) fourth-quarter 2013 operating earnings per share of $2.91 beat
the Zacks Consensus Estimate by a penny. However, results
outpaced the year-ago quarter number of $1.55 a share, primarily
on lower share count.
Improved premiums and higher net realized and unrealized
investment gains were partially offset by lower investment income
and higher expenses, while underwriting results improved from the
comparable year-ago figure. Subsequently, operating net income
surged 64.5% year over year to $157.4 million.
Operating earnings were calculated after payment of preferred
dividends. Earnings also excluded after-tax net realized and
unrealized investment gains of $1.70 per share, net foreign
exchange gains of 7 cents per share and interest income from
equity investments of 8 cents per share.
Including these items, GAAP net income of PartnerRe amounted
to $265.6 million or $4.76 per share against $104.6 million or
$1.56 per share in the year-ago quarter.
Total revenue escalated 24.8% to $1.64 billion from $1.31
billion in the year-ago quarter. The figure also surpassed the
Zacks Consensus Estimate of $1.44 billion.
This included net premiums earned worth $1.42 billion (up
21.7% year over year), net investment income of $114.4 million
(down 15.7%), pre-tax net realized and unrealized investment
gains of $99.4 million against a mere $5.1 million in the
year-ago quarter, and other income of $3.4 million, down from
$3.8 million in the year-ago period. Meanwhile, net premiums
written increased 28.9% year over year to $1.19 billion.
During the reported quarter, total expenses jumped 14.9% year
over year to $1.36 billion. Nevertheless, underwriting profits
escalated to $96 million from $13 million in the year-ago
Non-life combined ratio also improved to 88% from 95.3% in the
year-ago period. This includes 14.9 basis points or $173 million
related to net favourable development on prior accident years
across all non-life segments except the catastrophe segment.
Moreover, technical ratio improved across most non-life and
life segments. The technical result for the reported quarter was
$224 million, growing 83.6% over the year-ago quarter.
Highlights of Full-Year 2013
PartnerRe reported operating earnings per share of $12.79 in
2013, missing the Zacks Consensus Estimate of $12.90 but
outpacing $10.43 recorded in 2012. Operating net income increased
8.7% year over year to $721.7 million. GAAP net income for
PartnerRe stood at $641.2 million or $10.58 per share in 2013
compared with $1.16 billion or $16.87 per share in 2012.
Total revenue slipped 0.4% year over year to $5.54 billion in
2013, also lagging the Zacks Consensus Estimate of $5.97 billion.
Total expense increased 14.1% to $4.83 billion. Operating expense
included $58 million of restructuring expenses. Nonetheless,
non-life combined ratio improved to 85.3% from 87.8% in 2012.
As of Dec 31, 2013, PartnerRe's total assets were $23.04
billion, up from $22.98 billion at 2012-end. Total investments,
cash and funds held and directly managed stood at $17.4 billion,
down 3% from $18 billion at 2012-end. As of Dec 31, 2013, total
capital was $7.5 billion (down from $7.7 billion at 2012-end) and
total shareholder equity was $6.77 billion, down from $6.93
billion at 2012-end.
PartnerRe's net non-life loss and loss expense reserves were
in line with 2012-end level at $10.4 billion. The company's book
value per common share improved 8.4% to $109.3 in 2013, compared
with $100.84 at the end of 2012.
Annualized operating ROE soared to 11.5% in the reported
quarter from 7.3% at the end of the prior-year quarter, while
annualized net income ROE stood at 18.9%, significantly higher
than 7.4% in the prior-year quarter.
Annualized operating ROE improved to 12.7% at 2013-end from
12.3% at the end of the prior quarter. However, annualized net
income ROE stood at 10.5%, lower than ROE of 19.9% in 2012.
Share Repurchase Update
On Sep 12, 2013, the board approved and brought into effect a
stock repurchase authorization of up to 6.0 million shares. This
replaced the previous authorization of 6.0 million shares that
was approved in Mar 2013.
Accordingly, the company bought back about 1.1 million shares
for $101 million during the fourth quarter. An additional 0.62
million shares have been repurchased for $61 million so far in
the ongoing first quarter (until Feb 3, 2014), leaving about 4.3
million shares available for repurchase under the current
On Jan 29, 2014, the board of PartnerRe approved a 5% hike in
its regular quarterly dividend payout to 67 cents per share from
the prior 64 cent and is now shelling out $2.68 per share
The current hike marks the 21
consecutive year of dividend increasesince the company's
commencement. The raised quarterly dividend will be paid on Feb
28, 2014 to shareholders of record as on Feb 18, 2014.
On Nov 29, 2013, PartnerRe paid a regular quarterly dividend
of 64 cents per share to shareholders of record as on Nov 18,
While PartnerRe carries a Zacks Rank #3 (Hold), some
better-ranked insurers include
White Mountains Insurance Group Ltd.
Endurance Specialty Holdings Ltd.
). All these stocks sport a Zacks Rank #1 (Strong Buy).
ENDURANCE SPLTY (ENH): Free Stock Analysis
PARTNERRE LTD (PRE): Free Stock Analysis
RLI CORP (RLI): Free Stock Analysis Report
WHITE MTN INS (WTM): Free Stock Analysis
To read this article on Zacks.com click here.