will be payable on December 1, 2015 to common shareholders of record on November 6, 2015.

The Company has posted its third quarter 2015 financial supplement on its website www.partnerre.com in the Financial Information section of the Investor Relations page under Supplementary Financial Data, which includes a reconciliation of GAAP and non-GAAP measures.

The Company will hold a dial-in conference call and question and answer session with investors at 10 a.m. Eastern tomorrow, October 27. Investors and analysts are encouraged to call in 15 minutes prior to the commencement of the call. The conference call can be accessed by dialing (877)-876-9176 or, from outside the United States, by dialing (785)-424-1667. The media are invited to listen to the call live over the Internet on the Investor Relations section of PartnerRe’s web site, www.partnerre.com. To listen to the webcast, please log on to the broadcast at least five minutes prior to the start.

 

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PartnerRe Ltd. Wellesley House, 5th Floor 90 Pitts Bay Road Pembroke, Bermuda HM 08	Telephone +1 441 292 0888 Fax +1 441 292 6080 www.partnerre.com

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News Release

Net income/loss per share is defined as net income/loss attributable to PartnerRe common shareholders divided by the weighted average number of fully diluted shares outstanding for the period. Net income/loss attributable to PartnerRe common shareholders is defined as net income/loss attributable to PartnerRe less preferred dividends and loss on redemption of preferred shares.

Operating earnings/loss is defined as net income/loss available to PartnerRe common shareholders excluding certain after-tax net realized and unrealized gains/losses on investments, after-tax net foreign exchange gains/losses, the loss on redemption of preferred shares, certain after-tax interest in earnings/losses of equity method investments, certain after-tax withholding taxes on inter-company dividends (included in other expenses) and the amalgamation termination fee and reimbursement of expenses paid to Axis Capital (included in other expenses). Operating earnings/loss per share is defined as operating earnings/loss divided by the weighted average number of fully diluted shares outstanding for the period.

The Company uses operating earnings, diluted operating earnings per share and annualized operating return on beginning diluted book value per common and common share equivalents outstanding to measure performance, as these measures focus on the underlying fundamentals of our operations without the impact of after-tax net realized and unrealized gains/losses on investments (except where the Company has made a strategic investment in an insurance or reinsurance related investee), after-tax net foreign exchange gains/losses, the after-tax interest in earnings/losses of equity method investments (except where the Company has made a strategic investment in an insurance or reinsurance related investee and where the Company does not control the investees activities), certain after-tax withholding taxes on inter-company dividends (included in other expenses) and the amalgamation termination fee and reimbursement of expenses paid to Axis Capital (included in other expenses).

The Company uses technical ratio and technical result as measures of underwriting performance. The technical ratio is defined as the sum of the loss and acquisition ratios. These metrics exclude other expenses.

The Company also uses combined ratio to measure results for the Non-life segment. The combined ratio is the sum of the technical and other expense ratios.

The Company uses allocated underwriting result as a measure of underwriting performance for its Life and Health operations. This metric is defined as net premiums earned, other income or loss and allocated net investment income less life policy benefits, acquisition costs and other expenses.

The Company uses total capital, which is defined as total shareholders’ equity attributable to PartnerRe, long-term debt, senior notes and CENts, to manage the capital structure of the Company.

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 number of PartnerRe common shares

PartnerRe Ltd. Wellesley House, 5th Floor 90 Pitts Bay Road Pembroke, Bermuda HM 08	Telephone +1 441 292 0888 Fax +1 441 292 6080 www.partnerre.com

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News Release

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).

 

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PartnerRe Ltd. is a leading global reinsurer, providing multi-line reinsurance to insurance companies. The Company, through its wholly owned subsidiaries, also offers capital markets products that include weather and credit protection to financial, industrial and service companies. Risks reinsured include property, casualty, motor, agriculture, aviation/space, catastrophe, credit/surety, engineering, energy, marine, specialty property, specialty casualty, multi-line and other lines in its Non-life operations, mortality, longevity and accident and health in its Life and Health operations, and alternative risk products. For the year ended December 31, 2014, total revenues were $6.5 billion. At September 30, 2015, total assets were $22.0 billion, total capital was $7.6 billion and total shareholders’ equity attributable to PartnerRe was $6.8 billion.

PartnerRe on the Internet: www.partnerre.com

Forward-looking statements contained in this press release are based on the Company’s assumptions and expectations concerning future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. PartnerRe’s forward-looking statements could be affected by numerous foreseeable and unforeseeable events and developments such as exposure to catastrophe, or other large property and casualty losses, credit, interest, currency and other risks associated with the Company’s investment portfolio, adequacy of reserves, levels and pricing of new and renewal business achieved, changes in accounting policies, risks associated with implementing business strategies, and other factors identified in the Company’s filings with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking information contained herein, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. The Company disclaims any obligation to publicly update or revise any forward-looking information or statements.

 

Contacts:		PartnerRe Ltd.		Sard Verbinnen & Co.
		(441) 292-0888		(212) 687-8080
		Investor Contact: Robin Sidders		Drew Brown/Daniel Goldstein
		Media Contact: Celia Powell

 

PartnerRe Ltd. Wellesley House, 5th Floor 90 Pitts Bay Road Pembroke, Bermuda HM 08	Telephone +1 441 292 0888 Fax +1 441 292 6080 www.partnerre.com

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PartnerRe Ltd.

Consolidated Statements of Operations and Comprehensive (Loss) Income

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

	For the three months ended September 30, 2015				For the three months ended September 30, 2014				For the nine months ended September 30, 2015				For the nine months ended September 30, 2014
Revenues
Gross premiums written	$	1,267,961			$	1,361,280			$	4,448,907			$	4,695,327
Net premiums written	$	1,190,393			$	1,342,690			$	4,165,912			$	4,499,849
Decrease (increase) in unearned premiums	221,737				213,924				(191,235		)		(336,384		)
Net premiums earned	1,412,130				1,556,614				3,974,677				4,163,465
Net investment income	117,054				118,176				341,877				365,010
Net realized and unrealized investment (losses) gains	(133,017		)		(34,420		)		(273,107		)		273,468
Other income	3,056				2,223				7,584				11,892
Total revenues	1,399,223				1,642,593				4,051,031				4,813,835
Expenses
Losses and loss expenses and life policy benefits	804,196				959,543				2,390,394				2,592,847
Acquisition costs	346,520				321,756				905,774				888,937
Other expenses (1) (2)	415,818				108,615				670,334				327,149
Interest expense	12,249				12,241				36,742				36,719
Amortization of intangible assets	6,768				7,003				20,303				21,007
Net foreign exchange losses (gains)	22,413				(8,206		)		15,657				(10,900		)
Total expenses	1,607,964				1,400,952				4,039,204				3,855,759
(Loss) income before taxes and interest in (losses) earnings of equity method investments	(208,741		)		241,641				11,827				958,076
Income tax expense	17,170				45,617				82,990				186,363
Interest in (losses) earnings of equity method investments	(3,231		)		5,294				1,564				16,283
Net (loss) income	(229,142		)		201,318				(69,599		)		787,996
Net loss (income) attributable to noncontrolling interests	5				(4,920		)		(2,531		)		(9,914		)
Net (loss) income attributable to PartnerRe	(229,137		)		196,398				(72,130		)		778,082
Preferred dividends	14,184				14,184				42,551				42,551
Net (loss) income attributable to PartnerRe common shareholders	$	(243,321	)		$	182,214			$	(114,681	)		$	735,531
Operating earnings attributable to PartnerRe common shareholders	$	211,583			$	226,660			$	474,614			$	537,078
Comprehensive (loss) income attributable to PartnerRe	$	(267,720	)		$	198,578			$	(106,874	)		$	781,602
Earnings and dividends per share data attributable to PartnerRe common shareholders:
Basic operating earnings	$	4.42			$	4.58			$	9.95			$	10.64
Net realized and unrealized investment (losses) gains, net of tax	(2.54		)		(0.72		)		(5.00		)		4.05
Net foreign exchange losses, net of tax	(0.33		)		(0.24		)		(0.77		)		(0.32		)
Interest in (losses) earnings of equity method investments, net of tax	(0.05		)		0.06				0.02				0.21
Amalgamation termination fee and reimbursement of expenses (2)	(6.58		)		—				(6.60		)		—
Basic net (loss) income	$	(5.08	)		$	3.68			$	(2.40	)		$	14.58
Weighted average number of common shares outstanding	47,866,040				49,514,980				47,722,833				50,461,749
Diluted operating earnings (1)	$	4.42			$	4.47			$	9.95			$	10.42
Net realized and unrealized investment (losses) gains, net of tax	(2.54		)		(0.70		)		(5.00		)		3.95
Net foreign exchange losses, net of tax	(0.33		)		(0.23		)		(0.77		)		(0.31		)
Interest in (losses) earnings of equity method investments, net of tax	(0.05		)		0.06				0.02				0.20
Amalgamation termination fee and reimbursement of expenses (2)	(6.58		)		—				(6.60		)		—
Diluted net (loss) income	$	(5.08	)		$	3.60			$	(2.40	)		$	14.26
Weighted average number of common shares and common share equivalents outstanding	47,866,040				50,681,325				47,722,833				51,566,134
Dividends declared per common share	$	0.70			$	0.67			$	2.10			$	2.01
(1) Other expenses for the three months and nine months ended September 30, 2015 include $7 million and $47 million, respectively, of aggregate expenses related to the Axis and Exor transactions, pre-tax, or $0.15 and $0.98, respectively, per diluted share, pre-tax. In addition, other expenses for the nine months ended September 30, 2015 include $25 million, pre-tax, related to the negotiated earn-out consideration paid to the former shareholders of Presidio Reinsurance Group, Inc., or $0.53 per diluted share, pre-tax.
(2) Other expenses for the three months and nine months ended September 30, 2015 include the amalgamation termination fee and reimbursement of expenses of $315 million, or $6.58 and $6.60, respectively, per diluted share.

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PartnerRe Ltd.
Consolidated Balance Sheets
(Expressed in thousands of U.S. dollars, except per share and parenthetical share and per share data)
(Unaudited)   

	September 30,				December 31,
	2015				2014
Assets
Investments:
Fixed maturities, at fair value	$	13,026,249			$	13,918,745
Short-term investments, at fair value	100,365				25,678
Equities, at fair value	1,004,116				1,056,514
Other invested assets	344,720				298,827
Total investments	14,475,450				15,299,764
Funds held – directly managed	595,677				608,853
Cash and cash equivalents	1,256,304				1,313,468
Accrued investment income	142,892				158,737
Reinsurance balances receivable	3,079,002				2,454,850
Reinsurance recoverable on paid and unpaid losses	329,834				246,158
Funds held by reinsured companies	671,572				765,905
Deferred acquisition costs	684,380				661,186
Deposit assets	83,729				92,973
Net tax assets	72,257				6,876
Goodwill	456,380				456,380
Intangible assets	139,301				159,604
Other assets	38,450				45,603
Total assets	$	22,025,228			$	22,270,357
Liabilities
Unpaid losses and loss expenses	$	9,522,225			$	9,745,806
Policy benefits for life and annuity contracts	2,123,028				2,050,107
Unearned premiums	1,934,360				1,750,607
Other reinsurance balances payable	288,402				182,395
Deposit liabilities	42,336				70,325
Net tax liabilities	231,223				240,989
Accounts payable, accrued expenses and other	285,316				304,728
Debt related to senior notes	750,000				750,000
Debt related to capital efficient notes	70,989				70,989
Total liabilities	15,247,879				15,165,946
Shareholders’ Equity
Common shares (par value $1.00; issued: 2015 and 2014, 87,237,220 shares)	87,237				87,237
Preferred shares (par value $1.00; issued and outstanding: 2015 and 2014, 34,150,000 shares; aggregate liquidation value: 2015 and 2014, $853,750)	34,150				34,150
Additional paid-in capital	3,971,974				3,949,665
Accumulated other comprehensive loss	(68,827		)		(34,083		)
Retained earnings	6,019,786				6,270,811
Common shares held in treasury, at cost (2015, 39,335,464 shares; 2014, 39,400,936 shares)	(3,269,183		)		(3,258,870		)
Total shareholders’ equity attributable to PartnerRe	6,775,137				7,048,910
Noncontrolling interests	2,212				55,501
Total shareholders’ equity	6,777,349				7,104,411
Total liabilities and shareholders’ equity	$	22,025,228			$	22,270,357
Diluted Book Value Per Common Share and Common Share Equivalents Outstanding (1) (2)	$	120.67			$	126.21
Diluted Tangible Book Value Per Common Share and Common Share Equivalents Outstanding (1) (2)	$	109.46			$	114.76
Number of Common Shares and Common Share Equivalents Outstanding (2)	49,070,138				49,087,412

(1)	Excludes the aggregate liquidation value of preferred shares (2015 and 2014, $853,750) and noncontrolling interests (2015, $2,212; 2014, $55,501).

(2)	Common share and common share equivalents outstanding are calculated using the Treasury Method for all potentially dilutive shares.

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PartnerRe Ltd.
Segment Information
(Expressed in millions of U.S. dollars)

(Unaudited) 

	For the three months ended September 30, 2015
	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	$	351			$	153			$	393			$	57			$	954			$	314			$	—			$	1,268
Net premiums written	$	335			$	153			$	391			$	13			$	892			$	298			$	—			$	1,190
Decrease in unearned premiums	73				33				13				99				218				4				—				222
Net premiums earned	$	408			$	186			$	404			$	112			$	1,110			$	302			$	—			$	1,412
Losses and loss expenses and life policy benefits	(182		)		(122		)		(224		)		(28		)		(556		)		(248		)		—				(804		)
Acquisition costs	(137		)		(50		)		(112		)		(10		)		(309		)		(38		)		—				(347		)
Technical result	$	89			$	14			$	68			$	74			$	245			$	16			$	—			$	261
Other income																	—				3				—				3
Other expenses																	(55		)		(16		)		(345		)		(416		)
Underwriting result																	$	190			$	3			n/a				$	(152	)
Net investment income																					15				102				117
Allocated underwriting result (1)																					$	18			n/a				n/a
Net realized and unrealized investment losses																									(133		)		(133		)
Interest expense																									(12		)		(12		)
Amortization of intangible assets																									(7		)		(7		)
Net foreign exchange losses																									(22		)		(22		)
Income tax expense																									(17		)		(17		)
Interest in losses of equity method investments																									(3		)		(3		)
Net loss																									n/a				$	(229	)
Loss ratio (2)	44.7		%		65.8		%		55.5		%		24.9		%		50.1		%
Acquisition ratio (3)	33.4				26.9				27.7				8.7				27.8
Technical ratio (4)	78.1		%		92.7		%		83.2		%		33.6		%		77.9		%
Other expense ratio (5)																	4.9
Combined ratio (6)																	82.8		%
	For the three months ended September 30, 2014
	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			$	162			$	432			$	59			$	1,025			$	336			$	—			$	1,361
Net premiums written	$	372			$	164			$	428			$	55			$	1,019			$	325			$	(1	)		$	1,343
Decrease in unearned premiums	52				38				20				98				208				6				—				214
Net premiums earned	$	424			$	202			$	448			$	153			$	1,227			$	331			$	(1	)		$	1,557
Losses and loss expenses and life policy benefits	(247		)		(123		)		(279		)		(39		)		(688		)		(272		)		—				(960		)
Acquisition costs	(106		)		(56		)		(105		)		(17		)		(284		)		(38		)		—				(322		)
Technical result	$	71			$	23			$	64			$	97			$	255			$	21			$	(1	)		$	275
Other (loss) income																	(1		)		2				1				2
Other expenses																	(62		)		(17		)		(29		)		(108		)
Underwriting result																	$	192			$	6			n/a				$	169
Net investment income																					14				104				118
Allocated underwriting result (1)																					$	20			n/a				n/a
Net realized and unrealized investment losses																									(34		)		(34		)
Interest expense																									(12		)		(12		)
Amortization of intangible assets																									(7		)		(7		)
Net foreign exchange gains																									8				8
Income tax expense																									(46		)		(46		)
Interest in earnings of equity method investments																									5				5
Net income																									n/a				$	201
Loss ratio (2)	58.2		%		61.1		%		62.3		%		25.2		%		56.1		%
Acquisition ratio (3)	24.9				27.6				23.5				11.7				23.1
Technical ratio (4)	83.1		%		88.7		%		85.8		%		36.9		%		79.2		%
Other expense ratio (5)																	5.0
Combined ratio (6)																	84.2		%

(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 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 expense ratio is obtained by dividing other expenses by net premiums earned.

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

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PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

	For the nine months ended September 30, 2015
	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	$	1,251			$	630			$	1,226			$	370			$	3,477			$	972			$	—			$	4,449
Net premiums written	$	1,207			$	621			$	1,153			$	261			$	3,242			$	924			$	—			$	4,166
Increase in unearned premiums	(25		)		(102		)		(10		)		(47		)		(184		)		(7		)		—				(191		)
Net premiums earned	$	1,182			$	519			$	1,143			$	214			$	3,058			$	917			$	—			$	3,975
Losses and loss expenses and life policy benefits	(650		)		(362		)		(593		)		(38		)		(1,643		)		(748		)		1				(2,390		)
Acquisition costs	(341		)		(139		)		(307		)		(17		)		(804		)		(102		)		—				(906		)
Technical result	$	191			$	18			$	243			$	159			$	611			$	67			$	1			$	679
Other income																	—				4				3				7
Other expenses																	(162		)		(47		)		(461		)		(670		)
Underwriting result																	$	449			$	24			n/a				$	16
Net investment income																					45				297				342
Allocated underwriting result (1)																					$	69			n/a				n/a
Net realized and unrealized investment losses																									(273		)		(273		)
Interest expense																									(37		)		(37		)
Amortization of intangible assets																									(20		)		(20		)
Net foreign exchange losses																									(16		)		(16		)
Income tax expense																									(83		)		(83		)
Interest in earnings of equity method investments																									1				1
Net loss																									n/a				$	(70	)
Loss ratio (2)	55.0		%		69.8		%		51.9		%		17.8		%		53.7		%
Acquisition ratio (3)	28.8				26.8				26.8				8.1				26.3
Technical ratio (4)	83.8		%		96.6		%		78.7		%		25.9		%		80.0		%
Other expense ratio (5)																	5.3
Combined ratio (6)																	85.3		%
	For the nine months ended September 30, 2014
	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	$	1,302			$	682			$	1,348			$	412			$	3,744			$	951			$	—			$	4,695
Net premiums written	$	1,291			$	672			$	1,250			$	370			$	3,583			$	918			$	(1	)		$	4,500
Increase in unearned premiums	(99		)		(104		)		(42		)		(78		)		(323		)		(14		)		—				(337		)
Net premiums earned	$	1,192			$	568			$	1,208			$	292			$	3,260			$	904			$	(1	)		$	4,163
Losses and loss expenses and life policy benefits	(747		)		(319		)		(749		)		(38		)		(1,853		)		(740		)		—				(2,593		)
Acquisition costs	(299		)		(162		)		(283		)		(34		)		(778		)		(111		)		—				(889		)
Technical result	$	146			$	87			$	176			$	220			$	629			$	53			$	(1	)		$	681
Other income																	1				6				5				12
Other expenses																	(187		)		(52		)		(88		)		(327		)
Underwriting result																	$	443			$	7			n/a				$	366
Net investment income																					45				320				365
Allocated underwriting result (1)																					$	52			n/a				n/a
Net realized and unrealized investment gains																									273				273
Interest expense																									(36		)		(36		)
Amortization of intangible assets																									(21		)		(21		)
Net foreign exchange gains																									11				11
Income tax expense																									(186		)		(186		)
Interest in earnings of equity method investments																									16				16
Net income																									n/a				$	788
Loss ratio (2)	62.6		%		56.2		%		62.1		%		12.9		%		56.8		%
Acquisition ratio (3)	25.1				28.5				23.4				11.5				23.9
Technical ratio (4)	87.7		%		84.7		%		85.5		%		24.4		%		80.7		%
Other expense ratio (5)																	5.7
Combined ratio (6)																	86.4		%

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		Exhibit 99.2

                                    

 

  

PartnerRe Ltd.

Financial Supplement

Financial Information

as at September 30, 2015

(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 - September 30, 2015

Table of Contents

	Page
Regulation G
Life Value in Force
Consolidated Financial Statements
Consolidated Statements of Operations	1-2
Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Cash Flows	4-5
Consolidated Statements of Comprehensive (Loss) Income	6
Segment Information
For the three months ended September 30, 2015 and 2014	7-8
For the nine months ended September 30, 2015 and 2014	9-10
Non-life segment	11-12
North America sub-segment	13-14
Global (Non-U.S.) P&C sub-segment	15-16
Global Specialty sub-segment	17-18
Catastrophe sub-segment	19-20
Life and Health segment	21-22
Corporate and Other	23-24
Distribution of Premiums
Distribution of Premiums by line of business, geography and production source	25-26
Distribution of Premiums by reinsurance type for the Non-life sub-segment	27-28
Investments
Investment Portfolio	29
Distribution of Corporate Bonds	30
Distribution of Equities	31
Distribution of Mortgage/Asset-Backed Securities	32
Other Invested Assets including Private Markets and Derivative Exposures	33
Funds Held - Directly Managed Portfolio	34
Distribution of Corporate Bonds - Funds Held - Directly Managed Portfolio	35
Composition of Net Investment Income and Net Realized and Unrealized Investment (Losses) Gains	36-37
Composition of Net Investment Income and Net Realized and Unrealized Investment Gains (Losses) on Funds Held - Directly Managed Portfolio	38-39
Loss Reserves
Analysis of Unpaid Losses and Loss Expenses	40-41
Analysis of Policy Benefits for Life and Annuity Contracts	42-43
Reserve Development	44-45
Natural Catastrophe Probable Maximum Losses (PMLs) - Single Occurrence Estimated Net PML Exposure	46
Reconciliation of GAAP and non-GAAP measures	47-50
Diluted Book Value per Common Share - Treasury Stock Method	51
Diluted Book Value and Diluted Tangible Book Value per Common Share - Rollforward	52-54

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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, the interest in earnings (losses) of equity method 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), certain withholding taxes on intercompany dividends (included in other expenses) and the amalgamation termination fee and reimbursement of expenses paid to Axis Capital (included in other expenses), 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 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.

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.

Life Value In Force

The Company calculates Value in Force (VIF) for its Life portfolio, which represents the value of the Life portfolio that is not recognized in the Consolidated Balance Sheets prepared under generally accepted accounting principles in the United States (U.S. GAAP). Accordingly, there is no corresponding measure that is prepared in accordance with U.S. GAAP. Management believes that this is useful information for investors, analysts, rating agencies and others. The Life VIF calculation includes the business written in the Company’s Life and Health segment, except for the PartnerRe Health business.

The Company’s Life VIF calculation uses market consistent techniques, but primarily differs from a full Market Consistent Embedded Value (MCEV) calculation, as defined in the European Insurance CFO Forum MCEV principles, due to: (i) different methodologies used; and ii) the Life VIF is only a component of MCEV and, specifically, the tangible assets backing the liabilities are not considered in the Company’s calculation.

The Company’s Life VIF, which is calculated on a going concern basis, is the sum of:

•

present value of future profits - which is defined as the net present value of shareholders’ projected after-tax cash flows from the in-force business on a best-estimate assumption basis. The discount rates used reflect currency-specific market yields on zero coupon government bonds at given durations and are applied to projected deterministic cash flows and to calculate risk-free investment returns. The best-estimate is defined as median biometric assumptions and does not include any provision for adverse deviation. The Company attributes no value to future new business or renewals of short-term business. Allocated inflated-adjusted expenses are projected on a best estimate basis;

•	cost of non-hedgeable risks - which is defined as the cost of holding capital for non-hedgeable financial and non-hedgeable non-financial risks, such as a mortality deviation from shocks or changes in trends. The non-hedgeable risk capital has been determined using an internal economic capital model calibrated to a 99.6% Value at Risk (VaR) corresponding to a 1 in 250 year event;

•	frictional costs - which is defined as the cost of double taxation or investment management charges on assets backing required capital;

•

time value of options and guarantees (TVOG) - which is defined as the difference between the market value and the intrinsic value of the option calculated using stochastic techniques. The TVOG is significant to the guaranteed minimum death benefit (GMDB) portfolio where the Company covers death claims on savings plans, where the sum reinsured is the difference between the invested premium amount and the current fund value; and

•	cost of non-economic excess encumbered capital - which is defined as the cost of any encumbered capital in excess of economic capital required by local regulations.

Actuarial non-economic assumptions, such as current and future mortality, are based on the most recent experience available, combined with internal and industry benchmarks, including trend expectation where appropriate.

The Life VIF is sensitive to changes in assumptions. In particular, the Life VIF is sensitive to changes in yield curves that are used for discounting, changes in equity market value assumptions and implied volatilities.

The Company performs a detailed Life VIF calculation on an annual basis and performs a roll-forward approach on an interim quarterly basis.

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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
	September 30,				June 30,				March 31,				December 31,				September 30,
	2015				2015				2015				2014				2014
Revenues
Gross premiums written	$	1,267,961			$	1,432,012			$	1,748,933			$	1,236,676			$	1,361,280
Net premiums written	$	1,190,393			$	1,322,304			$	1,653,215			$	1,220,035			$	1,342,690
Decrease (increase) in unearned premiums	221,737				5,522				(418,493		)		225,695				213,924
Net premiums earned	1,412,130				1,327,826				1,234,722				1,445,730				1,556,614
Net investment income	117,054				120,192				104,631				114,686				118,176
Net realized and unrealized investment (losses) gains	(133,017		)		(255,734		)		115,645				98,329				(34,420		)
Other income	3,056				236				4,292				4,297				2,223
Total revenues	1,399,223				1,192,520				1,459,290				1,663,042				1,642,593
Expenses
Losses and loss expenses and life policy benefits	804,196				864,917				721,281				869,923				959,543
Acquisition costs	346,520				283,463				275,791				324,884				321,756
Other expenses (1) (2) (3)	415,818				129,766				124,750				122,539				108,615
Interest expense	12,249				12,248				12,245				12,244				12,241
Amortization of intangible assets	6,768				6,767				6,768				6,479				7,003
Net foreign exchange losses (gains)	22,413				6,391				(13,147		)		(7,301		)		(8,206		)
Total expenses	1,607,964				1,303,552				1,127,688				1,328,768				1,400,952
(Loss) income before taxes and interest in (losses) earnings of equity method investments	(208,741		)		(111,032		)		331,602				334,274				241,641
Income tax expense (benefit)	17,170				(13,844		)		79,665				53,143				45,617
Interest in (losses) earnings of equity method investments	(3,231		)		8,633				(3,838		)		(1,013		)		5,294
Net (loss) income	(229,142		)		(88,555		)		248,099				280,118				201,318
Net loss (income) attributable to noncontrolling interests	5				(354		)		(2,182		)		(3,225		)		(4,920		)
Net (loss) income attributable to PartnerRe	(229,137		)		(88,909		)		245,917				276,893				196,398
Preferred dividends	14,184				14,184				14,184				14,184				14,184
Net (loss) income attributable to PartnerRe common shareholders	$	(243,321	)		$	(103,093	)		$	231,733			$	262,709			$	182,214
Operating earnings attributable to PartnerRe common shareholders	$	211,583			$	112,494			$	150,536			$	218,340			$	226,660
Comprehensive (loss) income attributable to PartnerRe	$	(267,720	)		$	(81,913	)		$	242,760			$	251,528			$	198,578
Earnings and dividends per share data attributable to PartnerRe common shareholders:
Basic operating earnings	$	4.42			$	2.35			$	3.17			$	4.48			$	4.58
Net realized and unrealized investment (losses) gains, net of tax	(2.54		)		(4.55		)		2.11				1.69				(0.72		)
Net foreign exchange losses, net of tax	(0.33		)		(0.10		)		(0.33		)		(0.61		)		(0.24		)
Interest in (losses) earnings of equity method investments, net of tax	(0.05		)		0.14				(0.07		)		(0.04		)		0.06
Withholding tax on inter-company dividends, net of tax (2)	—				—				—				(0.13		)		—
Amalgamation termination fee and reimbursement of expenses (2)	(6.58		)		—				—				—				—
Basic net (loss) income	$	(5.08	)		$	(2.16	)		$	4.88			$	5.39			$	3.68
Weighted average number of common shares outstanding	47,866,040				47,773,371				47,525,344				48,707,096				49,514,980
Diluted operating earnings (1) (3)	$	4.42			$	2.35			$	3.09			$	4.37			$	4.47
Net realized and unrealized investment (losses) gains, net of tax	(2.54		)		(4.55		)		2.06				1.64				(0.70		)
Net foreign exchange losses, net of tax	(0.33		)		(0.10		)		(0.32		)		(0.60		)		(0.23		)
Interest in (losses) earnings of equity method investments, net of tax	(0.05		)		0.14				(0.07		)		(0.03		)		0.06
Withholding tax on inter-company dividends, net of tax (2)	—				—				—				(0.12		)		—
Amalgamation termination fee and reimbursement of expenses  (2)	(6.58		)		—				—				—				—
Diluted net (loss) income	$	(5.08	)		$	(2.16	)		$	4.76			$	5.26			$	3.60
Weighted average number of common shares and common share equivalents outstanding	47,866,040				47,773,371				48,710,228				49,958,224				50,681,325
Dividends declared per common share	$	0.70			$	0.70			$	0.70			$	0.67			$	0.67
(1) Includes costs related to the Axis and Exor transactions and the restructuring of the Company’s business support operations and Global Non-life operations. See page 23 for the expense and per share data.
(2) Withholding taxes on certain inter-company dividends and the amalgamation termination fee and reimbursement of expenses are included in other expenses.
(3) Other expenses for the three months ended June 30, 2015 include $25 million, pretax, related to the negotiated earn-out consideration paid to the former shareholders of Presidio Reinsurance Group, Inc, or $0.53 per diluted share.

1

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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 nine months ended									For the year ended
	September 30,				September 30,					December 31,				December 31,
	2015				2014					2014				2013
Revenues
Gross premiums written	$	4,448,907			$	4,695,327				$	5,932,003			$	5,569,706
Net premiums written	$	4,165,912			$	4,499,849				$	5,719,884			$	5,396,526
Increase in unearned premiums	(191,235		)		(336,384		)			(110,689		)		(198,316		)
Net premiums earned	3,974,677				4,163,465					5,609,195				5,198,210
Net investment income	341,877				365,010					479,696				484,367
Net realized and unrealized investment (losses) gains	(273,107		)		273,468					371,796				(160,735		)
Other income	7,584				11,892					16,190				16,565
Total revenues	4,051,031				4,813,835					6,476,877				5,538,407
Expenses
Losses and loss expenses and life policy benefits	2,390,394				2,592,847					3,462,770				3,157,808
Acquisition costs	905,774				888,937					1,213,822				1,077,628
Other expenses (1) (2) (3)	670,334				327,149					449,688				500,466
Interest expense	36,742				36,719					48,963				48,929
Amortization of intangible assets	20,303				21,007					27,486				27,180
Net foreign exchange losses (gains)	15,657				(10,900		)			(18,201		)		18,203
Total expenses	4,039,204				3,855,759					5,184,528				4,830,214
Income before taxes and interest in earnings of equity method investments	11,827				958,076					1,292,349				708,193
Income tax expense	82,990				186,363					239,506				48,416
Interest in earnings of equity method investments	1,564				16,283					15,270				13,665
Net (loss) income	(69,599		)		787,996					1,068,113				673,442
Net income attributable to noncontrolling interests	(2,531		)		(9,914		)			(13,139		)		(9,434		)
Net (loss) income attributable to PartnerRe	(72,130		)		778,082					1,054,974				664,008
Preferred dividends	42,551				42,551					56,735				57,861
Loss on redemption of preferred shares	—				—					—				9,135
Net (loss) income attributable to PartnerRe common shareholders	$	(114,681	)		$	735,531				$	998,239			$	597,012
Operating earnings attributable to PartnerRe common shareholders	$	474,614			$	537,078				$	755,418			$	721,733
Comprehensive (loss) income attributable to PartnerRe	$	(106,874	)		$	781,602				$	1,033,129			$	641,173
Earnings and dividends per share data attributable to PartnerRe common shareholders:
Basic operating earnings	$	9.95			$	10.64				$	15.10			$	13.03
Net realized and unrealized investment (losses) gains, net of tax	(5.00		)		4.05					5.73				(2.30		)
Net foreign exchange (losses) gains, net of tax	(0.77		)		(0.32		)			(0.92		)		0.05
Loss on redemption of preferred shares	—				—					—				(0.16		)
Interest in earnings of equity method investments, net of tax	0.02				0.21					0.17				0.16
Withholding tax on inter-company dividends, net of tax (2)	—				—					(0.12		)		—
Amalgamation termination fee and reimbursement of expenses (2)	(6.60		)		—					—				—
Basic net (loss) income	(2.40		)		14.58					19.96				10.78
Weighted average number of common shares outstanding	47,722,833				50,461,749					50,019,480				55,378,980
Diluted operating earnings (1) (3)	9.95				10.42					14.76				12.79
Net realized and unrealized investment (losses) gains, net of tax	(5.00		)		3.95					5.60				(2.25		)
Net foreign exchange (losses) gains, net of tax	(0.77		)		(0.31		)			(0.90		)		0.04
Loss on redemption of preferred shares	—				—					—				(0.16		)
Interest in earnings of equity method investments, net of tax	0.02				0.20					0.17				0.16
Withholding tax on inter-company dividends, net of tax (2)	—				—					(0.12		)		—
Amalgamation termination fee and reimbursement of expenses (2)	(6.60		)		—					—				—
Diluted net (loss) income	$	(2.40	)		$	14.26				$	19.51			$	10.58
Weighted average number of common shares and common share equivalents outstanding	47,722,833				51,566,134					51,174,225				56,448,105
Dividends declared per common share	$	2.10			$	2.01				$	2.68			$	2.56
(1) Includes costs related to the Axis and Exor transactions and the restructuring of the Company’s business support operations and Global Non-life operations. See page 24 for the expense and per share data.
(2) Withholding taxes on certain inter-company dividends and the amalgamation termination fee and reimbursement of expenses are included in other expenses.
(3) Other expenses for the nine months ended September 30, 2015 include $25 million, pretax, related to the negotiated earn-out consideration paid to the former shareholders of Presidio Reinsurance Group, Inc, or $0.53 per diluted share.

2

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PartnerRe Ltd.

Condensed Consolidated Balance Sheets

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

(Unaudited)

		September 30,						June 30,						March 31,						December 31,						September 30,							December 31,
		2015						2015						2015						2014						2014							2013
Assets
Total investments		$	14,475,450					$	14,715,834					$	15,038,946					$	15,299,764					$	15,288,212						$	15,148,883
Funds held - directly managed		595,677						594,870						592,609						608,853						650,374							785,768
Cash and cash equivalents		1,256,304						1,492,997						1,413,799						1,313,468						1,519,287							1,496,485
Accrued investment income		142,892						139,772						150,255						158,737						171,050							185,717
Reinsurance balances receivable		3,079,002						3,055,308						2,899,821						2,454,850						2,974,668							2,465,713
Reinsurance recoverable on paid and unpaid losses		329,834						342,074						290,018						246,158						317,071							308,892
Funds held by reinsured companies		671,572						688,358						659,058						765,905						808,686							843,081
Deferred acquisition costs		684,380						733,184						706,779						661,186						707,481							644,952
Goodwill		456,380						456,380						456,380						456,380						456,380							456,380
Intangible assets		139,301						146,069						152,836						159,604						166,083							187,090
Other assets		194,436						166,977						128,094						145,452						148,051							515,334
Total assets		$	22,025,228					$	22,531,823					$	22,488,595					$	22,270,357					$	23,207,343						$	23,038,295
Liabilities
Unpaid losses and loss expenses		$	9,522,225					$	9,549,398					$	9,401,397					$	9,745,806					$	10,264,001						$	10,646,318
Policy benefits for life and annuity contracts		2,123,028						2,087,369						1,996,519						2,050,107						2,113,463							1,974,133
Unearned premiums		1,934,360						2,207,674						2,159,446						1,750,607						2,048,550							1,723,767
Other reinsurance balances payable		288,402						234,175						188,941						182,395						237,175							202,549
Debt obligations		820,989						820,989						820,989						820,989						820,989							820,989
Other liabilities		558,875						550,075						666,475						616,042						656,909							904,380
Total liabilities		15,247,879						15,449,680						15,233,767						15,165,946						16,141,087							16,272,136
Total shareholders’ equity attributable to PartnerRe		6,775,137						7,079,926						7,197,145						7,048,910						7,013,980							6,709,532
Noncontrolling interests		2,212						2,217						57,683						55,501						52,276							56,627
Total shareholders’ equity		6,777,349						7,082,143						7,254,828						7,104,411						7,066,256							6,766,159
Total liabilities and shareholders’ equity		$	22,025,228					$	22,531,823					$	22,488,595					$	22,270,357					$	23,207,343						$	23,038,295
Diluted Book Value Per Common Share		$	120.67					$	127.24					$	129.86					$	126.21					$	121.95						$	109.26
Diluted Tangible Book Value Per Common Share		$	109.46					$	115.90					$	118.40					$	114.76					$	110.75						$	98.49
Number of Common Shares and Common Share Equivalents Outstanding		49,070,138						48,932,758						48,849,532						49,087,412						50,513,695							53,596,034
Capital Structure:
Senior notes (1)		$	750,000		10	%		$	750,000		9	%		$	750,000		9	%		$	750,000		9	%		$	750,000		9	%			$	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			11			853,750			11			853,750			11			853,750			11				853,750			11
Common shareholders’ equity attributable to PartnerRe		5,921,387			78			6,226,176			79			6,343,395			79			6,195,160			79			6,160,230			79				5,855,782			78
Total Capital		$	7,588,521		100	%		$	7,893,310		100	%		$	8,010,529		100	%		$	7,862,294		100	%		$	7,827,364		100	%			$	7,522,916		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.

3

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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
		September 30,				June 30,				March 31,				December 31,				September 30,
		2015				2015				2015				2014				2014
Net cash (used in) provided by operating activities:
Underwriting operations		$	77			$	30			$	44			$	158			$	240
Investment income		132				154				137				147				140
Taxes, foreign exchange and other (1)		(358		)		(66		)		(42		)		(36		)		(18		)
Net cash (used in) provided by operating activities		$	(149	)		$	118			$	139			$	269			$	362
Net cash (used in) provided by operating activities		$	(149	)		$	118			$	139			$	269			$	362
Net cash (used in) provided by investing activities		(33		)		56				115				(247		)		84
Net cash used in financing activities		(44		)		(100		)		(123		)		(215		)		(99		)
Effect of foreign exchange rate changes on cash		(10		)		5				(30		)		(13		)		(36		)
(Decrease) increase in cash and cash equivalents		(237		)		79				101				(206		)		311
Cash and cash equivalents - beginning of period		1,493				1,414				1,313				1,519				1,208
Cash and cash equivalents - end of period		$	1,256			$	1,493			$	1,414			$	1,313			$	1,519

(1) Taxes, foreign exchange and other for the three months ended September 30, 2015 include the amalgamation termination fee and reimbursement of expenses paid to Axis Capital of $315 million.

4

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PartnerRe Ltd.

Condensed Consolidated Statements of Cash Flows

(Expressed in millions of U.S. dollars)

(Unaudited)

 

	For the nine months ended									For the year ended
	September 30,				September 30,					December 31,				December 31,
	2015				2014					2014				2013
Net cash provided by operating activities:
Underwriting operations	$	151			$	339				$	497			$	337
Investment income	423				458					606				637
Taxes, foreign exchange and other (1)	(467		)		(214		)			(250		)		(147		)
Net cash provided by operating activities	$	107			$	583				$	853			$	827
Net cash provided by operating activities	$	107			$	583				$	853			$	827
Net cash provided by (used in) investing activities	138				(2		)			(250		)		418
Net cash used in financing activities	(267		)		(520		)			(736		)		(866		)
Effect of foreign exchange rate changes on cash	(35		)		(38		)			(50		)		(5		)
(Decrease) increase in cash and cash equivalents	(57		)		23					(183		)		374
Cash and cash equivalents - beginning of period	1,313				1,496					1,496				1,122
Cash and cash equivalents - end of period	$	1,256			$	1,519				$	1,313			$	1,496

(1) Taxes, foreign exchange and other for the nine months ended September 30, 2015 include the amalgamation termination fee and reimbursement of expenses paid to Axis Capital of $315 million.

5

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PartnerRe Ltd.

Consolidated Statements of Comprehensive (Loss) Income

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

	For the three months ended
	September 30,				June 30,				March 31,				December 31,				September 30,
	2015				2015				2015				2014				2014
Net (loss) income attributable to PartnerRe	$	(229,137	)		$	(88,909	)		$	245,917			$	276,893			$	196,398
Change in currency translation adjustment	(39,533		)		8,101				(2,504		)		(12,101		)		1,412
Change in net unrealized gains or losses on investments, net of tax	(213		)		(214		)		(217		)		(218		)		(221		)
Change in unfunded pension obligation, net of tax	1,163				(891		)		(436		)		(13,046		)		989
Comprehensive (loss) income attributable to PartnerRe	$	(267,720	)		$	(81,913	)		$	242,760			$	251,528			$	198,578

 

	For the nine months ended									For the year ended
	September 30,				September 30,					December 31,				December 31,
	2015				2014					2014				2013
Net (loss) income attributable to PartnerRe	$	(72,130	)		$	778,082				$	1,054,974			$	664,008
Change in currency translation adjustment	(33,936		)		3,209					(8,892		)		(31,778		)
Change in net unrealized gains or losses on investments, net of tax	(644		)		(668		)			(886		)		(918		)
Change in unfunded pension obligation, net of tax	(164		)		979					(12,067		)		9,861
Comprehensive (loss) income attributable to PartnerRe	$	(106,874	)		$	781,602				$	1,033,129			$	641,173

6

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PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

For the three months ended September 30, 2015
	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	$	351			$	153			$	393			$	57			$	954			$	314			$	—			$	1,268
Net premiums written	$	335			$	153			$	391			$	13			$	892			298				$	—			$	1,190
Decrease in unearned premiums	73				33				13				99				218				4				—				222
Net premiums earned	$	408			$	186			$	404			$	112			$	1,110			$	302			$	—			$	1,412
Losses and loss expenses and life policy benefits	(182		)		(122		)		(224		)		(28		)		(556		)		(248		)		—				(804		)
Acquisition costs	(137		)		(50		)		(112		)		(10		)		(309		)		(38		)		—				(347		)
Technical result	$	89			$	14			$	68			$	74			$	245			$	16			$	—			$	261
Other income																	—				3				—				3
Other expenses																	(55		)		(16		)		(345		)		(416		)
Underwriting result																	$	190			$	3			n/a				$	(152	)
Net investment income																					15				102				117
Allocated underwriting result (1)																					$	18			n/a				n/a
Net realized and unrealized investment losses																									(133		)		(133		)
Interest expense																									(12		)		(12		)
Amortization of intangible assets																									(7		)		(7		)
Net foreign exchange losses																									(22		)		(22		)
Income tax expense																									(17		)		(17		)
Interest in losses of equity method investments																									(3		)		(3		)
Net loss																									n/a				$	(229	)
Loss ratio (2)	44.7		%		65.8		%		55.5		%		24.9		%		50.1		%
Acquisition ratio (3)	33.4				26.9				27.7				8.7				27.8
Technical ratio (4)	78.1		%		92.7		%		83.2		%		33.6		%		77.9		%
Other expense ratio (5)																	4.9
Combined ratio (6)																	82.8		%

 

(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 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 expense ratio is obtained by dividing other expenses by net premiums earned.

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

7

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PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

 

For the three months ended September 30, 2014
	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			$	162			$	432			$	59			$	1,025			$	336			$	—			$	1,361
Net premiums written	$	372			$	164			$	428			$	55			$	1,019			$	325			$	(1	)		$	1,343
Decrease in unearned premiums	52				38				20				98				208				6				—				214
Net premiums earned	$	424			$	202			$	448			$	153			$	1,227			$	331			$	(1	)		$	1,557
Losses and loss expenses and life policy benefits	(247		)		(123		)		(279		)		(39		)		(688		)		(272		)		—				(960		)
Acquisition costs	(106		)		(56		)		(105		)		(17		)		(284		)		(38		)		—				(322		)
Technical result	$	71			$	23			$	64			$	97			$	255			$	21			$	(1	)		$	275
Other (loss) income																	(1		)		2				1				2
Other expenses																	(62		)		(17		)		(29		)		(108		)
Underwriting result																	$	192			$	6			n/a				$	169
Net investment income																					14				104				118
Allocated underwriting result (1)																					$	20			n/a				n/a
Net realized and unrealized investment losses																									(34		)		(34		)
Interest expense																									(12		)		(12		)
Amortization of intangible assets																									(7		)		(7		)
Net foreign exchange gains																									8				8
Income tax expense																									(46		)		(46		)
Interest in earnings of equity method investments																									5				5
Net income																									n/a				$	201
Loss ratio (2)	58.2		%		61.1		%		62.3		%		25.2		%		56.1		%
Acquisition ratio (3)	24.9				27.6				23.5				11.7				23.1
Technical ratio (4)	83.1		%		88.7		%		85.8		%		36.9		%		79.2		%
Other expense ratio (5)																	5.0
Combined ratio (6)																	84.2		%

8

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

 

For the nine months ended September 30, 2015
	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	$	1,251			$	630			$	1,226			$	370			$	3,477			$	972			$	—			$	4,449
Net premiums written	$	1,207			$	621			$	1,153			$	261			$	3,242			$	924			$	—			$	4,166
Increase in unearned premiums	(25		)		(102		)		(10		)		(47		)		(184		)		(7		)		—				(191		)
Net premiums earned	$	1,182			$	519			$	1,143			$	214			$	3,058			$	917			$	—			$	3,975
Losses and loss expenses and life policy benefits	(650		)		(362		)		(593		)		(38		)		(1,643		)		(748		)		1				(2,390		)
Acquisition costs	(341		)		(139		)		(307		)		(17		)		(804		)		(102		)		—				(906		)
Technical result	$	191			$	18			$	243			$	159			$	611			$	67			$	1			$	679
Other income																	—				4				3				7
Other expenses																	(162		)		(47		)		(461		)		(670		)
Underwriting result																	$	449			$	24			n/a				$	16
Net investment income																					45				297				342
Allocated underwriting result (1)																					$	69			n/a				n/a
Net realized and unrealized investment losses																									(273		)		(273		)
Interest expense																									(37		)		(37		)
Amortization of intangible assets																									(20		)		(20		)
Net foreign exchange losses																									(16		)		(16		)
Income tax expense																									(83		)		(83		)
Interest in earnings of equity method investments																									1				1
Net loss																									n/a				$	(70	)
Loss ratio (2)	55.0		%		69.8		%		51.9		%		17.8		%		53.7		%
Acquisition ratio (3)	28.8				26.8				26.8				8.1				26.3
Technical ratio (4)	83.8		%		96.6		%		78.7		%		25.9		%		80.0		%
Other expense ratio (5)																	5.3
Combined ratio (6)																	85.3		%

 

9

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

 

For the nine months ended September 30, 2014
	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	$	1,302			$	682			$	1,348			$	412			$	3,744			$	951			$	—			$	4,695
Net premiums written	$	1,291			$	672			$	1,250			$	370			$	3,583			$	918			$	(1	)		$	4,500
Increase in unearned premiums	(99		)		(104		)		(42		)		(78		)		(323		)		(14		)		—				(337		)
Net premiums earned	$	1,192			$	568			$	1,208			$	292			$	3,260			$	904			$	(1	)		$	4,163
Losses and loss expenses and life policy benefits	(747		)		(319		)		(749		)		(38		)		(1,853		)		(740		)		—				(2,593		)
Acquisition costs	(299		)		(162		)		(283		)		(34		)		(778		)		(111		)		—				(889		)
Technical result	$	146			$	87			$	176			$	220			$	629			$	53			$	(1	)		$	681
Other income																	1				6				5				12
Other expenses																	(187		)		(52		)		(88		)		(327		)
Underwriting result																	$	443			$	7			n/a				$	366
Net investment income																					45				320				365
Allocated underwriting result (1)																					$	52			n/a				n/a
Net realized and unrealized investment gains																									273				273
Interest expense																									(36		)		(36		)
Amortization of intangible assets																									(21		)		(21		)
Net foreign exchange gains																									11				11
Income tax expense																									(186		)		(186		)
Interest in earnings of equity method investments																									16				16
Net income																									n/a				$	788
Loss ratio (2)	62.6		%		56.2		%		62.1		%		12.9		%		56.8		%
Acquisition ratio (3)	25.1				28.5				23.4				11.5				23.9
Technical ratio (4)	87.7		%		84.7		%		85.5		%		24.4		%		80.7		%
Other expense ratio (5)																	5.7
Combined ratio (6)																	86.4		%

10

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

Non-life segment

 

	For the three months ended
	September 30,				June 30,				March 31,				December 31,				September 30,
	2015 (A)				2015				2015				2014				2014
Gross premiums written	$	954			$	1,098			$	1,425			$	923			$	1,025
Net premiums written	$	892			$	1,009			$	1,340			$	917			$	1,019
Net premiums earned	$	1,110			$	1,012			$	936			$	1,127			$	1,227
Losses and loss expenses	(556		)		(605		)		(481		)		(609		)		(688		)
Acquisition costs	(309		)		(253		)		(242		)		(288		)		(284		)
Technical result	$	245			$	154			$	213			$	230			$	255
Other income (loss)	—				—				—				2				(1		)
Other expenses	(55		)		(55		)		(52		)		(65		)		(62		)
Underwriting result	$	190			$	99			$	161			$	167			$	192
Loss ratio (2)	50.1		%		59.8		%		51.4		%		54.1		%		56.1		%
Acquisition ratio (3)	27.8				25.0				25.9				25.5				23.1
Technical ratio (4)	77.9		%		84.8		%		77.3		%		79.6		%		79.2		%
Other expense ratio (5)	4.9				5.5				5.5				5.7				5.0
Combined ratio (6)	82.8		%		90.3		%		82.8		%		85.3		%		84.2		%

 

(A)	Comparisons of net premiums written and net premiums earned between periods include the impact of foreign exchange variances. For the three months ended September 30, 2015, net premiums written and net premiums earned include foreign exchange impacts of $(57.1) million and $(70.0) million, respectively, compared to the three months ended September 30, 2014.

11

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

Non-life segment

 

	For the nine months ended									For the year ended
	September 30,				September 30,					December 31,				December 31,
	2015 (A)				2014					2014				2013
Gross premiums written	$	3,477			$	3,744				$	4,667			$	4,590
Net premiums written	$	3,242			$	3,583				$	4,500			$	4,427
Net premiums earned	$	3,058			$	3,260				$	4,387			$	4,235
Losses and loss expenses	(1,643		)		(1,853		)			(2,463		)		(2,400		)
Acquisition costs	(804		)		(778		)			(1,065		)		(953		)
Technical result	$	611			$	629				$	859			$	882
Other income	—				1					3				3
Other expenses	(162		)		(187		)			(252		)		(259		)
Underwriting result	$	449			$	443				$	610			$	626
Loss ratio (2)	53.7		%		56.8		%			56.1		%		56.7		%
Acquisition ratio (3)	26.3				23.9					24.3				22.5
Technical ratio (4)	80.0		%		80.7		%			80.4		%		79.2		%
Other expense ratio (5)	5.3				5.7					5.8				6.1
Combined ratio (6)	85.3		%		86.4		%			86.2		%		85.3		%

 

(A)	Comparisons of net premiums written and net premiums earned between periods include the impact of foreign exchange variances. For the nine months ended September 30, 2015, net premiums written and net premiums earned include foreign exchange impacts of $(193.5) million and $(181.1) million, respectively, compared to the nine months ended September 30, 2014.

12

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

North America sub-segment

 

	For the three months ended
	September 30,				June 30,				March 31,				December 31,				September 30,
	2015 (A)				2015				2015				2014				2014
Gross premiums written	$	351			$	427			$	473			$	340			$	372
Net premiums written	$	335			$	401			$	471			$	338			$	372
Net premiums earned	$	408			$	435			$	339			$	405			$	424
Losses and loss expenses	(182		)		(296		)		(172		)		(253		)		(247		)
Acquisition costs	(137		)		(111		)		(93		)		(102		)		(106		)
Technical result	$	89			$	28			$	74			$	50			$	71
Loss ratio (2)	44.7		%		68.1		%		50.7		%		62.5		%		58.2		%
Acquisition ratio (3)	33.4				25.4				27.5				25.1				24.9
Technical ratio (4)	78.1		%		93.5		%		78.2		%		87.6		%		83.1		%
Distribution of Net Premiums Written by Major Lines of Business:
Agriculture	21		%		31		%		30		%		26		%		22		%
Casualty	40				38				35				39				40
Credit/Surety	3				6				7				7				7
Motor	4				4				4				5				7
Multiline	6				8				10				8				6
Other	9				2				1				—				3
Property	17				11				13				15				15
Total	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 September 30, 2015, net premiums written and net premiums earned include foreign exchange impacts of $(2.8) million and $(4.1) million, respectively, compared to the three months ended September 30, 2014.

13

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

North America sub-segment

 

	For the nine months ended									For the year ended
	September 30,				September 30,					December 31,				December 31,
	2015 (A)				2014					2014				2013
Gross premiums written	$	1,251			$	1,302				$	1,642			$	1,601
Net premiums written	$	1,207			$	1,291				$	1,630			$	1,587
Net premiums earned	$	1,182			$	1,192				$	1,597			$	1,533
Losses and loss expenses	(650		)		(747		)			(1,000		)		(975		)
Acquisition costs	(341		)		(299		)			(401		)		(351		)
Technical result	$	191			$	146				$	196			$	207
Loss ratio (2)	55.0		%		62.6		%			62.6		%		63.6		%
Acquisition ratio (3)	28.8				25.1					25.1				22.9
Technical ratio (4)	83.8		%		87.7		%			87.7		%		86.5		%
Distribution of Net Premiums Written by Major Lines of Business:
Agriculture	28		%		28		%			28		%		30		%
Casualty	37				37					37				37
Credit/Surety	5				7					7				3
Motor	4				5					4				4
Multiline	8				8					8				6
Other	4				2					2				5
Property	14				13					14				15
Total	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 nine months ended September 30, 2015, net premiums written and net premiums earned include foreign exchange impacts of $(8.5) million and $(8.2) million, respectively, compared to the nine months ended September 30, 2014.

14

---

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
	September 30,				June 30,				March 31,			December 31,			September 30,
	2015 (A)				2015				2015			2014			2014
Gross premiums written	$	153			$	143			334			122			$	162
Net premiums written	$	153			$	137			331			122			$	164
Net premiums earned	$	186			$	159			174			200			$	202
Losses and loss expenses	(122		)		(121		)		(119	)		(119	)		(123		)
Acquisition costs	(50		)		(36		)		(52	)		(60	)		(56		)
Technical result	$	14			$	2			3			21			$	23
Loss ratio (2)	65.8		%		75.9		%		68.4	%		59.4	%		61.1		%
Acquisition ratio (3)	26.9				23.2				30.1			29.9			27.6
Technical ratio (4)	92.7		%		99.1		%		98.5	%		89.3	%		88.7		%
Distribution of Net Premiums Written by Major Lines of Business:
Casualty	8		%		10		%		10	%		7	%		7		%
Motor	42				34				36			48			43
Property	50				56				54			45			50
Total	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 September 30, 2015, net premiums written and net premiums earned include foreign exchange impacts of $(19.9) million and $(26.0) million, respectively, compared to the three months ended September 30, 2014.

15

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

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

 

	For the nine months ended									For the year ended
	September 30,				September 30,					December 31,				December 31,
	2015 (A)				2014					2014				2013
Gross premiums written	$	630			$	682				$	803			$	818
Net premiums written	$	621			$	672				$	794			$	811
Net premiums earned	$	519			$	568				$	768			$	743
Losses and loss expenses	(362		)		(319		)			(438		)		(373		)
Acquisition costs	(139		)		(162		)			(222		)		(196		)
Technical result	$	18			$	87				$	108			$	174
Loss ratio (2)	69.8		%		56.2		%			57.0		%		50.2		%
Acquisition ratio (3)	26.8				28.5					28.9				26.4
Technical ratio (4)	96.6		%		84.7		%			85.9		%		76.6		%
Distribution of Net Premiums Written by Major Lines of Business:
Casualty	10		%		9		%			8		%		9		%
Motor	37				38					40				37
Property	53				53					52				54
Total	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 nine months ended September 30, 2015, net premiums written and net premiums earned include foreign exchange impacts of $(73.0) million and $(66.7) million, respectively, compared to the nine months ended September 30, 2014.

16

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

Global Specialty sub-segment

 

	For the three months ended
	September 30,				June 30,				March 31,				December 31,				September 30,
	2015 (A)				2015				2015				2014				2014
Gross premiums written	$	393			$	406			$	427			$	448			$	432
Net premiums written	$	391			$	400			$	362			$	446			$	428
Net premiums earned	$	404			$	374			$	365			$	430			$	448
Losses and loss expenses	(224		)		(198		)		(170		)		(213		)		(279		)
Acquisition costs	(112		)		(102		)		(93		)		(117		)		(105		)
Technical result	$	68			$	74			$	102			$	100			$	64
Loss ratio (2)	55.5		%		53.0		%		46.7		%		49.5		%		62.3		%
Acquisition ratio (3)	27.7				27.2				25.4				27.4				23.5
Technical ratio (4)	83.2		%		80.2		%		72.1		%		76.9		%		85.8		%
Distribution of Net Premiums Written by Major Lines of Business:
Agriculture	13		%		13		%		15		%		12		%		11		%
Aviation/Space	9				13				11				15				13
Credit/Surety	15				13				14				14				16
Energy	4				3				4				5				5
Engineering	8				10				11				10				10
Marine	16				14				11				18				18
Multiline	12				11				12				8				8
Other	1				1				2				—				1
Specialty casualty	9				9				11				9				7
Specialty property	13				13				9				9				11
Total	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 September 30, 2015, net premiums written and net premiums earned include foreign exchange impacts of $(28.9) million and $(33.6) million, respectively, compared to the three months ended September 30, 2014.

17

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

Global Specialty sub-segment

 

	For the nine months ended									For the year ended
	September 30,				September 30,					December 31,				December 31,
	2015 (A)				2014					2014				2013
Gross premiums written	$	1,226			$	1,348				$	1,797			$	1,676
Net premiums written	$	1,153			$	1,250				$	1,696			$	1,579
Net premiums earned	$	1,143			$	1,208				$	1,638			$	1,506
Losses and loss expenses	(593		)		(749		)			(963		)		(920		)
Acquisition costs	(307		)		(283		)			(400		)		(362		)
Technical result	$	243			$	176				$	275			$	224
Loss ratio (2)	51.9		%		62.1		%			58.8		%		61.1		%
Acquisition ratio (3)	26.8				23.4					24.4				24.0
Technical ratio (4)	78.7		%		85.5		%			83.2		%		85.1		%
Distribution of Net Premiums Written by Major Lines of Business:
Agriculture	13		%		13		%			13		%		9		%
Aviation/Space	11				11					13				13
Credit/Surety	14				17					16				19
Energy	4				4					4				5
Engineering	10				10					10				14
Marine	14				16					17				19
Multiline	11				8					8				3
Other	1				1					—				—
Specialty casualty	10				10					10				9
Specialty property	12				10					9				9
Total	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 nine months ended September 30, 2015, net premiums written and net premiums earned include foreign exchange impacts of $(89.2) million and $(87.5) million, respectively, compared to the nine months ended September 30, 2014.

18

---

PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

Catastrophe sub-segment

 

	For the three months ended
	September 30,				June 30,				March 31,			December 31,			September 30,
	2015 (A)				2015				2015			2014			2014
Gross premiums written	$	57			$	122			191			13			$	59
Net premiums written	$	13			$	71			176			11			$	55
Net premiums earned	$	112			$	44			58			92			$	153
Losses and loss expenses	(28		)		10				(20	)		(24	)		(39		)
Acquisition costs	(10		)		(4		)		(4	)		(9	)		(17		)
Technical result	$	74			$	50			34			59			$	97
Loss ratio (2)	24.9		%		(21.5		)%		33.7	%		26.5	%		25.2		%
Acquisition ratio (3)	8.7				8.2				7.0			9.1			11.7
Technical ratio (4)	33.6		%		(13.3		)%		40.7	%		35.6	%		36.9		%

 

(A)	Comparisons of net premiums written and net premiums earned between periods include the impact of foreign exchange variances. For the three months ended September 30, 2015, net premiums written and net premiums earned include foreign exchange impacts of $(5.5) million and $(6.4) million, respectively, compared to the three months ended September 30, 2014.

19

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PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

Catastrophe sub-segment

 

	For the nine months ended									For the year ended
	September 30,				September 30,					December 31,				December 31,
	2015 (A)				2014					2014				2013
Gross premiums written	$	370			$	412				$	425			$	495
Net premiums written	$	261			$	370				$	380			$	450
Net premiums earned	$	214			$	292				$	384			$	453
Losses and loss expenses	(38		)		(38		)			(62		)		(132		)
Acquisition costs	(17		)		(34		)			(42		)		(44		)
Technical result	$	159			$	220				$	280			$	277
Loss ratio (2)	17.8		%		12.9		%			16.1		%		29.0		%
Acquisition ratio (3)	8.1				11.5					11.0				9.7
Technical ratio (4)	25.9		%		24.4		%			27.1		%		38.7		%

 

(A)	Comparisons of net premiums written and net premiums earned between periods include the impact of foreign exchange variances. For the nine months ended September 30, 2015, net premiums written and net premiums earned include foreign exchange impacts of $(22.8) million and $(18.7) million, respectively, compared to the nine months ended September 30, 2014.

20

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PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

Life and Health segment

 

	For the three months ended
	September 30,				June 30,				March 31,				December 31,				September 30,
	2015 (A)				2015				2015				2014				2014
Gross premiums written	$	314			$	334			$	324			$	314			$	336
Net premiums written	$	298			$	313			$	313			$	302			$	325
Net premiums earned	$	302			$	316			$	299			$	318			$	331
Life policy benefits	(248		)		(260		)		(240		)		(261		)		(272		)
Acquisition costs	(38		)		(30		)		(34		)		(37		)		(38		)
Technical result	$	16			$	26			$	25			$	20			$	21
Other income	3				—				1				2				2
Other expenses	(16		)		(16		)		(15		)		(17		)		(17		)
Underwriting result	$	3			$	10			$	11			$	5			$	6
Net investment income	15				16				14				16				14
Allocated underwriting result (1)	$	18			$	26			$	25			$	21			$	20
Distribution of Net Premiums Written by Major Lines of Business:
Accident and Health	30		%		26		%		27		%		25		%		24		%
Longevity	25				30				22				25				26
Mortality	45				44				51				50				50
Total	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 September 30, 2015, net premiums written and net premiums earned include foreign exchange impacts of $(30.2) million and $(30.9) million, respectively, compared to the three months ended September 30, 2014.

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PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

Life and Health segment

 

	For the nine months ended									For the year ended
	September 30,				September 30,					December 31,				December 31,
	2015 (A)				2014					2014				2013
Gross premiums written	$	972			$	951				$	1,265			$	972
Net premiums written	$	924			$	918				$	1,220			$	964
Net premiums earned	$	917			$	904				$	1,222			$	957
Life policy benefits	(748		)		(740		)			(1,000		)		(760		)
Acquisition costs	(102		)		(111		)			(149		)		(125		)
Technical result	$	67			$	53				$	73			$	72
Other income	4				6					8				11
Other expenses	(47		)		(52		)			(68		)		(71		)
Underwriting result	$	24			$	7				$	13			$	12
Net investment income	45				45					60				61
Allocated underwriting result (1)	$	69			$	52				$	73			$	73
Distribution of Net Premiums Written by Major Lines of Business:
Accident and Health	27		%		23		%			23		%		15		%
Longevity	26				24					25				26
Mortality	47				53					52				59
Total	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 nine months ended September 30, 2015, net premiums written and net premiums earned include foreign exchange impacts of $(80.7) million and $(79.9) million, respectively, compared to the nine months ended September 30, 2014.

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PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

Corporate and Other

 

	For the three months ended
	September 30,				June 30,				March 31,				December 31,				September 30,
	2015				2015				2015				2014				2014
Technical result	$	—			$	—			$	—			$	1			$	(1	)
Other income	—				—				3				—				1
Corporate expenses - amalgamation termination fee and reimbursement of expenses	(315		)		—				—				—				—
Corporate expenses - amalgamation related costs (1)	(7		)		(9		)		(31		)		—				—
Corporate expenses - costs of restructuring (2)	—				—				—				(6		)		(3		)
Corporate expenses (3)	(23		)		(50		)		(27		)		(35		)		(26		)
Net investment income	102				104				91				99				104
Net realized and unrealized investment (losses) gains	(133		)		(256		)		116				98				(34		)
Interest expense	(12		)		(12		)		(12		)		(12		)		(12		)
Amortization of intangible assets	(7		)		(7		)		(7		)		(6		)		(7		)
Net foreign exchange (losses) gains	(22		)		(6		)		13				7				8
Income tax (expense) benefit	(17		)		14				(80		)		(53		)		(46		)
Interest in (losses) earnings of equity method investments	(3		)		8				(4		)		(1		)		5

 

(1)	The amalgamation related costs relate to Axis and Exor transactions and consists of severance and transaction costs. During the three months ended September 30, 2015, June 30, 2015 and March 31, 2015, these costs had a per diluted share impact, pre-tax, of $0.15, $0.19 and $0.63, respectively.

(2)

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, 2014 and the three months ended September 30, 2014, these costs predominantly comprised of facility exit costs. For the three months ended December 31, 2014 and the three months ended September 30, 2014, these costs had a per diluted share impact, pre-tax, of $0.11 and $0.07, respectively.

(3)	Corporate expenses for three months ended June 30, 2015 include $25 million, pre-tax, related to the negotiated earn-out consideration paid to the former shareholders of Presidio Reinsurance Group, Inc, or $0.53 per diluted share, pre-tax.

23

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PartnerRe Ltd.

Segment Information

(Expressed in millions of U.S. dollars)

(Unaudited)

Corporate and Other

 

	For the nine months ended									For the year ended
	September 30,				September 30,					December 31,				December 31,
	2015				2014					2014				2013
Technical result	$	1			$	(1	)			$	—			$	8
Other income	3				5					5				3
Corporate expenses - amalgamation termination fee and reimbursement of expenses	(315		)		—					—				—
Corporate expenses - amalgamation related costs (1)	(47		)		—					—				—
Corporate expenses - costs of restructuring (2)	—				(5		)			(11		)		(58		)
Corporate expenses (3)	(99		)		(82		)			(118		)		(105		)
Other expenses	—				(1		)			(1		)		(7		)
Net investment income	297				320					420				423
Net realized and unrealized investment (losses) gains	(273		)		273					372				(161		)
Interest expense	(37		)		(36		)			(49		)		(49		)
Amortization of intangible assets	(20		)		(21		)			(27		)		(27		)
Net foreign exchange (losses) gains	(16		)		11					18				(18		)
Income tax expense	(83		)		(186		)			(239		)		(49		)
Interest in earnings of equity method investments	1				16					15				14

 

(1)	The amalgamation related costs relate to with Axis and Exor transactions and consists of severance and transaction costs. During the nine months ended September 30, 2015, these costs had a per diluted share impact, pre-tax, of $0.98.

(2)

The costs of restructuring relate to the Company’s reorganization of its business support and Global Non-life operations. During the nine months ended September 30, 2014 and the year ended December 31, 2014, these costs predominantly comprised of facility exit costs. During the year ended December 31, 2013, these costs predominantly comprised of severance costs related to the Company's voluntary and involuntary termination plans, and to a lesser extent, facility exit costs. For the nine months ended September 30, 2014, the year ended December 31, 2014 and the year ended December 31, 2013, these costs had a per diluted share impact, pre-tax, of $0.10, $0.21, and $1.03, respectively.

(3)	Corporate expenses for nine months ended September 30, 2015 include $25 million, pre-tax, related to the negotiated earn-out consideration paid to the former shareholders of Presidio Reinsurance Group, Inc, or $0.53 per diluted share, pre-tax.

24

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PartnerRe Ltd.

Distribution of Premiums

(Unaudited) 

	For the three months ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2015			2015			2015			2014			2014
Distribution of Net Premiums Written by Line of Business:
Non-life
Property and casualty
Casualty	12	%		13	%		12	%		11	%		12	%
Motor	7			5			8			6			7
Multiline and other	8			6			6			5			5
Property	11			9			15			9			10
Specialty
Agriculture	10			13			12			12			10
Aviation/Space	3			4			2			6			4
Catastrophe	1			5			11			1			4
Credit/Surety	6			6			5			7			7
Energy	2			1			1			2			2
Engineering	3			3			2			4			3
Marine	5			4			2			6			6
Specialty casualty	3			3			3			3			2
Specialty property	4			4			2			3			4
Life and Health	25			24			19			25			24
	100	%		100	%		100	%		100	%		100	%
Distribution of Gross Premiums Written by Geography:
Asia, Australia and New Zealand	14	%		13	%		10	%		10	%		13	%
Europe	35			33			43			38			39
Latin America, Caribbean and Africa	11			9			9			14			10
North America	40			45			38			38			38
	100	%		100	%		100	%		100	%		100	%
Distribution of Gross Premiums Written by Production Source:
Broker	72	%		73	%		69	%		68	%		69	%
Direct	28			27			31			32			31
	100	%		100	%		100	%		100	%		100	%

25

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PartnerRe Ltd.

Distribution of Premiums

(Unaudited)

 

	For the nine months ended							For the year ended
	September 30,			September 30,				December 31,			December 31,
	2015			2014				2014			2013
Distribution of Net Premiums Written by Line of Business:
Non-life
Property and casualty
Casualty	12	%		12	%			12	%		12	%
Motor	7			7				7			7
Multiline and other	7			5				5			4
Property	12			12				11			12
Specialty
Agriculture	12			12				12			11
Aviation/Space	3			3				4			4
Catastrophe	6			8				6			8
Credit/Surety	5			6				7			6
Energy	1			1				1			2
Engineering	3			3				3			4
Marine	4			5				5			6
Specialty casualty	3			3				3			3
Specialty property	3			3				3			3
Life and Health	22			20				21			18
	100	%		100	%			100	%		100	%
Distribution of Gross Premiums Written by Geography:
Asia, Australia and New Zealand	12	%		12	%			11	%		11	%
Europe	37			40				40			40
Latin America, Caribbean and Africa	10			9				10			10
North America	41			39				39			39
	100	%		100	%			100	%		100	%
Distribution of Gross Premiums Written by Production Source:
Broker	71	%		70	%			69	%		71	%
Direct	29			30				31			29
	100	%		100	%			100	%		100	%

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PartnerRe Ltd.

Distribution of Premiums

(Unaudited)

 

	For the three months ended
	September 30,			June 30,			March 31,			December 31,			September 30,
	2015			2015			2015			2014			2014
Distribution of Gross Premiums Written by Reinsurance Type for the Non-life sub-segment:
North America
Non-Proportional	15	%		14	%		25	%		11	%		16	%
Proportional	85			86			75			89			84
Total	100	%		100	%		100	%		100	%		100	%
Global (Non-U.S.) P&C
Non-Proportional	10	%		11	%		34	%		4	%		12	%
Proportional	90			89			66			96			88
Total	100	%		100	%		100	%		100	%		100	%
Global Specialty
Non-Proportional	12	%		15	%		24	%		10	%		13	%
Proportional	88			85			76			90			87
Total	100	%		100	%		100	%		100	%		100	%
Catastrophe
Non-Proportional	96	%		97	%		97	%		113	%		97	%
Proportional	4			3			3			(13	)		3
Total	100	%		100	%		100	%		100	%		100	%
Non-life total
Non-Proportional	18	%		23	%		36	%		11	%		19	%
Proportional	82			77			64			89			81
Total	100	%		100	%		100	%		100	%		100	%

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PartnerRe Ltd.

Distribution of Premiums

(Unaudited)

 

	For the nine months ended							For the year ended
	September 30,			September 30,				December 31,			December 31,
	2015			2014				2014			2013
Distribution of Gross Premiums Written by Reinsurance Type for the Non-life sub-segment:
North America
Non-Proportional	18	%		18	%			16	%		18	%
Proportional	82			82				84			82
Total	100	%		100	%			100	%		100	%
Global (Non-U.S.) P&C
Non-Proportional	23	%		25	%			22	%		21	%
Proportional	77			75				78			79
Total	100	%		100	%			100	%		100	%
Global Specialty
Non-Proportional	17	%		19	%			17	%		19	%
Proportional	83			81				83			81
Total	100	%		100	%			100	%		100	%
Catastrophe
Non-Proportional	97	%		97	%			98	%		98	%
Proportional	3			3				2			2
Total	100	%		100	%			100	%		100	%
Non-life total
Non-Proportional	27	%		28	%			25	%		28	%
Proportional	73			72				75			72
Total	100	%		100	%			100	%		100	%

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PartnerRe Ltd.

Investment Portfolio

(Expressed in millions of U.S. dollars)

(Unaudited)

	September 30,							June 30,							March 31,							December 31,							September 30,								December 31,
	2015							2015							2015							2014							2014								2013
Investments:
Fixed maturities
U.S. government	$	2,148			15	%		$	2,282			16	%		$	2,241			15	%		$	2,277			15	%		$	2,160			14	%			$	1,599			11	%
U.S. government sponsored enterprises	48				—			53				—			58				—			39				—			25				—				25				—
U.S. states, territories and municipalities	760				5			682				5			621				4			531				3			321				2				124				1
Non-U.S. sovereign government, supranational and government related	1,288				9			1,492				10			1,557				10			1,976				13			2,209				14				2,354				15
Corporates	5,366				37			5,510				37			5,495				37			5,604				37			5,706				37				6,049				40
Mortgage/asset-backed securities	3,416				24			3,331				23			3,440				23			3,492				23			3,530				24				3,442				23
Total fixed maturities	13,026				90			13,350				91			13,412				89			13,919				91			13,951				91				13,593				90
Short-term investments	101				1			19				—			20				—			25				—			37				—				14				—
Equities	1,004				7			1,007				7			1,320				9			1,057				7			1,001				7				1,221				8
Other invested assets	345				2			340				2			287				2			299				2			299				2				321				2
Total investments	$	14,476			100	%		$	14,716			100	%		$	15,039			100	%		$	15,300			100	%		$	15,288			100	%			$	15,149			100	%
Cash and cash equivalents	1,256							1,493							1,414							1,313							1,519								1,496
Total investments and cash	$	15,732						$	16,209						$	16,453						$	16,613						$	16,807							$	16,645
Maturity distribution:
One year or less	$	548			4	%		$	239			2	%		$	257			2	%		$	313			2	%		$	401			3	%			$	378			3
More than one year through five years	4,152				32			4,703				35			4,694				35			5,169				37			5,279				38				5,057				37
More than five years through ten years	3,433				26			3,642				27			3,669				27			3,719				27			3,747				27				3,962				29
More than ten years	1,578				12			1,454				11			1,372				10			1,251				9			1,031				7				768				6
Subtotal	9,711				74			10,038				75			9,992				74			10,452				75			10,458				75				10,165				75
Mortgage/asset-backed securities	3,416				26			3,331				25			3,440				26			3,492				25			3,530				25				3,442				25
Total	$	13,127			100	%		$	13,369			100	%		$	13,432			100	%		$	13,944			100	%		$	13,988			100	%			$	13,607			100	%
Credit quality by market value:
AAA	10			%				11			%				10			%				11			%				12			%					14			%
AA	44							44							45							46							44								41
A	19							19							19							19							19								21
BBB	18							18							17							16							17								16
Below Investment Grade/Unrated	9							8							9							8							8								8
	100			%				100			%				100			%				100			%				100			%					100			%
Expected average duration (1)	3.5			Yrs				3.6			Yrs				3.5			Yrs				3.7			Yrs				3.5			Yrs					3.0			Yrs
Average yield to maturity at market (1)	2.8			%				2.7			%				2.3			%				2.4			%				2.3			%					2.5			%
Average credit quality	A							A							A							A							A								A

 (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)

 

September 30, 2015
	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	$	1,092,572			20.4		%		6.9		%		0.8		%
Consumer noncyclical	797,984				14.9				5.1				0.2
Utilities	618,919				11.5				3.9				0.3
Communications	571,700				10.7				3.6				0.4
Industrials	482,551				9.0				3.1				0.2
Consumer cyclical	471,359				8.8				3.0				0.3
Energy	412,739				7.7				2.6				0.2
Insurance	307,611				5.7				2.0				0.2
Technology	139,111				2.6				0.9				0.2
Basic materials	132,480				2.5				0.8				0.1
Real estate investment trusts	124,179				2.3				0.8				0.1
Catastrophe bonds	93,505				1.7				0.6				0.1
Government guaranteed corporate debt	66,328				1.2				0.4				0.4
Longevity and mortality bonds	48,024				0.9				0.3				0.2
Diversified	7,218				0.1				0.1				—
Total Corporate bonds	$	5,366,280			100.0		%		34.1		%
Finance sector - Corporate bonds
Banks	$	639,228			11.9		%		4.1		%
Investment banking and brokerage	283,304				5.3				1.8
Financial services	117,482				2.2				0.7
Commercial and consumer finance	28,652				0.5				0.2
Other	23,906				0.5				0.1
Total finance sector - Corporate bonds	$	1,092,572			20.4		%		6.9		%
	AAA				AA				A				BBB				Non-Investment Grade/Unrated				Total
Credit quality of finance sector - Corporate bonds
Banks	$	—			$	105,517			$	333,563			$	182,044			$	18,104			$	639,228
Investment banking and brokerage	—				—				262,349				19,814				1,141				283,304
Financial services	—				99,451				11,630				4,908				1,493				117,482
Commercial and consumer finance	—				—				—				24,675				3,977				28,652
Other	—				—				—				23,906				—				23,906
Total finance sector - Corporate bonds	$	—			$	204,968			$	607,542			$	255,347			$	24,715			$	1,092,572
% of total	—		%		19		%		56		%		23		%		2		%		100		%

Concentration of investment risk

The top 10 Corporate bond issuers account for 15.1% of the Company’s total corporate bonds. The single largest issuer accounts for 2.3% of the Company’s total Corporate bonds.

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PartnerRe Ltd.

Distribution of Equities

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

	September 30, 2015
	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	$	180,387			22.1	%		1.2	%		0.2	%
Consumer noncyclical	115,462				14.1			0.7			0.1
Finance	101,111				12.4			0.6			0.1
Insurance	99,773				12.2			0.6			0.5
Energy	72,880				8.9			0.5			0.1
Industrials	64,073				7.8			0.4			0.1
Technology	53,780				6.6			0.3			0.1
Communications	45,592				5.6			0.3			—
Consumer cyclical	44,401				5.4			0.3			—
Utilities	24,616				3.0			0.2			—
Basic materials	15,881				1.9			0.1			—
Diversified	124				—			—			—
Total	$	818,080			100.0	%		5.2	%
Mutual funds and exchange traded funds (ETFs)
Funds and ETFs holding equities	179,195							1.1
Funds holding fixed income securities	6,841							0.1
Total Equities	$	1,004,116						6.4	%

Concentration of investment risk

The single largest fund in funds and ETFs holding equities is a SPDR Equity Index ETF, which accounts for 10.6% 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 8.8% 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 September 30, 2015
	GNMA				GSEs				AAA				AA				A				BBB				Non-Investment Grade/Unrated				Total
U.S. Asset-Backed Securities	$	—			$	—			$	133,578			$	120,069			$	94,482			$	—			$	418,681			$	766,810
U.S. Collaterized Mortgage Obligations	—				2,301				2,775				—				—				—				1				5,077
U.S. Mortgage Backed Securities (MBS)	411,516				1,389,485				—				—				—				—				—				1,801,001
U.S. Commercial Mortgage Backed Securities (CMBS)	5,375				—				6,671				9,925				18,612				1,782				1,918				44,283
U.S. MBS Interest Only	29,400				74,485				3,537				—				—				—				13,970				121,392
	$	446,291			$	1,466,271			$	146,561			$	129,994			$	113,094			$	1,782			$	434,570			$	2,738,563
Non-U.S. Asset-Backed Securities	$	—			$	—			$	159,239			$	57,880			$	58,198			$	3,240			$	37,222			$	315,779
Non-U.S. Collaterized Mortgage Obligations	—				—				144,954				35,433				44,080				—				—				224,467
Non-U.S. Commercial Mortgage Backed Securities (CMBS)	—				—				7,527				—				—				—				—				7,527
Non-U.S. Mortgage Backed Securities (MBS)	—				—				129,338				—				—				—				—				129,338
	$	—			$	—			$	441,058			$	93,313			$	102,278			$	3,240			$	37,222			$	677,111
Total mortgage/asset-backed securities	$	446,291			$	1,466,271			$	587,619			$	223,307			$	215,372			$	5,022			$	471,792			$	3,415,674
Corporate Securities	—				47,411				—				—				—				—				—				47,411
Total	$	446,291			$	1,513,682			$	587,619			$	223,307			$	215,372			$	5,022			$	471,792			$	3,463,085
% of total	13		%		44		%		17		%		6		%		6		%		—		%		14		%		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 $301.3 million and a carrying value of $2.2 million at September 30, 2015 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

 

	September 30, 2015																					June 30, 2015									March 31, 2015
	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	$	141,451			$	—			$	141,451			$	—			$	141,451				$	116,963			$	116,963				$	100,058			$	100,058
Principal Finance - Derivative Exposure Assumed (2)	—				(26,640		)		(26,640		)		42,458				15,818					(17,977		)		24,507					(22,131		)		20,373
Insurance-Linked Securities	—				8,523				8,523				195,188				203,711					(345		)		205,630					(320		)		205,360
Strategic Investments	221,661				—				221,661				—				221,661					231,654				231,654					210,562				210,562
Total other invested assets - Private Markets Exposure Assumed	363,112				(18,117		)		344,995				237,646				582,641					330,295				578,754					288,169				536,353
Other (3)	8,621				(8,896		)		(275		)											9,972									(1,573		)
Total other invested assets	$	371,733			$	(27,013	)		$	344,720												$	340,267								$	286,596

 

(1)

The total net exposures originated in Private Markets are $1,520 million at September 30, 2015 ($1,547 million and $1,548 million at June 30, 2015 and March 31, 2015, respectively). In addition to the net exposures listed above of $583 million at September 30, 2015 ($579 million and $536 million at June 30, 2015 and March 31, 2015, respectively), the Company has the following other net exposures originated in Private Markets:

•	Principal Finance: $668 million of assets listed under Investments - Fixed Maturities and $9 million listed under Investments - Equities for a total exposure of $834 million at September 30, 2015 ($822 million and $853 million at June 30, 2015 and March 31, 2015, respectively).

•	Insurance-Linked Securities: $146 million of bonds listed under Investments - Fixed Maturities and $5 million listed under Investment - Equities for a total exposure of $355 million at September 30, 2015 ($356 million and $348 million at June 30, 2015 and March 31, 2015, respectively).

•	Strategic Investments: $107 million of assets listed under Investments - Equities and $2 million of assets listed under Other Assets for a total exposure of $331 million at September 30, 2015 ($369 million and $347 million at June 30, 2015 and March 31, 2015, 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)

 

	September 30, 2015							June 30, 2015							March 31, 2015							December 31, 2014							September 30, 2014								December 31, 2013
Investments:
Fixed maturities
U.S. government	$	111			27	%		$	110			26	%		$	107			25	%		$	105			22	%		$	104			22	%			$	108			19	%
U.S. government sponsored enterprises	54				13			48				11			49				11			49				10			45				9				50				9
Non-U.S. sovereign government, supranational and government related	124				30			110				26			111				26			128				27			123				26				137				25
Corporates	108				26			137				32			145				33			177				38			192				40				249				44
Total fixed maturities	397				96	%		405				95	%		412				95	%		459				97	%		464				97				544				97
Short-term investments	6				1			7				2			11				2			—				—			—				—				2				—
Other invested assets	12				3			13				3			12				3			14				3			15				3				15				3
Total investments	$	415			100	%		$	425			100	%		$	435			100	%		$	473			100	%		$	479			100	%			$	561			100	%
Cash and cash equivalents	64							58							54							42							53								85
Total investments and cash	$	479						$	483						$	489						$	515						$	532							$	646
Accrued investment income	6							5							5							6							6								7
Other funds held assets/liabilities	111							107							99							88							112								133
Total funds held - directly managed	$	596						$	595						$	593						$	609						$	650							$	786
Maturity distribution:
One year or less	$	64			16	%		$	85			21	%		$	71			17	%		$	77			16	%		$	87			19	%			$	89			16	%
More than one year through five years	210				52			204				49			210				50			241				53			258				56				331				61
More than five years through ten years	108				27			123				30			142				33			141				31			117				25				109				20
More than ten years	21				5			—				—			—				—			—				—			2				—				17				3
Total	$	403			100	%		$	412			100	%		$	423			100	%		$	459			100	%		$	464			100	%			$	546			100	%
Credit quality by market value:
AAA	12			%				11			%				11			%				12			%				12			%					13			%
AA	67							66							66							64							64								58
A	14							16							16							17							17								22
BBB	7							7							7							7							7								7
	100			%				100			%				100			%				100			%				100			%					100			%
Expected average duration	3.7			Yrs				3.3			Yrs				3.3			Yrs				3.4			Yrs				3.1			Yrs					2.9			Yrs
Average yield to maturity at market	1.0			%				1.1			%				0.8			%				1.0			%				0.9			%					1.2			%
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)

 

		September 30, 2015
		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		$	33,437			31.0		%		7.0		%		1.1		%
Consumer noncyclical		16,907				15.7				3.5				1.0
Utilities		15,605				14.5				3.3				1.0
Energy		14,930				13.8				3.1				1.9
Communications		11,200				10.4				2.3				0.8
Industrials		4,067				3.8				0.8				0.7
Technology		3,851				3.6				0.8				0.8
Real estate investment trusts		3,206				3.0				0.7				0.7
Government guaranteed corporate debt		2,279				2.1				0.5				0.4
Basic materials		1,420				1.3				0.3				0.3
Consumer cyclical		924				0.8				0.2				0.2
Total Corporate bonds		$	107,826			100.0		%		22.5		%
Finance sector - Corporate bonds
Banks		$	25,085			23.3		%		5.2		%
Financial services		8,352				7.7				1.8
Total finance sector - Corporate bonds		$	33,437			31.0		%		7.0		%
		AAA				AA				A				BBB				Total
Credit quality of finance sector - Corporate bonds
Banks		$	16,087			$	—			$	8,998			$	—			$	25,085
Financial services		—				4,224				4,128				—				8,352
Total finance sector - Corporate bonds		$	16,087			$	4,224			$	13,126			$	—			$	33,437
% of total		48		%		13		%		39		%		—		%		100		%

Concentration of investment risk

The Top 10 corporate bond issuers account for 45.0% of the Company’s total corporate bonds within the Funds Held - Directly Managed Portfolio. The single largest issuer accounts for 8.6% 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 (Losses) Gains

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

	For the three months ended
	September 30,				June 30,				March 31,				December 31,				September 30,
	2015				2015				2015				2014				2014
Fixed maturities	$	108,554			$	109,749			$	102,619			$	109,468			$	108,290
Short-term investments, cash and cash equivalents	288				151				140				190				216
Equities	8,818				10,385				5,915				6,720				11,999
Funds held and other	7,648				9,227				4,623				8,996				7,493
Funds held - directly managed	2,595				3,132				3,022				3,194				3,485
Investment expenses	(10,849		)		(12,452		)		(11,688		)		(13,882		)		(13,307		)
Net investment income (1)	$	117,054			$	120,192			$	104,631			$	114,686			$	118,176
Net realized investment (losses) gains on fixed maturities and short-term investments	$	(3,095	)		$	12,597			$	51,858			$	26,699			$	37,809
Net realized investment gains on equities	20,440				31,852				20,365				30,334				33,894
Net realized (losses) gains on other invested assets	(25,785		)		(13,730		)		(7,749		)		(19,887		)		7,019
Change in net unrealized (losses) gains on other invested assets	(12,473		)		16,056				(21,640		)		(11,843		)		(6,538		)
Change in net unrealized investment (losses) gains on fixed maturities and short-term investments	(19,375		)		(253,918		)		76,971				61,085				(75,537		)
Change in net unrealized investment (losses) gains on equities	(94,869		)		(45,523		)		(7,016		)		17,052				(31,093		)
Net other realized and unrealized investment gains (losses)	—				3,286				—				(5,801		)		575
Net realized and unrealized investment gains (losses) on funds held - directly managed	2,140				(6,354		)		2,856				690				(549		)
Net realized and unrealized investment (losses) gains	$	(133,017	)		$	(255,734	)		$	115,645			$	98,329			$	(34,420	)

 

(1)	Comparisons of net investment income between periods include the impact of foreign exchange variances. For the three months ended September 30, 2015, net investment income includes foreign exchange impacts of $(4.9) million compared to the three months ended September 30, 2014.

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PartnerRe Ltd.

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

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

	For the nine months ended									For the year ended
	September 30,				September 30,					December 31,				December 31,
	2015				2014					2014				2013
Fixed maturities	$	320,922			$	333,946				$	443,414			$	446,299
Short-term investments, cash and cash equivalents	579				678					868				1,886
Equities	25,118				33,606					40,326				32,989
Funds held and other	21,498				24,196					33,192				34,215
Funds held - directly managed	8,749				10,647					13,841				20,502
Investment expenses	(34,989		)		(38,063		)			(51,945		)		(51,524		)
Net investment income (1)	$	341,877			$	365,010				$	479,696			$	484,367
Net realized investment gains on fixed maturities and short-term investments	$	61,360			$	94,036				$	120,734			$	118,575
Net realized investment gains on equities	72,657				68,399					98,733				75,217
Net realized (losses) gains on other invested assets	(47,264		)		(799		)			(20,686		)		20,497
Change in net unrealized (losses) gains on other invested assets	(18,057		)		(46,337		)			(58,180		)		56,652
Change in net unrealized investment (losses) gains on fixed maturities and short-term investments	(196,322		)		167,696					228,781				(525,787		)
Change in net unrealized investment (losses) gains on equities	(147,408		)		(14,447		)			2,605				118,010
Net other realized and unrealized investment gains (losses)	3,286				2,177					(3,624		)		(2,107		)
Net realized and unrealized investment (losses) gains on funds held - directly managed	(1,358		)		2,743					3,433				(21,792		)
Net realized and unrealized investment (losses) gains	$	(273,106	)		$	273,468				$	371,796			$	(160,735	)

 

(1)	Comparisons of net investment income between periods include the impact of foreign exchange variances. For the nine months ended September 30, 2015, net investment income includes foreign exchange impacts of $(13.6) million compared to the nine months ended September 30, 2014.

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PartnerRe Ltd.

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

Funds Held - Directly Managed Portfolio

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

	For the three months ended
	September 30,				June 30,				March 31,				December 31,				September 30,
	2015				2015				2015				2014				2014
Fixed maturities	$	2,622			$	2,607			$	2,809			$	3,000			$	3,128
Short-term investments, cash and cash equivalents	13				21				14				11				8
Other	136				637				368				399				527
Investment expenses	(176		)		(133		)		(169		)		(216		)		(178		)
Net investment income	$	2,595			$	3,132			$	3,022			$	3,194			$	3,485
Net realized investment gains (losses) on fixed maturities and short-term investments	$	57			$	(46	)		$	170			$	194			$	(32	)
Net realized investment gains (losses) on other invested assets	243				(10		)		146				53				—
Change in net unrealized investment gains (losses) on fixed maturities and short-term investments	1,831				(6,111		)		2,358				946				(209		)
Change in net unrealized investment gains (losses) on other invested assets	9				(187		)		182				(503		)		(308		)
Net realized and unrealized investment gains (losses) on funds held - directly managed	$	2,140			$	(6,354	)		$	2,856			$	690			$	(549	)

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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 nine months ended									For the year ended
	September 30,				September 30,					December 31,				December 31,
	2015				2014					2014				2013
Fixed maturities	$	8,038			$	9,789				$	12,789			$	18,804
Short-term investments, cash and cash equivalents	48				48					59				1,246
Other	1,141				1,362					1,760				1,287
Investment expenses	(478		)		(552		)			(767		)		(835		)
Net investment income	$	8,749			$	10,647				$	13,841			$	20,502
Net realized investment gains on fixed maturities and short-term investments	$	181			$	1,766				$	1,959			$	6,021
Net realized investment gains on other invested assets	379				—					53				19
Change in net unrealized investment (losses) gains on fixed maturities and short-term investments	(1,922		)		991					1,938				(24,176		)
Change in net unrealized investment gains (losses) on other invested assets	4				(14		)			(517		)		(3,656		)
Net realized and unrealized investment (losses) gains on funds held - directly managed	$	(1,358	)		$	2,743				$	3,433			$	(21,792	)

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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
	September 30,				June 30,				March 31,				December 31,				September 30,
	2015				2015				2015				2014				2014
Reconciliation of beginning and ending liability for unpaid losses and loss expenses:
Gross liability at beginning of period	$	9,549,398			$	9,401,397			$	9,745,806			$	10,264,001			$	10,399,775
Reinsurance recoverable at beginning of period	(202,839		)		(196,981		)		(214,349		)		(249,338		)		(244,543		)
Net liability at beginning of period	9,346,559				9,204,416				9,531,457				10,014,663				10,155,232
Net incurred losses related to:
Current year	802,518				778,416				705,176				779,029				853,508
Prior years	(245,936		)		(173,368		)		(224,337		)		(169,443		)		(165,763		)
	556,582				605,048				480,839				609,586				687,745
Change in reserve agreement (1)	—				—				13,108				(16,977		)		—
Net losses paid	(518,556		)		(533,577		)		(471,676		)		(882,812		)		(513,127		)
Effects of foreign exchange rate changes	(65,026		)		70,672				(349,312		)		(193,003		)		(315,187		)
Net liability at end of period	9,319,559				9,346,559				9,204,416				9,531,457				10,014,663
Reinsurance recoverable at end of period	202,666				202,839				196,981				214,349				249,338
Gross liability at end of period	$	9,522,225			$	9,549,398			$	9,401,397			$	9,745,806			$	10,264,001
Breakdown of gross liability at end of period:
Case reserves	$	3,875,962			$	3,960,022			$	3,975,276			$	4,236,038			$	4,420,406
Additional case reserves	194,265				220,023				229,363				253,890				321,607
Incurred but not reported reserves	5,451,998				5,369,353				5,196,758				5,255,878				5,521,988
Gross liability at end of period	$	9,522,225			$	9,549,398			$	9,401,397			$	9,745,806			$	10,264,001
Breakdown of gross liability at end of period by Non-life sub-segment:
North America	$	3,437,238			$	3,439,780			$	3,317,662			$	3,307,948			$	3,541,332
Global (Non-U.S.) P&C	2,044,735				2,053,451				2,021,090				2,175,965				2,261,968
Global Specialty	3,685,691				3,676,958				3,620,345				3,769,758				3,924,377
Catastrophe	354,561				379,209				442,300				492,135				536,324
Gross liability at end of period	$	9,522,225			$	9,549,398			$	9,401,397			$	9,745,806			$	10,264,001
Unrecognized time value of non-life reserves (2)	$	430,596			$	490,714			$	369,059			$	474,258			$	603,499
Non-life paid loss ratio data:
Non-life paid losses to incurred losses ratio	93.2		%		88.2		%		98.1		%		144.8		%		74.6		%
Non-life paid losses to net premiums earned ratio	46.7		%		52.7		%		50.4		%		78.3		%		41.9		%

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

(2) The unrecognized time value of non-life reserves represents the difference between the recorded gross/net liability for unpaid losses and loss expenses and the amount of gross/net liability for unpaid losses and loss expenses that would be recorded if the underlying unpaid losses and loss expenses were discounted. The unrecognized time value, or discount, in the non-life reserves is calculated by applying appropriate risk-free rates by currency and duration to the underlying unpaid losses and loss expenses.

40

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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 nine months ended									As at and for the year ended
	September 30,				September 30,					December 31,				December 31,
	2015				2014					2014				2013
Reconciliation of beginning and ending liability for unpaid losses and loss expenses:
Gross liability at beginning of period	$	9,745,806			$	10,646,318				$	10,646,318			$	10,709,371
Reinsurance recoverable at beginning of period	(214,349		)		(267,384		)			(267,384		)		(291,330		)
Net liability at beginning of period	9,531,457				10,378,934					10,378,934				10,418,041
Net incurred losses related to:
Current year	2,286,111				2,343,953					3,122,981				3,118,755
Prior years	(643,641		)		(490,970		)			(660,413		)		(721,499		)
	1,642,470				1,852,983					2,462,568				2,397,256
Change in reserve agreement (1)	13,108				(8,435		)			(25,412		)		(49,544		)
Net losses paid	(1,523,809		)		(1,915,738		)			(2,798,549		)		(2,401,559		)
Effects of foreign exchange rate changes	(343,667		)		(293,081		)			(486,084		)		14,740
Net liability at end of period	9,319,559				10,014,663					9,531,457				10,378,934
Reinsurance recoverable at end of period	202,666				249,338					214,349				267,384
Gross liability at end of period	$	9,522,225			$	10,264,001				$	9,745,806			$	10,646,318
Breakdown of gross liability at end of period:
Case reserves	$	3,875,962			$	4,420,406				$	4,236,038			$	4,663,164
Additional case reserves	194,265				321,607					253,890				403,145
Incurred but not reported reserves	5,451,998				5,521,988					5,255,878				5,580,009
Gross liability at end of period	$	9,522,225			$	10,264,001				$	9,745,806			$	10,646,318
Breakdown of gross liability at end of period by Non-life sub-segment:
North America	$	3,437,238			$	3,541,332				$	3,307,948			$	3,535,946
Global (Non-U.S.) P&C	2,044,735				2,261,968					2,175,965				2,444,129
Global Specialty	3,685,691				3,924,377					3,769,758				3,951,543
Catastrophe	354,561				536,324					492,135				714,700
Gross liability at end of period	$	9,522,225			$	10,264,001				$	9,745,806			$	10,646,318
Unrecognized time value of non-life reserves (2)	$	430,596			$	603,499				$	474,258			$	733,528
Non-life paid loss ratio data:
Non-life paid losses to incurred losses ratio	92.8		%		103.4		%			113.6		%		100.2		%
Non-life paid losses to net premiums earned ratio	49.8		%		58.8		%			63.8		%		56.6		%

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

(2) The unrecognized time value of non-life reserves represents the difference between the recorded gross/net liability for unpaid losses and loss expenses and the amount of gross/net liability for unpaid losses and loss expenses that would be recorded if the underlying unpaid losses and loss expenses were discounted. The unrecognized time value, or discount, in the non-life reserves is calculated by applying appropriate risk-free rates by currency and duration to the underlying unpaid losses and loss expenses.

41

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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
	September 30,				June 30,				March 31,				December 31,				September 30,
	2015				2015				2015				2014				2014
Reconciliation of beginning and ending policy benefits for life and annuity contracts:
Gross liability at beginning of period	$	2,087,369			$	1,996,519			$	2,050,107			$	2,113,463			$	2,127,412
Reinsurance recoverable at beginning of period	(36,752		)		(29,247		)		(29,495		)		(25,433		)		(23,703		)
Net liability at beginning of period	2,050,617				1,967,272				2,020,612				2,088,030				2,103,709
Net incurred losses related to:
Current year	254,401				272,752				254,450				269,438				273,394
Prior years	(6,787		)		(12,883		)		(14,008		)		(9,101		)		(1,596		)
	247,614				259,869				240,442				260,337				271,798
Net losses paid	(182,255		)		(231,702		)		(166,408		)		(252,950		)		(178,847		)
Effects of foreign exchange rate changes	(31,692		)		55,178				(127,374		)		(74,805		)		(108,630		)
Net liability at end of period	2,084,284				2,050,617				1,967,272				2,020,612				2,088,030
Reinsurance recoverable at end of period	38,744				36,752				29,247				29,495				25,433
Gross liability at end of period	$	2,123,028			$	2,087,369			$	1,996,519			$	2,050,107			$	2,113,463
Life value in force	$	175,600			$	146,100			$	109,900			$	145,100			$	180,200

42

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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 nine months ended									As at and for the year ended
	September 30,				September 30,					December 31,				December 31,
	2015				2014					2014				2013
Reconciliation of beginning and ending policy benefits for life and annuity contracts:
Gross liability at beginning of period	$	2,050,107			$	1,974,133				$	1,974,133			$	1,813,244
Reinsurance recoverable at beginning of period	(29,495		)		(7,022		)			(7,022		)		(20,684		)
Net liability at beginning of period	2,020,612				1,967,111					1,967,111				1,792,560
Net incurred losses related to:
Current year	781,601				749,802					1,019,240				799,596
Prior years	(33,677		)		(9,938		)			(19,038		)		(39,044		)
	747,924				739,864					1,000,202				760,552
Net losses paid	(580,365		)		(527,954		)			(780,905		)		(625,546		)
Effects of foreign exchange rate changes	(103,887		)		(90,991		)			(165,796		)		39,545
Net liability at end of period	2,084,284				2,088,030					2,020,612				1,967,111
Reinsurance recoverable at end of period	38,744				25,433					29,495				7,022
Gross liability at end of period	$	2,123,028			$	2,113,463				$	2,050,107			$	1,974,133
Life value in force	$	175,600			$	180,200				$	145,100			$	188,000

43

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PartnerRe Ltd.

Reserve Development

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

		For the three months ended
		September 30,				June 30,				March 31,				December 31,				September 30,
		2015				2015				2015				2014				2014
Prior year net favorable (adverse) reserve development:
Non-life segment:
North America		$	102,428			$	43,701			$	82,536			$	76,235			$	82,788
Global (Non-U.S.) P&C		38,457				10,224				18,031				27,999				29,404
Global Specialty		103,584				110,045				109,675				78,278				50,959
Catastrophe		1,467				9,398				14,095				(13,069		)		2,612
Total Non-life net prior year reserve development		$	245,936			$	173,368			$	224,337			$	169,443			$	165,763
Non-life segment:
Net prior year reserve development due to changes in premiums		$	13,759			$	(2,492	)		$	(3,540	)		$	(8,389	)		$	(11,215	)
Net prior year reserve development due to all other factors (2)		232,177				175,860				227,877				177,832				176,978
Total Non-life net prior year reserve development		$	245,936			$	173,368			$	224,337			$	169,443			$	165,763
Life and Health segment:
Net prior year reserve development due to GMDB (1)		$	(2,348	)		$	5,626			$	4,977			$	3,481			$	(329	)
Net prior year reserve development due to all other factors (2)		9,135				7,257				9,031				5,620				1,925
Total Life and Health net prior year reserve development		$	6,787			$	12,883			$	14,008			$	9,101			$	1,596

 

(1)	The guaranteed minimum death benefit (GMDB) reserves are sensitive to volatility in certain referenced global equity markets. At September 30, 2015, a 10% increase in the referenced global equity market would have decreased reserves by approximately $2.0 million, while a 10% decrease in the referenced global equity market would have increased reserves by approximately $2.4 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.

44

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PartnerRe Ltd.

Reserve Development

(Expressed in thousands of U.S. dollars)

(Unaudited)

 

	For the nine months ended									For the year ended
	September 30,				September 30,					December 31,				December 31,
	2015				2014					2014				2013
Prior year net favorable (adverse) reserve development:
Non-life segment:
North America	$	228,665			$	174,707				$	250,942			$	222,839
Global (Non-U.S.) P&C	66,713				106,395					134,394				180,052
Global Specialty	323,304				179,418					257,696				227,383
Catastrophe	24,959				30,450					17,381				91,225
Total Non-life net prior year reserve development	$	643,641			$	490,970				$	660,413			$	721,499
Non-life segment:
Net prior year reserve development due to changes in premiums	$	7,726			$	(29,516	)			$	(37,940	)		$	(70,810	)
Net prior year reserve development due to all other factors (2)	635,915				520,486					698,353				792,309
Total Non-life net prior year reserve development	$	643,641			$	490,970				$	660,413			$	721,499
Life and Health segment:
Net prior year reserve development due to GMDB (1)	$	8,255			$	3,683				$	7,163			$	26,617
Net prior year reserve development due to all other factors (2)	25,422				6,255					11,875				12,427
Total Life and Health net prior year reserve development	$	33,677			$	9,938				$	19,038			$	39,044

 

(1)	The guaranteed minimum death benefit (GMDB) reserves are sensitive to volatility in certain referenced global equity markets. At September 30, 2015, a 10% increase in the referenced global equity market would have decreased reserves by approximately $2.0 million, while a 10% decrease in the referenced global equity market would have increased reserves by approximately $2.4 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.

                                                                       

45

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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⁾ 

 

				July 1, 2015								April 1, 2015								January 1, 2015								October 1, 2014								July 1, 2014
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		$	533							$	746							$	765							$	757							$	757
U.S. Northeast		Hurricane		708								925								963								909								909
U.S. Gulf Coast		Hurricane		577								787								850								870								870
Caribbean		Hurricane		174								177								179								189								189
Europe		Windstorm		544								561								606								722								722
Japan		Typhoon		195								201								145								145								145
California		Earthquake		469				$	588			637				$	775			609				$	730			588				$	675			588				$	675
British Columbia		Earthquake		199				379				214				390				223				414				204				391				204				391
Japan		Earthquake		377				421				390				437				393				440				427				481				427				481
Australia		Earthquake		236				350				246				357				305				415				367				495				367				495
New Zealand		Earthquake		161				205				165				196				194				229				218				279				218				279

(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.

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, 2014.

46

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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
	September 30,				June 30,				March 31,				December 31,				September 30,
	2015 (2)				2015 (2)				2015 (2)				2014				2014
Reconciliation of GAAP and non-GAAP measures:
Annualized return on beginning diluted book value per common share calculated with net (loss) income per share attributable to common shareholders (1)	(16.1		)%		(6.8		)%		15.1		%		19.3		%		13.2		%
Less:
Annualized net realized and unrealized investment (losses) gains, net of tax, on beginning diluted book value per common share (1)	(8.1		)		(14.4		)		6.5				6.0				(2.5		)
Annualized net foreign exchange losses, net of tax, on beginning diluted book value per common share (1)	(1.0		)		(0.3		)		(1.0		)		(2.2		)		(0.9		)
Annualized net interest in (losses) earnings of equity method investments, net of tax, on beginning diluted book value per common share (1)	(0.1		)		0.4				(0.2		)		(0.1		)		0.2
Annualized withholding tax on inter-company dividends, net of tax, on beginning diluted book value per common share (1)	—				—				—				(0.4		)		—
Annualized amalgamation termination fee and reimbursement of expenses, on beginning diluted book value per common share (1)	(20.9		)		—				—				—				—
Annualized operating return on beginning diluted book value per common share (1)	14.0		%		7.5		%		9.8		%		16.0		%		16.4		%
Net (loss) income attributable to PartnerRe	$	(229,137	)		$	(88,909	)		$	245,917			$	276,893			$	196,398
Less:
Net realized and unrealized investment (losses) gains, net of tax	(121,764		)		(217,224		)		100,311				82,128				(35,426		)
Net foreign exchange losses, net of tax	(15,896		)		(5,094		)		(15,801		)		(29,824		)		(11,913		)
Interest in (losses) earnings of equity method investments, net of tax	(2,244		)		6,731				(3,313		)		(1,810		)		2,893
Withholding tax on inter-company dividends, net of tax	—				—				—				(6,125		)		—
Amalgamation termination fee and reimbursement of expenses	(315,000		)		—				—				—				—
Dividends to preferred shareholders	14,184				14,184				14,184				14,184				14,184
Operating earnings attributable to PartnerRe common shareholders	$	211,583			$	112,494			$	150,536			$	218,340			$	226,660
Per diluted common share:
Net (loss) income attributable to PartnerRe common shareholders	$	(5.08	)		$	(2.16	)		$	4.76			$	5.26			$	3.60
Less:
Net realized and unrealized investment (losses) gains, net of tax	(2.54		)		(4.55		)		2.06				1.64				(0.70		)
Net foreign exchange losses, net of tax	(0.33		)		(0.10		)		(0.32		)		(0.60		)		(0.23		)
Interest in earnings (losses) of equity method investments, net of tax	(0.05		)		0.14				(0.07		)		(0.03		)		0.06
Amalgamation termination fee and reimbursement of expenses	(6.58		)		—				—				—				—
Withholding tax on inter-company dividends, net of tax	—				—				—				(0.12		)		—
Operating earnings attributable to PartnerRe common shareholders	$	4.42			$	2.35			$	3.09			$	4.37			$	4.47
(1) Excluding preferred shares of $853,750 at January 1, 2015 and 2014.
(2) For the three months ended September 30, 2015, June 30, 2015 and March 31, 2015, expenses related to the Axis and Exor transactions, pre-tax, (see page 23) are $6,944, $9,008 and $30,880, or $0.15, $0.19 and $0.63 per diluted share, or 0.5%, 0.6% and 2.0% points on the annualized operating return on beginning diluted book value per common share, respectively. For the three months ended June 30, 2015, expense related to the earn-out consideration paid to the former shareholders of Presidio Reinsurance Group, Inc. was $25,223, or $0.53 per diluted share, or 1.7% points on the annualized operating return on beginning dividend book value per share. After-tax, operating earnings attributable to PartnerRe common shareholders adjusted to be before the Axis and Exor transaction related costs and earn-out consideration paid are $218,527, $146,725 and $181,416, or $4.57, $3.07 and $3.72 per diluted share, or 14.5%, 9.8% and 11.8% points on the annualized operating return on beginning diluted book value per common share, respectively.

 

47

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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 nine months ended									For the year ended
	September 30,				September 30,					December 31,				December 31,
	2015				2014					2014				2013
Reconciliation of GAAP and non-GAAP measures:
Annualized return on beginning diluted book value per common share calculated with net income per share attributable to common shareholders (1)	(2.5		)%		17.4		%			17.9		%		10.5		%
Less:
Annualized net realized and unrealized investment (losses) gains, net of tax, on beginning diluted book value per common share (1)	(5.3		)		4.8					5.1				(2.2		)
Annualized net foreign exchange losses, net of tax, on beginning diluted book value per common share (1)	(0.8		)		(0.4		)			(0.8		)		—
Annualized net interest in earnings of equity method investments, net of tax, on beginning diluted book value per common share (1)	0.1				0.3					0.2				0.2
Annualized loss on redemption of preferred shares, on beginning diluted book value per common share (1)	—				—					—				(0.2		)
Annualized withholding tax on inter-company dividends, net of tax, on beginning diluted book value per common share (1)	—				—					(0.1		)		—
Annualized amalgamation termination fee and reimbursement of expenses, on beginning diluted book value per common share (1)	(7.0		)		—					—				—
Annualized operating return on beginning diluted book value per common share (1)	10.5		%		12.7		%			13.5		%		12.7		%
Net (loss) income attributable to PartnerRe	$	(72,130	)		$	778,082				$	1,054,974			$	664,008
Less:
Net realized and unrealized investment (losses) gains, net of tax	(238,677		)		204,125					286,252				(127,182		)
Net foreign exchange (losses) gains, net of tax	(36,792		)		(16,059		)			(45,883		)		2,521
Interest in earnings of equity method investments, net of tax	1,174				10,387					8,577				9,075
Withholding tax on inter-company dividends, net of tax	—				—					(6,125		)		—
Amalgamation termination fee and reimbursement of expenses	(315,000		)		—					—				—
Dividends to preferred shareholders	42,551				42,551					56,735				57,861
Operating earnings attributable to PartnerRe common shareholders	$	474,614			$	537,078				$	755,418			$	721,733
Per diluted common share:
Net (loss) income attributable to PartnerRe common shareholders	$	(2.40	)		$	14.26				$	19.51			$	10.58
Less:
Net realized and unrealized investment (losses) gains, net of tax	(5.00		)		3.95					5.60				(2.25		)
Net foreign exchange (losses) gains, net of tax	(0.77		)		(0.31		)			(0.90		)		0.04
Loss on redemption of preferred shares	—				—					—				(0.16		)
Interest in earnings of equity method investments, net of tax	0.02				0.20					0.17				0.16
Amalgamation termination fee and reimbursement of expenses	(6.60		)		—					—				—
Withholding tax on inter-company dividends, net of tax	—				—					(0.12		)		—
Operating earnings attributable to PartnerRe common shareholders	$	9.95			$	10.42				$	14.76			$	12.79
(1) Excluding preferred shares of $853,750 at January 1, 2015 and 2014 and $893,750 at January 1, 2013.
(2) For the nine months ended September 30, 2015, expenses related to the Axis and Exor transactions, pre-tax, (see page 24) are $46,832 or $0.98 per diluted share, or 1.0% points on the annualized operating return on beginning diluted book value per common share, respectively. For the nine months ended September 2015, expense related to the earn-out consideration paid to the former shareholders of Presidio Reinsurance Group, Inc. was $25,223, or $0.53 per diluted share, or 0.6% points on the annualized operating return on beginning dividend book value per share. After-tax, operating earnings attributable to PartnerRe common shareholders adjusted to be before the amalgamation related costs and earn-out consideration paid are $546,669, or $11.46 per diluted share, or 12.1% points on the annualized operating return on beginning diluted book value per common share, respectively.

48

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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)

 

	September 30,				June 30,				March 31,				December 31,				September 30,					December 31,
	2015				2015				2015				2014				2014					2013
Reconciliation of GAAP and non-GAAP measures:
Total shareholders’ equity	$	6,777,349			$	7,082,143			$	7,254,828			$	7,104,411			$	7,066,256				$	6,766,159
Less:
Preferred shares, aggregate liquidation value	853,750				853,750				853,750				853,750				853,750					853,750
Noncontrolling interests	2,212				2,217				57,683				55,501				52,276					56,627
Common shareholders’ equity attributable to PartnerRe	5,921,387				6,226,176				6,343,395				6,195,160				6,160,230					5,855,782
Less:
Goodwill	456,380				456,380				456,380				456,380				456,380					456,380
Intangible assets, net of tax	93,869				98,499				103,276				105,652				109,327					120,900
Tangible book value	$	5,371,138			$	5,671,297			$	5,783,739			$	5,633,128			$	5,594,523				$	5,278,502
Common shares and common share equivalents outstanding	49,070,138				48,932,758				48,849,532				49,087,412				50,513,695					53,596,034
Equals:
Diluted tangible book value per common share	$	109.46			$	115.90			$	118.40			$	114.76			$	110.75				$	98.49

49

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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)

 

	September 30,				June 30,				March 31,				December 31,				September 30,					December 31,
	2015				2015				2015				2014				2014					2013
Reconciliation of GAAP and non-GAAP measures:
Total shareholders’ equity	$	6,777,349			$	7,082,143			$	7,254,828			$	7,104,411			$	7,066,256				$	6,766,159
Less:
Preferred shares, aggregate liquidation value	853,750				853,750				853,750				853,750				853,750					853,750
Noncontrolling interests	2,212				2,217				57,683				55,501				52,276					56,627
Common shareholders’ equity attributable to PartnerRe	5,921,387				6,226,176				6,343,395				6,195,160				6,160,230					5,855,782
Less:
Goodwill	456,380				456,380				456,380				456,380				456,380					456,380
Intangible assets, net of tax	93,869				98,499				103,276				105,652				109,327					120,900
Tangible book value	5,371,138				5,671,297				5,783,739				5,633,128				5,594,523					5,278,502
Net unrealized gains on fixed income securities and funds held - directly managed, net of tax (NURGL)	143,208				190,602				391,377				355,028				316,706					223,995
Book value excluding NURGL	$	5,778,179			$	6,035,574			$	5,952,018			$	5,840,132			$	5,843,524				$	5,631,787
Tangible book value excluding NURGL	$	5,227,930			$	5,480,695			$	5,392,362			$	5,278,100			$	5,277,817				$	5,054,507
Divided by:
Number of common shares and common share equivalents outstanding	49,070,138				48,932,758				48,849,532				49,087,412				50,513,695					53,596,034
Equals:
Diluted book value per common share excluding NURGL	$	117.75			$	123.34			$	121.84			$	118.97			$	115.68				$	105.08
Diluted tangible book value per common share excluding NURGL	$	106.54			$	112.00			$	110.39			$	107.52			$	104.48				$	94.31

50

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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)

 

	September 30,				June 30,				March 31,				December 31,				September 30,					December 31,
	2015				2015				2015				2014				2014					2013
Basic book value per common share
Total shareholders’ equity	$	6,777,349			$	7,082,143			$	7,254,828			$	7,104,411			$	7,066,256				$	6,766,159
Less:
Preferred shares, aggregate liquidation value	853,750				853,750				853,750				853,750				853,750					853,750
Noncontrolling interests	2,212				2,217				57,683				55,501				52,276					56,627
Common shareholders’ equity attributable to PartnerRe	$	5,921,387			$	6,226,176			$	6,343,395			$	6,195,160			$	6,160,230				$	5,855,782
Basic common shares outstanding	47,901,756				47,835,909				47,664,648				47,836,284				49,347,349					52,443,434
Basic book value per common share	$	123.62			$	130.16			$	133.08			$	129.51			$	124.83				$	111.66
Common shareholders’ equity attributable to PartnerRe	$	5,921,387			$	6,226,176			$	6,343,395			$	6,195,160			$	6,160,230				$	5,855,782
Basic common shares outstanding	47,901,756				47,835,909				47,664,648				47,836,284				49,347,349					52,443,434
Add:
Stock options and other	1,346,408				1,379,754				1,734,600				1,997,735				2,005,535					2,382,771
Restricted stock units	877,628				881,929				881,806				931,283				895,359					870,054
Less:
Stock options and other bought back via treasury stock method	1,055,653				1,164,834				1,431,522				1,677,890				1,734,548					2,100,225
Diluted common shares and common share equivalents outstanding	49,070,139				48,932,758				48,849,532				49,087,412				50,513,695					53,596,034
Diluted book value per common share	$	120.67			$	127.24			$	129.86			$	126.21			$	121.95				$	109.26

 

(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.

51

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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 September 30, 2015									As at and for the three months ended September 30, 2014
	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	$	6,226			$	127.24				$	6,056			$	118.96
Technical result	261				5.46					275				5.43
Other expenses	(101		)		(2.11		)			(108		)		(2.12		)
Net investment income	117				2.45					118				2.33
Amortization of intangible assets	(7		)		(0.14		)			(7		)		(0.14		)
Other, net	(11		)		(0.24		)			(15		)		(0.32		)
Operating income tax expense	(33		)		(0.70		)			(22		)		(0.43		)
Preferred dividends	(14		)		(0.30		)			(14		)		(0.28		)
Operating earnings	212				4.42					227				4.47
Net realized and unrealized investment (losses) gains, net of tax	(122		)		(2.54		)			(35		)		(0.70		)
Net foreign exchange losses, net of tax	(16		)		(0.33		)			(12		)		(0.23		)
Interest in earnings of equity method investments, net of tax	(2		)		(0.05		)			2				0.06
Amalgamation termination fee and reimbursement of expenses	(315		)		(6.58		)			—				—
Net (loss) income attributable to PartnerRe common shareholders	(243		)		(5.08		)			182				3.60
Common share dividends	(34		)		(0.70		)			(33		)		(0.67		)
Change in currency translation adjustment	(40		)		(0.83		)			1				0.03
Issuance (repurchase) of common shares, net	11				0.05					(47		)		0.18
Change in other accumulated comprehensive income or loss, net of tax	1				0.02					1				0.02
Impact of change in number of common and common share equivalents outstanding	n/a				(0.03		)			n/a				(0.17		)
Common shareholders’ equity attributable to PartnerRe / diluted book value per common share at end of period	$	5,921			$	120.67				$	6,160			$	121.95
Goodwill	(456		)		(9.30		)			(456		)		(9.04		)
Intangible assets, net of tax	(94		)		(1.91		)			(109		)		(2.16		)
Tangible common shareholders’ equity attributable to PartnerRe / diluted tangible book value per common share at end of period	$	5,371			109.46					$	5,595			$	110.75

52

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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 nine months ended September 30, 2015									As at and for the nine months ended September 30, 2014
	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	$	6,195			$	126.21				$	5,856			$	109.26
Technical result	679				14.22					681				13.20
Other expenses	(355		)		(7.45		)			(327		)		(6.34		)
Net investment income	342				7.16					365				7.08
Amortization of intangible assets	(20		)		(0.43		)			(21		)		(0.41		)
Other, net	(35		)		(0.72		)			(34		)		(0.66		)
Operating income tax expense	(93		)		(1.94		)			(84		)		(1.62		)
Preferred dividends	(43		)		(0.89		)			(43		)		(0.83		)
Operating earnings	475				9.95					537				10.42
Net realized and unrealized investment (losses) gains, net of tax	(239		)		(5.00		)			204				3.95
Net foreign exchange losses, net of tax	(37		)		(0.77		)			(16		)		(0.31		)
Interest in earnings of equity method investments, net of tax	1				0.02					11				0.20
Amalgamation termination fee and reimbursement of expenses	(315		)		(6.60		)			—				—
Net (loss) income attributable to PartnerRe common shareholders	(115		)		(2.40		)			736				14.26
Common share dividends	(100		)		(2.10		)			(102		)		(2.01		)
Change in currency translation adjustment	(34		)		(0.71		)			3				0.06
Repurchase of common shares, net	(24		)		(0.67		)			(333		)		0.29
Change in other accumulated comprehensive income or loss, net of tax	(1		)		(0.02		)			—				0.01
Impact of change in number of common and common share equivalents outstanding	n/a				0.36					n/a				0.08
Common shareholders’ equity attributable to PartnerRe / diluted book value per common share at end of period	$	5,921			$	120.67				$	6,160			$	121.95
Goodwill	(456		)		(9.30		)			(456		)		(9.04		)
Intangible assets, net of tax	(94		)		(1.91		)			(109		)		(2.16		)
Tangible common shareholders’ equity attributable to PartnerRe / diluted tangible book value per common share at end of period	$	5,371			109.46					$	5,595			$	110.75

53

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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, 2014									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	$	5,856			$	109.26				$	6,040			$	100.84
Technical result	932				18.21					962				17.06
Other expenses	(450		)		(8.79		)			(500		)		(8.87		)
Net investment income	480				9.37					484				8.58
Amortization of intangible assets	(27		)		(0.53		)			(27		)		(0.48		)
Other, net	(40		)		(0.77		)			(47		)		(0.85		)
Operating income tax expense	(83		)		(1.62		)			(92		)		(1.63		)
Preferred dividends	(57		)		(1.11		)			(58		)		(1.02		)
Operating earnings	755				14.76					722				12.79
Net realized and unrealized investment gains (losses), net of tax	286				5.60					(127		)		(2.25		)
Net foreign exchange (losses) gains, net of tax	(46		)		(0.90		)			2				0.04
Loss on redemption of preferred shares	—				—					(9		)		(0.16		)
Interest in earnings of equity method investments, net of tax	9				0.17					9				0.16
Withholding tax on inter-company dividend, net of tax	(6		)		(0.12		)			—				—
Net income attributable to PartnerRe common shareholders	998				19.51					597				10.58
Common share dividends	(134		)		(2.68		)			(142		)		(2.56		)
Change in currency translation adjustment	(9		)		(0.17		)			(32		)		(0.56		)
Repurchase of common shares, net	(503		)		0.55					(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	(13		)		(0.25		)			9				0.16
Impact of change in number of common and common share equivalents outstanding	n/a				(0.01		)			n/a				(0.05		)
Common shareholders’ equity attributable to PartnerRe / diluted book value per common share at end of period	$	6,195			$	126.21				$	5,856			$	109.26
Goodwill	(456		)		(9.30		)			(456		)		(8.51		)
Intangible assets, net of tax	(106		)		(2.15		)			(121		)		(2.26		)
Tangible common shareholders’ equity attributable to PartnerRe / diluted tangible book value per common share at end of period	$	5,633			$	114.76				$	5,279			$	98.49

54

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Exhibit 99.3

News Release

PartnerRe Ltd. Declares Quarterly Dividend of $0.70 Per Ordinary Share

PEMBROKE, Bermuda, October 26, 2015 — PartnerRe Ltd. (NYSE:PRE) today announced that its Board of Directors has declared a dividend of $0.70 per common share.

The dividend will be payable on December 1, 2015, to common shareholders of record on November 6, 2015.

 

____________________________________________________

 

PartnerRe Ltd. is a leading global reinsurer, providing multi-line reinsurance to insurance companies. The Company, through its wholly owned subsidiaries, also offers capital markets products that include weather and credit protection to financial, industrial and service companies. Risks reinsured include property, casualty, motor, agriculture, aviation/space, catastrophe, credit/surety, engineering, energy, marine, specialty property, specialty casualty, multiline and other lines in its Non-life operations, mortality, longevity and accident and health in its Life and Health operations, and alternative risk products. For the year ended December 31, 2014, total revenues were $6.5 billion. At June 30, 2015, total assets were $22.5 billion, total capital was $7.9 billion and total shareholders’ equity attributable to PartnerRe was $7.1 billion.

PartnerRe on the Internet: www.partnerre.com

 

Contacts:		PartnerRe Ltd.		Sard Verbinnen & Co.
		(441) 292-0888		(212) 687-8080
		Investor Contact: Robin Sidders		Drew Brown/Daniel Goldstein
		Media Contact: Celia Powell

 

PartnerRe Ltd. Wellesley House, 5th Floor 90 Pitts Bay Road Pembroke, Bermuda HM 08	Telephone +1 441 292 0888 Fax +1 441 292 6080 www.partnerre.com