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PartnerRe Beats Q3 Earnings Estimates, Misses on Revenues

PartnerRe Ltd.PRE reported third-quarter 2015 operating earnings of $4.42 per share that surpassed the Zacks Consensus Estimate of $2.68. With this, the company succeeded in maintaining its streak of positive earnings surpriseS in all of the last four quarters, with an average beat of 28.5%.

However, earnings decreased from $4.47 per share reported in the year-ago quarter.

Including net realized and unrealized losses on investments of $2.54 per share and amalgamation termination fee and reimbursement of expenses paid to Axis Capital of $6.58 per share, the company reported net loss of $5.08 per share in the quarter, while the year-ago figure was net earnings of $3.60 per share.

Quarter in Detail

Total operating revenue decreased 21.3% year over year to $1.3 billion attributable to 9.3% year over year lower net premiums earned and.9% decline in net investment income. The top line also missed the Zacks Consensus Estimate of $1.34 billion.

Net premiums written fell 11% year over year to $1.2 billion. Net premiums written on a constant foreign exchange basis were down 5% primarily due to decreases reported in the Catastrophe and North America Non-life sub-segments.

Total expenses increased 15% year over year to $1.61 billion. This was due to higher other expenses, which included the termination fee and reimbursement of expenses paid to Axis Capital of $315 million.

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.

Moreover, 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.

Financial Update

As of Sep 30, 2015, PartnerRe's total assets were $22 billion, lower than $22.3 billion at year-end 2014. Total investments, cash and funds that are directly managed totaled $16.3 billion as of Sep 30, 2015, down from $17.22 billion at the end of 2014, due to the foreign exchange impacts and decline in cash flows to fund the termination fee and reimbursement of expenses paid to Axis Capital.

As of Sep 30, 2015, total capital was $7.60 billion, reflecting a 3% decline from the year-end 2014 level primarily due to the net loss incurred in the first nine months of 2015 and common and preferred dividend payments. Total shareholder equity was $6.8 billion, down 4% from $7.10 billion at the end of 2014.

The company's book value per common share was down 4% to $120.67 as of Sep 30, 2015, from $126.21 at the end of 2014.

Zacks Rank

PartnerRe currently carries a Zacks Rank #3 (Hold). Among the other players in the property and casualty insurance space, the bottom line at The Chubb Corporation CB , ACE Limited ACE and RLI Corp. RLI outpaced their respective Zacks Consensus Estimate for the third quarter.

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RLI CORP (RLI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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