UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 6-K
 
Report of Foreign Private Issuer
Pursuant To Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

For the month of May 2020
Commission File Number 001-14536
 
PartnerRe Ltd.
(Translation of registrant’s name into English)
 

Wellesley House South, 90 Pitts Bay Road,
Pembroke HM08, Bermuda
(441) 292-0888
(Address of principal executive office)
 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ý Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1).
Yes ¨ No ý
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7).
Yes ¨ No ý




DOCUMENTS FURNISHED AS PART OF THIS FORM 6-K

The following documents, furnished as exhibits to this Form 6-K, are incorporated by reference as part of this Form 6-K:
 
 
 
Exhibit
  
Description of Exhibit
 
 
99.1

  
Press Release and Supplementary Financial Information – PartnerRe Ltd. first quarter results, dated May 7, 2020
 
 











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, thereunto duly authorized.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PartnerRe Ltd.
 
 
 
 
 
 
(Registrant)
 
 
 
 
 
Date:
 
May 7, 2020
 
 
 
By:
 
/s/ Nicolas Burnet
 
 
 
 
 
 
 
 
Name: Nicolas Burnet
 
 
 
 
 
 
 
 
Title: Chief Financial Officer




EXHIBIT INDEX
 
 
 
 
Exhibit
  
Description of Exhibit
 
 
99.1

  
Press Release and Supplementary Financial Information – PartnerRe Ltd. first quarter results, dated May 7, 2020

 
 


Exhibit

Exhibit 99.1

                                                
News Release


PartnerRe Ltd. Reports First Quarter 2020 Results


Net loss attributable to common shareholder of $433 million for the quarter, driven by $610 million of unrealized losses on investments. Since the quarter-end, the Company's investment portfolio significantly recovered.

Non-life combined ratio of 103.8% during the quarter, driven by P&C combined ratio of 94.3% and Specialty combined ratio of 121.1%. Life and Health profitability, including underwriting result and allocated net investment income, of $18 million for the quarter.

Strong solvency and liquidity at the end of the first quarter, with a solvency ratio estimated in excess of 250% and cash and cash equivalents of $1.9 billion.

PEMBROKE, Bermuda, May 7, 2020 - PartnerRe Ltd. ("the Company") today reported a net loss attributable to common shareholder of $433 million for the first quarter of 2020, which included net realized and unrealized investment losses of $27 million on fixed maturities and short-term investments and $130 million of net foreign exchange gains. This compared to a net income available to common shareholder of $497 million in the first quarter of 2019, which included net realized and unrealized investment gains on fixed maturities and short-term investments of $280 million and $25 million of net foreign exchange losses.
The Company incurred $18 million of pre-tax losses from event cancellation claims associated with COVID-19 in the first quarter of 2020. PartnerRe is exposed to COVID-19 related claims across its Non-life and Life & Health segments, and the COVID-19 related losses recorded during the first quarter reflect estimates on claims incurred as of March 31, 2020. The COVID-19 crisis and its potential recessionary impacts is an ongoing event, and it is too early to quantify the full extent of its impact.
The Company is also exposed to investment risk and the first quarter results reflect $610 million of unrealized investment losses driven by the economic impacts of widening credit spreads and declines in equity markets. The Company's solvency and liquidity remained strong at the end of the first quarter of 2020, with a solvency ratio estimated in excess of 250% and cash and cash equivalents of $1.9 billion.


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

1




        
News Release


PartnerRe President and Chief Executive Officer Emmanuel Clarke commented, “The COVID-19 pandemic is a test for our industry and a reminder of the potential severity of systemic events, and the value of strong reinsurance partnerships. Our priorities in responding to the rapidly expanding COVID-19 pandemic through the first quarter have been the safety of our staff and the continuous, seamless servicing of all our business partners. I have been impressed by the speed and agility with which the PartnerRe organization worldwide has adapted to a full work from home mode, while maintaining highly responsive interaction with our business partners.”
Mr. Clarke continued: “In our first quarter, we delivered positive underwriting results in our P&C and Life & Health segments, which was offset by loss activity in our Specialty segment. I am confident that the actions we have taken throughout last year to improve our portfolio performance, combined with strong underlying rate increases in the loss affected classes, will start to show a positive impact. We continue to execute on our growth strategy for Life & Health to maintain a well-diversified and profitable book of business.”
Mr. Clarke added: “With the strength of our balance sheet and our high quality investment portfolio, we have the resilience to weather this pandemic and changed economic cycle, and we are well-positioned for the hardening of reinsurance pricing.”
Highlights for the first quarter of 2020 compared to the first quarter of 2019 are included below.

 


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

2




        
News Release


Non-Life:
Non-life net premiums written for the first quarter of 2020 decreased 6% compared to the first quarter of 2019, driven by a 7% decrease in the P&C segment, offset by a 1% increase in the Specialty segment, reflecting the Company's focus on portfolio optimization during the January 1, 2020 renewals.
Non-life net premiums earned for the first quarter of 2020 increased by 14% compared to the first quarter of 2019, driven by premiums earned on prior underwriting years.
The Non-life underwriting loss was $46 million (combined ratio of 103.8%) for the first quarter of 2020 compared to a profit of $24 million (combined ratio of 97.7%) for the first quarter of 2019.
The P&C segment reported a combined ratio of 94.3% for the first quarter of 2020 compared to 87.7% for the first quarter of 2019. The P&C combined ratio for the first quarter of 2020 included $26 million (3.4 points) of favorable prior year reserve development, compared to $49 million (7.3 points) for the first quarter of 2019.
The Specialty segment reported a combined ratio of 121.1% for the first quarter of 2020 compared to 116.0% for the first quarter of 2019, with both periods adversely impacted by prior year reserve development of $95 million (22.4 points) and $38 million (10.4 points), respectively. Prior year reserve development for the first quarter of 2020 was largely exposure driven by premium increases, as well as experience driven by a mid-sized loss from a 2019 event in the property line of business. The impact of higher adverse prior year development was partially offset by an improvement in the current accident year loss ratio compared to the same period of 2019. The first quarter of 2020 included a loss of $18 million (4.2 points) on two event cancellations related to COVID-19, compared to the first quarter of 2019 which included a loss of $27 million (7.3 points) in the aviation line of business.
Life and Health:
Net premiums written were up 7% and net premiums earned were up 10% for the first quarter 2020, compared to the first quarter of 2019.
Allocated underwriting result was a profit of $18 million in the first quarter of 2020, compared to a profit of $30 million in the first quarter 2019. The decrease was primarily driven by a $23 million adverse impact in the guaranteed minimum death benefits (GMDB) line of business following declines in equity markets during the first quarter of 2020, partially offset by the favorable impact of certain portfolio recaptures.


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

3




        
News Release


Investments:
Net investment return in the first quarter of 2020 was a loss of $503 million, or (2.9)%, and included net realized and unrealized investment losses of $602 million and losses from equity method investments of $4 million, which were partially offset by net investment income of $103 million. This compares to a net investment return of $600 million, or 3.6%, for the first quarter of 2019, which included net investment income of $110 million, net realized and unrealized investment gains of $469 million and interest in earnings of equity method investments of $21 million. The majority of the Company's investments, including all fixed maturities, are accounted for at fair value with changes in the fair value recorded in the Consolidated Statements of Operations.
Net investment income was down $7 million, or 6%, for the first quarter of 2020, compared to the same period of 2019, driven by higher investment expenses, partially offset by higher gross investment income from decisions in 2019 to re-balance certain assets into higher yield per duration unit strategies.
Net realized and unrealized investment losses of $602 million for the first quarter of 2020 included net realized and unrealized investment losses of $27 million on fixed maturities and short-term investments, net realized and unrealized investment losses of $362 million on equities, and net realized and unrealized investment losses of $213 million on other invested assets. Losses on fixed maturities and short-term investments were driven by the impact of increases in worldwide credit spreads, partially offset by decreases in world-wide risk-free rates, while losses on equities were primarily unrealized and were driven by losses in public equity funds due to decreases in world-wide equity markets. Losses on other invested assets were also primarily unrealized and were driven by unrealized losses on U.S. and European bank loans of $168 million during the quarter, which resulted from significant widening of U.S. and European non-investment grade credit spreads. In comparison, net realized and unrealized investment gains were $469 million in the first quarter of 2019, which included net realized and unrealized investment gains of $280 million on fixed maturities and short-term investments, due to decreases in world-wide risk free rates and credit spreads, and $189 million of net realized and unrealized investment gains on equities and other invested assets, primarily due gains in public equity funds.
Losses from equity method investments was $4 million in the first quarter of 2020, primarily driven by losses on certain real estate and private equity investments. This compared to earnings of $21 million for the same period of 2019.
As of March 31, 2020, reinvestment rates were 2.4% compared to the Company's fixed income investment portfolio yield of 3.1% for the first quarter of 2020.


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

4




        
News Release


During the month of April 2020, the Company recorded net unrealized gains of approximately $150 million in its fixed maturities and short-term investments portfolios. The Company also recorded approximately $145 million of unrealized gains in public EXOR funds, recorded within Equities, and approximately $65 million of unrealized gains in the U.S. bank loan portfolio, recorded within Other invested assets.
Other Income Statement Items:
Expense ratio of 5.5% for the first quarter of 2020 (Other expenses of $86 million) was down 0.9 percentage points compared to expense ratio of 6.4% (Other expenses of $89 million) for the same period of 2019, with the decrease primarily driven by non-recurring employment related expenses incurred during the first quarter of 2019, partially offset by an increase in Life and Health expenses compared to prior year to support the organic growth of the business.
Net foreign exchange gains were $130 million for the first quarter of 2020, driven primarily by the appreciation of the U.S. dollar against the British pound and Canadian dollar, partially offset by the cost of hedging, compared to losses of $25 million for the first quarter of 2019, driven by the depreciation of the U.S. dollar against these same currencies. The impact of foreign exchange in the income statement was offset by changes in the foreign currency translation adjustment, which decreased by $114 million and increased by $45 million in the first quarters of 2020 and 2019, respectively.
Interest expense was $8 million for the first quarter of 2020, compared to $11 million for the same period of 2019. During the second quarter of 2019, the Company issued $500 million 3.70% Senior Notes due 2029 and used the proceeds to early redeem the $500 million 5.50% Senior Notes due 2020 in the third quarter of 2019. These transactions resulted in the lower interest expense compared to the first quarter of 2019.
Preferred dividends of $12 million for the first quarter of 2020 were comparable to the same period of 2019.
Income tax benefit was $45 million on pre-tax losses of $467 million in the first quarter of 2020 compared to a tax expense of $45 million on pre-tax income of $554 million for the same period of 2019. These amounts were largely driven by the geographical distribution of pre-tax profits and losses.


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

5




        
News Release


Balance Sheet, Capitalization and Cash Flows:
Total investments and cash and cash equivalents were $16.9 billion at March 31, 2020, down 5.1% compared to December 31, 2019. The decrease to March 31, 2020 was primarily driven by the net investment return, which was a loss of $503 million for the first quarter of 2020, and the increase in receivables for securities sold to $349 million at March 31, 2020 from $31 million at December 31, 2019.
Cash and cash equivalents, fixed maturities, and short-term investments, which are government issued or investment grade fixed income securities, were $12.9 billion at March 31, 2020, representing 77% of the total investments and cash and cash equivalents.
The average credit rating of the fixed income portfolio was AA as of March 31, 2020. The expected average duration of the public fixed income portfolio at March 31, 2020 was 2.1 years, while the average duration of the Company’s liabilities was 4.5 years.
There were no dividends declared and paid to common shareholders in the first quarter of 2020, compared to $80 million over the same period in 2019. In April 2020, the Company declared and paid a dividend to common shareholders of $50 million.
Common shareholder's equity (or book value) of $6.0 billion and tangible book value of $5.4 billion at March 31, 2020 decreased by 8.6% and 9.3%, respectively, compared to December 31, 2019, primarily due to the net loss attributable to common shareholder for the first quarter of 2020 and the foreign currency translation adjustment.
Total capital was $8.1 billion at March 31, 2020, down 6.6% compared to December 31, 2019, primarily due to the decrease in common shareholder's equity during the first quarter of 2020 and, to a lesser extent, the decrease in Euro debt from foreign exchange movements.
Cash provided by operating activities was $237 million for the first quarter of 2020, compared to $92 million for the first quarter of 2019. The increase for the first quarter of 2020 over the same period in 2019 was primarily driven by increases in cash flow from underwriting operations.

_______________________________________


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

6




        
News Release


PartnerRe Ltd. is a leading global reinsurer that helps insurance companies reduce their earnings volatility, strengthen their capital and grow their businesses through reinsurance solutions. Risks are underwritten on a worldwide basis through the Company’s three segments: P&C, Specialty, and Life and Health. For the year ended December 31, 2019, total revenues were $7.9 billion. At March 31, 2020, total assets were $24.6 billion, total capital was $8.1 billion and total shareholders’ equity was $6.7 billion. PartnerRe maintains strong financial strength ratings as follows: A.M. Best A+ / Moody’s A1 / Standard & Poor’s A+.
PartnerRe on the Internet: www.partnerre.com

Please refer to the "Financial Information - Annual Reports" section of the Company's website for a copy of the Company's Annual Report on Form 20-F at: www.partnerre.com/financial-information/annual-reports/

Forward-looking statements contained in this press release, such as those related to company performance, including the impact of the ongoing COVID-19 pandemic (including the related impact on the U.S. and global economies), 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, pandemic 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 reports filed or furnished 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.

The Company’s estimate for recent catastrophic and pandemic losses is based on a preliminary analysis of the Company’s exposures, the current assumption of total insured industry losses and preliminary information received from certain cedants to date. There is material uncertainty associated with the Company's loss estimates given the nature, magnitude and recency of these loss events and the limited claims information received to date. The ultimate loss therefore may differ materially from the current preliminary estimate.
 
 
 
Contacts:
 
PartnerRe Ltd.
 
 
(441) 292-0888
 
 
Investor Contact: Ryan Lipschutz
 
 
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

7




PartnerRe Ltd.
Consolidated Statements of Operations and Comprehensive (Loss) Income (1) 
(Expressed in thousands of U.S. dollars)
(Unaudited)  
 
For the three months ended

March 31, 2020

March 31, 2019
Revenues



Gross premiums written
$
2,041,426


$
2,117,274

Net premiums written
$
1,878,815


$
1,943,807

Increase in unearned premiums
(312,757
)

(558,174
)
Net premiums earned
1,566,058

 
1,385,633

Net investment income
103,409


109,708

Net realized and unrealized investment (losses) gains
(601,788
)

468,778

Other income
4,470


3,911

Total revenues
1,072,149

 
1,968,030

Expenses



Losses and loss expenses
1,233,055


991,783

Acquisition costs
334,538


316,208

Other expenses 
85,712


89,193

Interest expense
8,245


10,761

Amortization of intangible assets
2,514


2,861

Net foreign exchange (gains) losses
(129,624
)

25,052

Total expenses
1,534,440

 
1,435,858

(Loss) income before taxes and interest in (losses) earnings of equity method investments
(462,291
)
 
532,172

Income tax (benefit) expense
(44,782
)

44,988

Interest in (losses) earnings of equity method investments
(4,277
)

21,352

Net (loss) income
(421,786
)
 
508,536

Preferred dividends
11,604


11,604

Net (loss) income attributable to common shareholder
$
(433,390
)
 
$
496,932

Comprehensive (loss) income
 
 
 
Net (loss) income
$
(421,786
)
 
$
508,536

Change in currency translation adjustment
(114,372
)
 
44,530

Change in net unrealized gains or losses on investments, net of tax
(71
)
 
(1,236
)
Change in unfunded pension obligation, net of tax
(229
)
 
81

Comprehensive (loss) income
$
(536,458
)

$
551,911

(1) The Company's common shares included in shareholders' equity are owned by EXOR Nederland N.V. and are not publicly traded. As such, per share data is not meaningful to present.





8


PartnerRe Ltd.
Consolidated Balance Sheets
(Expressed in thousands of U.S. dollars, except parenthetical share data)
(Unaudited)   
 
March 31, 2020
 
December 31, 2019
Assets
 
 
 
Investments:
 
 
 
Fixed maturities, at fair value
$
10,731,538

 
$
10,680,714

Short-term investments, at fair value
672,788

 
1,003,421

Equities, at fair value
930,892

 
1,295,164

Investments in real estate
67,879

 
71,834

Other invested assets
2,606,734

 
3,266,009

Total investments
15,009,831

 
16,317,142

Cash and cash equivalents
1,876,101

 
1,484,463

Accrued investment income
108,045

 
109,673

Reinsurance balances receivable
3,554,703

 
3,400,070

Reinsurance recoverable on paid and unpaid losses
866,457

 
889,021

Prepaid reinsurance premiums
145,481

 
80,942

Funds held by reinsured companies
773,388

 
815,167

Deferred acquisition costs
895,066

 
874,608

Deposit assets
153,146

 
168,067

Net tax assets
203,583

 
179,813

Goodwill
456,380

 
456,380

Intangible assets
115,023

 
117,538

Other assets (1)
472,209

 
169,521

Total assets
$
24,629,413

 
$
25,062,405

Liabilities
 
 
 
Non-life reserves
$
10,366,263

 
$
10,363,383

Life and health reserves
2,302,155

 
2,417,044

Unearned premiums
2,769,025

 
2,433,860

Other reinsurance balances payable
567,664

 
521,338

Deposit liabilities
6,682

 
5,507

Net tax liabilities
128,252

 
135,966

Accounts payable, accrued expenses and other
393,671

 
517,084

Debt related to senior notes
1,317,810

 
1,327,965

Debt related to capital efficient notes
70,089

 
70,089

Total liabilities
17,921,611

 
17,792,236

Shareholders’ Equity
 
 
 
Common shares (par value $0.00000001; issued and outstanding: 100,000,000 shares)

 

Preferred shares (par value $1.00; issued and outstanding: 28,169,062 shares; aggregate liquidation value: $704,227)
28,169

 
28,169

Additional paid-in capital
2,396,530

 
2,396,530

Accumulated other comprehensive loss
(190,597
)
 
(75,925
)
Retained earnings
4,473,700

 
4,921,395

Total shareholders’ equity
6,707,802

 
7,270,169

Total liabilities and shareholders’ equity
$
24,629,413

 
$
25,062,405

(1) Includes receivables for securities sold of $349 million and $31 million at March 31, 2020 and December 31, 2019, respectively.

9


PartnerRe Ltd.
Condensed Consolidated Statements of Cash Flows
(Expressed in thousands of U.S. dollars)
(Unaudited)
 
 
 
For the three months ended
 
 
March 31, 2020
 
March 31, 2019
Net cash provided by operating activities
 
$
237,000

 
$
91,752

Net cash provided by (used in) investing activities
 
170,974

 
(198,984
)
Net cash used in financing activities
 
(10,687
)
 
(90,784
)
Effect of foreign exchange rate changes on cash
 
(5,649
)
 
(2,253
)
Increase (decrease) in cash and cash equivalents
 
391,638

 
(200,269
)
Cash and cash equivalents - beginning of period
 
1,484,463

 
877,907

Cash and cash equivalents - end of period
 
$
1,876,101

 
$
677,638






10


PartnerRe Ltd.
Segment Information
(Expressed in millions of U.S. dollars, except percentages)
(Unaudited)
 
For the three months ended March 31, 2020
 
 
P&C segment
 
Specialty segment
 
Total
Non-life
 
Life and Health
segment
 
Corporate
and Other
 
Total
Gross premiums written
 
$
1,137

 
$
523

 
$
1,660

 
$
381

 
$

 
$
2,041

Net premiums written
 
$
1,030

 
$
476

 
$
1,506

 
$
373

 
$

 
$
1,879

(Increase) decrease in unearned premiums
 
(265
)
 
(51
)
 
(316
)
 
3

 

 
(313
)
Net premiums earned
 
$
765

 
$
425

 
$
1,190

 
$
376

 
$

 
$
1,566

Losses and loss expenses
 
(511
)
 
(389
)
 
(900
)
 
(333
)
 

 
(1,233
)
Acquisition costs
 
(192
)
 
(120
)
 
(312
)
 
(23
)
 

 
(335
)
Technical result
 
$
62

 
$
(84
)
 
$
(22
)
 
$
20

 
$

 
$
(2
)
Other (loss) income
 

 

 

 
(1
)
 
6

 
5

Other expenses
 
(18
)
 
(6
)
 
(24
)
 
(17
)
 
(45
)
 
(86
)
Underwriting result
 
$
44

 
$
(90
)
 
$
(46
)
 
$
2

 
n/a

 
$
(83
)
Net investment income
 
 
 
 
 
 
 
16

 
87

 
103

Allocated underwriting result
 
 
 
 
 
 
 
$
18

 
n/a

 
n/a

Net realized and unrealized investment losses
 
 
 
 
 
 
 
 
 
(602
)
 
(602
)
Interest expense
 
 
 
 
 
 
 
 
 
(8
)
 
(8
)
Amortization of intangible assets
 
 
 
 
 
 
 
 
 
(3
)
 
(3
)
Net foreign exchange gains
 
 
 
 
 
 
 
 
 
130

 
130

Income tax benefit
 
 
 
 
 
 
 
 
 
45

 
45

Interest in losses of equity method investments
 
 
 
 
 
 
 
 
 
(4
)
 
(4
)
Net loss
 
 
 
 
 
 
 
 
 
n/a

 
$
(422
)
Loss ratio (1)
 
66.8
%
 
91.5
%
 
75.6
%
 
 
 
 
 
 
Acquisition ratio (2)
 
25.1

 
28.2

 
26.2

 
 
 
 
 
 
Technical ratio (3)
 
91.9
%
 
119.7
%
 
101.8
%
 
 
 
 
 
 
Other expense ratio (4)
 
2.4

 
1.4

 
2.0

 
 
 
 
 
 
Combined ratio (5)
 
94.3
%
 
121.1
%
 
103.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the three months ended March 31, 2019
 
 
P&C segment
 
Specialty segment
 
Total
Non-life
 
Life and Health
segment
 
Corporate
and Other
 
Total
Gross premiums written
 
$
1,250

 
$
508

 
$
1,758

 
$
359

 
$

 
$
2,117

Net premiums written
 
$
1,113

 
$
481

 
$
1,594

 
$
350

 
$

 
$
1,944

Increase in unearned premiums
 
(438
)
 
(112
)
 
(550
)
 
(8
)
 

 
(558
)
Net premiums earned
 
$
675

 
$
369

 
$
1,044

 
$
342

 
$

 
$
1,386

Losses and loss expenses
 
(399
)
 
(313
)
 
(712
)
 
(280
)
 

 
(992
)
Acquisition costs
 
(173
)
 
(107
)
 
(280
)
 
(36
)
 

 
(316
)
Technical result
 
$
103

 
$
(51
)
 
$
52

 
$
26

 
$

 
$
78

Other income
 

 

 

 
3

 
1

 
4

Other expenses
 
(20
)
 
(8
)
 
(28
)
 
(15
)
 
(46
)
 
(89
)
Underwriting result
 
$
83

 
$
(59
)
 
$
24

 
$
14

 
n/a

 
$
(7
)
Net investment income
 
 
 
 
 
 
 
16

 
94

 
110

Allocated underwriting result
 
 
 
 
 
 
 
$
30

 
n/a

 
n/a

Net realized and unrealized investment gains
 
 
 
 
 
 
 
 
 
469

 
469

Interest expense
 
 
 
 
 
 
 
 
 
(11
)
 
(11
)
Amortization of intangible assets
 
 
 
 
 
 
 
 
 
(3
)
 
(3
)
Net foreign exchange losses
 
 
 
 
 
 
 
 
 
(25
)
 
(25
)
Income tax expense
 
 
 
 
 
 
 
 
 
(45
)
 
(45
)
Interest in earnings of equity method investments
 
 
 
 
 
 
 
 
 
21

 
21

Net income
 
 
 
 
 
 
 
 
 
n/a

 
$
509

Loss ratio (1)
 
59.1
%
 
84.8
%
 
68.2
%
 
 
 
 
 
 
Acquisition ratio (2)
 
25.6

 
29.0

 
26.8

 
 
 
 
 
 
Technical ratio (3)
 
84.7
%
 
113.8
%
 
95.0
%
 
 
 
 
 
 
Other expense ratio (4)
 
3.0

 
2.2

 
2.7

 
 
 
 
 
 
Combined ratio (5)
 
87.7
%
 
116.0
%
 
97.7
%
 
 
 
 
 
 
(1) Loss ratio is obtained by dividing losses and loss expenses by net premiums earned.
(2) Acquisition ratio is obtained by dividing acquisition costs by net premiums earned.
(3) Technical ratio is defined as the sum of the loss ratio and the acquisition ratio.
(4) Other expense ratio is obtained by dividing other expenses by net premiums earned.
(5) Combined ratio is defined as the sum of the technical ratio and the other expense ratio.

11

Supplementary Financial Information



PartnerRe Ltd.
Investment Portfolio
(Expressed in thousands of U.S. dollars, except percentages)
(Unaudited)
 
March 31, 2020
 
December 31, 2019
 
Investments:
 
 
 
 
 
 
 
 
Fixed maturities
 
 
 
 
 
 
 
 
U.S. government
$
1,146,450

 
8
%
 
$
877,196

 
6
%
 
U.S. government sponsored enterprises
792,173

 
5

 
544,520

 
3

 
U.S. states, territories and municipalities
149,656

 
1

 
157,234

 
1

 
Non-U.S. sovereign government, supranational and government related
2,609,597

 
17

 
3,255,154

 
20

 
Corporate bonds
2,602,301

 
17

 
2,662,089

 
16

 
Mortgage/asset-backed securities
3,431,361

 
23

 
3,184,521

 
20

 
Total fixed maturities
10,731,538

 
71

 
10,680,714

 
66

 
Short-term investments
672,788

 
5

 
1,003,421

 
6

 
Equities
930,892

 
6

 
1,295,164

 
8

 
Investments in real estate
67,879

 
1

 
71,834

 

 
Other invested assets (1)
2,606,734

 
17

 
3,266,009

 
20

 
Total investments
$
15,009,831

 
100
%
 
$
16,317,142

 
100
%
 
Cash and cash equivalents
1,876,101

 
 
 
1,484,463

 
 
 
Total investments and cash and cash equivalents
16,885,932

 

 
17,801,605

 
 
 
Maturity distribution:
 
 
 
 
 
 
 
 
One year or less
$
1,410,156

 
12
%
 
$
1,673,912

 
14
%
 
More than one year through five years
3,437,535

 
30

 
3,276,078

 
29

 
More than five years through ten years
2,483,786

 
22

 
2,939,624

 
25

 
More than ten years
641,488

 
6

 
610,000

 
5

 
Subtotal
7,972,965

 
70

 
8,499,614

 
73

 
Mortgage/asset-backed securities
3,431,361

 
30

 
3,184,521

 
27

 
Total fixed maturities and short-term investments
$
11,404,326

 
100
%
 
$
11,684,135

 
100
%
 
Credit quality by market value  (Total fixed maturities and short-term investments):
 
AAA
$
2,425,389

 
21
%
 
$
2,986,519

 
26
%
 
AA
6,258,273

 
55

 
5,739,019

 
49

 
A
1,487,589

 
13

 
1,706,119

 
14

 
BBB
882,484

 
8

 
931,082

 
8

 
Below Investment Grade/Unrated
350,591

 
3

 
321,396

 
3

 
 
$
11,404,326

 
100
%
 
$
11,684,135

 
100
%

Expected average duration
 
 
2.1

Yrs 
 
2.7

Yrs 
Average yield to maturity at market
 
 
2.4
%
 
 
 
2.8
%
 
Average credit quality
 
 
AA

 
 
 
AA

 
(1) Other invested assets at March 31, 2020 and December 31, 2019 include $0.9 billion and $1.4 billion, respectively, of U.S. bank loans managed under an externally managed mandate, with sales of U.S. bank loans during the first quarter of 2020 of $0.4 billion. The mandate primarily invests in U.S. floating rate, first lien, senior secured broadly syndicated loans with a focus on facility sizes greater than $300 million. The weighted average credit rating as at March 31, 2020 was B+ with the single largest issuer being 2.7% of the Company's bank loan portfolio.

12

Supplementary Financial Information


PartnerRe Ltd.
Distribution of Corporate Bonds
(Expressed in thousands of U.S. dollars, except percentages)
(Unaudited) 
March 31, 2020
 
Fair Value
 
Percentage of
Fair Value of
Corporate Bonds
 
Percentage of
Invested Assets
and Cash
 
Largest single issuer
as a percentage of
Invested Assets
and Cash
 
 
 
 
Distribution by sector - Corporate bonds
 
 
 
 
 
 
 
 
 
 
 
Financial
$
1,220,154

 
47.0
%
 
7.2
%
 
0.5
%
 

 
 
Consumer cyclical
253,238

 
9.7

 
1.5

 
0.5

 

 
 
Energy
219,548

 
8.4

 
1.3

 
0.2

 

 
 
Insurance
217,031

 
8.3

 
1.3

 
0.5

 

 
 
Consumer non-cyclical
167,997

 
6.5

 
1.0

 
0.2

 

 
 
Utilities
136,495

 
5.2

 
0.8

 
0.2

 

 
 
Industrial
125,553

 
4.8

 
0.7

 
0.2

 

 
 
Real estate and real estate investment trusts
105,635

 
4.1

 
0.6

 
0.2

 

 
 
Communications
78,419

 
3.0

 
0.5

 
0.1

 

 
 
Technology
31,666

 
1.2

 
0.2

 
0.1

 

 
 
Basic materials
28,762

 
1.1

 
0.2

 
0.1

 

 
 
Longevity and mortality bonds
17,630

 
0.7

 
0.1

 
0.1

 
 
 
 
Other
173

 

 

 

 
 
 
 
Total Corporate bonds
$
2,602,301

 
100.0
%
 
15.4
%
 
 
 
 
 
 
Finance sector - Corporate bonds
 
 
 
 
 
 
 
 
 
 
 
Banks
$
793,164

 
30.5
%
 
4.7
%
 
 
 
 
 
 
Investment banking and brokerage
232,990

 
9.0

 
1.4

 
 
 
 
 
 
Other
194,000

 
7.5

 
1.1

 
 
 
 
 
 
Total finance sector - Corporate bonds
$
1,220,154

 
47.0
%
 
7.2
%
 
 
 
 
 
 
 
AAA
 
AA
 
A
 
BBB
 
Non-Investment
Grade/Unrated
 
Total
Credit quality of finance sector - Corporate bonds
 
 
 
 
 
 
 
 
 
 
 
Banks
$

 
$
123,661

 
$
390,562

 
$
248,041

 
$
30,900

 
$
793,164

Investment banking and brokerage

 
1,492

 
61,533

 
169,964

 
1

 
232,990

Other
1,074

 
49,809

 
95,947

 
41,958

 
5,212

 
194,000

Total finance sector - Corporate bonds
$
1,074

 
$
174,962

 
$
548,042

 
$
459,963

 
$
36,113

 
$
1,220,154

% of total
0.1
%
 
14.3
%
 
44.9
%
 
37.7
%
 
3.0
%
 
100.0
%

Concentration of investment risk - The top 10 Corporate bond issuers account for 29.7% of the Company’s total corporate bonds. The single largest issuer accounts for 3.5% of the Company’s total Corporate bonds and is included in the Financial sector above.

13

Supplementary Financial Information


PartnerRe Ltd.
Composition of Net Investment Income and Net Realized and Unrealized Investment (Losses) Gains
(Expressed in thousands of U.S. dollars, except percentages)
(Unaudited)
 
For the three months ended
 
March 31, 2020
 
March 31, 2019
Fixed maturities
$
78,677

 
$
104,326

Short-term investments and cash and cash equivalents
6,357

 
4,450

Equities, investments in real estate, funds held and other
39,591

 
9,597

Investment expenses
(21,216
)
 
(8,665
)
Net investment income
$
103,409

 
$
109,708

Net realized investment gains on fixed maturities and short-term investments
$
16,458

 
$
22,917

Net realized investment (losses) gains on equities
(1,438
)
 
3,668

Net realized investment (losses) gains on other invested assets
(6,525
)
 
1,751

Net realized investment gains
$
8,495

 
$
28,336

Change in net unrealized investment (losses) gains on fixed maturities and short-term investments
$
(43,099
)
 
$
257,019

Change in net unrealized investment (losses) gains on equities
(360,579
)
 
159,474

Change in net unrealized investment (losses) gains on other invested assets
(208,280
)
 
24,280

Net other realized and unrealized investment gains (losses)
1,675

 
(331
)
Change in net unrealized investment (losses) gains
$
(610,283
)
 
$
440,442

Net realized and unrealized investment (losses) gains
$
(601,788
)
 
$
468,778


14

Supplementary Financial Information


PartnerRe Ltd.
Analysis of Non-Life Reserves
(Expressed in thousands of U.S. dollars)
(Unaudited)
 
 
As at and for the three months ended
 
March 31, 2020
 
March 31, 2019
Reconciliation of beginning and ending non-life reserves:
 
 
 
Gross liability at beginning of period
$
10,363,383

 
$
9,895,376

Reinsurance recoverable at beginning of period
(754,795
)
 
(850,946
)
Net liability at beginning of period
9,608,588

 
9,044,430

Net incurred losses related to:
 
 
 
Current year
831,219

 
723,113

Prior years
69,026

 
(10,670
)
 
900,245

 
712,443

Net losses paid
(715,687
)
 
(748,240
)
Effects of foreign exchange rate changes and other
(144,537
)
 
591

Net liability at end of period
9,648,609

 
9,009,224

Reinsurance recoverable at end of period
717,654

 
783,048

Gross liability at end of period
$
10,366,263

 
$
9,792,272

Breakdown of gross liability at end of period:
 
 
 
Case reserves
$
4,254,430

 
$
4,230,139

Additional case reserves
172,029

 
154,118

Incurred but not reported reserves
5,939,804

 
5,408,015

Gross liability at end of period
$
10,366,263

 
$
9,792,272

Gross liability at end of period by Non-life segment:
 
 
 
P&C
7,192,411

 
6,960,321

Specialty
3,173,852

 
2,831,951

Gross liability at end of period
$
10,366,263

 
$
9,792,272

Unrecognized time value of non-life reserves (1)
$
136,515

 
$
543,731

(1) The unrecognized time value, or discount, is the difference between the undiscounted liability for non-life reserves recorded and the discounted amount of these reserves. This discount is calculated by applying appropriate risk-free rates by currency and duration to the underlying non-life reserves.

15

Supplementary Financial Information


PartnerRe Ltd.
Analysis of Life and Health Reserves
(Expressed in thousands of U.S. dollars)
(Unaudited)
 
 
As at and for the three months ended
 
March 31, 2020
 
March 31, 2019
Reconciliation of beginning and ending life and health reserves:
 
 
 
Gross liability at beginning of period
$
2,417,044

 
$
2,198,080

Reinsurance recoverable at beginning of period
(16,183
)
 
(11,829
)
Net liability at beginning of period
2,400,861

 
2,186,251

Net incurred losses
332,810

 
279,340

Net losses paid
(302,268
)
 
(232,998
)
Effects of foreign exchange rate changes and other
(146,683
)
 
14,809

Net liability at end of period
2,284,720

 
2,247,402

Reinsurance recoverable at end of period
17,435

 
11,732

Gross liability at end of period
$
2,302,155

 
$
2,259,134

Life value in force (1)
$
206,900

 
$
321,300

(1) The life value in force (Life VIF) is the present value of the profits that will emerge from life policies over time and is comprised of the present value of future after-tax profits, and takes into consideration the cost of capital. The Company’s Life VIF is calculated on a going concern basis and is the sum of (i) present value of future profits on a U.S. GAAP basis which represents the net present value of projected after-tax cash flows based on Life reserves, net of deferred acquisition costs and gross of value of business acquired; (ii) cost of non-hedgeable risks; (iii) frictional costs; (iv) time value of options and guarantees; and (v) cost of non-economic excess encumbered capital.


16

Supplementary Financial Information


PartnerRe Ltd.
Natural Catastrophe Probable Maximum Losses (PMLs)
(Expressed in millions of U.S. dollars)
(Unaudited)
Single occurrence estimated net PML exposure
 
 
 
 
 
March 31, 2020
Zone
 
Peril
 
1-in-250
year PML
 
1-in-500
year PML
(Earthquake
perils only)
U.S. Northeast
 
Hurricane
 
$
850

 
 
U.S. Southeast
 
Hurricane
 
846

 
 
U.S. Gulf Coast
 
Hurricane
 
799

 
 
Caribbean
 
Hurricane
 
235

 
 
Europe
 
Windstorm
 
475

 
 
Japan
 
Typhoon
 
348

 
 
California
 
Earthquake
 
788

 
$
1,141

Japan
 
Earthquake
 
518

 
577

Australia
 
Earthquake
 
320

 
443

New Zealand
 
Earthquake
 
286

 
434

British Columbia
 
Earthquake
 
158

 
339

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, refer to the Company’s natural catastrophe PML information and definitions in the Company’s Annual Report on Form 20-F for the year ended December 31, 2019 (see Risk Management—Natural Catastrophe PML in Item 4 of the 20-F).



17

Supplementary Financial Information


PartnerRe Ltd.
Return on Common Shareholder's Equity (ROE)
(Expressed in thousands of U.S. dollars, except percentages)
(Unaudited)

 
For the three months ended
 
March 31, 2020
 
March 31, 2019
 
$
ROE (1)
 
$
ROE (1)
Net (loss) income attributable to common shareholder
(433,390
)
(27.6
)%
 
496,932

32.9
%

(1) ROE is calculated as net income or loss attributable to common shareholder divided by average common shareholder's equity, annualized for the quarter. The following is the average common shareholder's equity calculated using the sum of the beginning of period and end of period common shareholder's equity divided by two.
 
For the three months ended
Calculation of average common shareholder's equity
March 31, 2020
 
March 31, 2019
Beginning of period common shareholder's equity
$
6,565,942

 
$
5,812,287

End of period common shareholder's equity
$
6,003,575

 
$
6,272,935

Average common shareholder's equity
$
6,284,759

 
$
6,042,611



18

Supplementary Financial Information


PartnerRe Ltd.
Reconciliation of GAAP and non-GAAP measures
(Expressed in thousands of U.S. dollars)
(Unaudited)
 
 
March 31, 2020
 
December 31, 2019
Tangible book value:
 
 
 
Total shareholders' equity
$
6,707,802

 
$
7,270,169

Less:
 
 
 
Preferred shares, aggregate liquidation value at $25 per share
704,227

 
704,227

Common shareholder's equity or book value
6,003,575

 
6,565,942

Less:
 
 
 
Goodwill
456,380

 
456,380

Intangible assets, net of tax (1)
103,220

 
109,217

Tangible book value
$
5,443,975

 
$
6,000,345

 
 
 
 
Capital structure:
 
 
 
Senior notes (2)
$
1,317,810

 
$
1,327,965

Capital efficient notes (3)
62,484

 
62,484

Preferred shares, aggregate liquidation value
704,227

 
704,227

Common shareholder's equity
6,003,575

 
6,565,942

Total capital
$
8,088,096

 
$
8,660,618

(1) The intangible assets are presented in the table above net of tax of $12 million and $8 million at March 31, 2020 and December 31, 2019, respectively.
(2) The decrease in senior notes primarily relates to the foreign exchange impact of remeasuring the Euro debt into U.S. dollars at the balance sheet date.
(3) Non-consolidated debt issued externally related to Capital efficient notes (CENts) of $62 million does not appear in the debt line of the Consolidated Balance Sheets, as the finance entity that issued the debt (PartnerRe Finance II Inc.) does not meet the U.S. GAAP criteria for consolidation. The Consolidated Balance Sheets include the related intercompany notes of $70 million issued by PartnerRe U.S. Corporation to PartnerRe Finance II Inc.

19