Executive Summary

Q1 2016 net income was $201.4M (annualized net income ROE 13.3%); operating earnings were $44.2M (annualized operating ROE 2.9%), with both metrics materially impacted by $60.0M after-tax transaction-related costs tied to the EXOR closing; excluding these costs, operating ROE was 6.9% and net income ROE 17.3% .
Underwriting performance weakened: Non-life combined ratio rose to 94.3% (vs 82.8% in Q1 2015) despite a sizable 21.0 points ($183M) of favorable prior-year reserve development; investment gains ($167M pre-tax) drove the quarter’s profit amid lower risk-free rates .
Corporate actions dominated: EXOR completed the acquisition on March 18, 2016; common shares were delisted, a special $3.00/share dividend and a $0.13 pro‑rata dividend were paid, and preferred shareholders received $42.7M cash plus exchange offers that introduce restrictions on common distributions through 2020 .
Guidance: No quantitative revenue/EPS guidance was provided; management emphasized navigating difficult reinsurance market conditions, absence of major cats, and continued favorable reserve development; leadership changes include Emmanuel Clarke as CEO and Mario Bonaccorso as CFO .
Estimates: S&P Global consensus EPS and revenue estimates were unavailable for PRE-PJ due to privatization and mapping limitations; comparisons to Street were not possible (see Estimates Context) (consensus unavailable).

What Went Well and What Went Wrong

What Went Well
- Strong investment performance: pre-tax net realized and unrealized investment gains of $167M, primarily from declines in U.S./European risk-free rates, bolstered total revenues to $1.417B despite lower premiums .
- Reserve releases: Non-life saw 21.0 points ($183M) of favorable prior-year development across all sub-segments, supporting segment results amid pricing pressure .
- Strategic progress: EXOR acquisition closed, recapitalizing the company with total capital flat at $7.7B and book/tangible book at $6.1B/$5.5B, positioning for long-term franchise strength; CEO Clarke: “solid start to 2016…with our new ownership now set…operating ROE of 6.9%…reflects continuing difficult conditions…absence of major catastrophes and continued favorable reserve development” .
What Went Wrong
- Underwriting margin compression: Non-life combined ratio deteriorated to 94.3% (vs 82.8% LY), with Global (Non‑U.S.) P&C posting a 113.2% technical ratio despite favorable development, highlighting pressure in motor and property lines .
- Premium contraction: Net premiums written fell 9% (down 5% ex-FX) and net premiums earned fell 8% (down 4% ex-FX), with declines across most Non-life sub-segments and Life & Health (down 12% NPW) .
- Transaction-related costs: Other expenses rose to $153M, including $66M pre-tax related to the EXOR closing (accelerated stock-based comp and deal costs), which depressed operating ROE and operating earnings .

Financial Results

Metric	Q3 2015	Q4 2015	Q1 2016
Total Revenues ($USD Millions)	$1,399.2	$1,379.6	$1,416.7
Net Premiums Earned ($USD Millions)	$1,412.1	$1,294.5	$1,141.7
Net Investment Income ($USD Millions)	$117.1	$107.9	$103.0
Net Realized & Unrealized Investment Gains/Losses ($USD Millions)	$(133.0)	$(24.4)	$167.2
Net Income Attributable to Common ($USD Millions)	$(243.3)	$162.3	$201.4
Operating Earnings Attributable to Common ($USD Millions)	$211.6	$183.9	$44.2
Non-life Combined Ratio (%)	82.8%	86.5%	94.3%

Segment breakdown (Q1 2016):

Segment (Q1 2016)	Net Premiums Written ($USD Millions)	Technical Ratio (%)	Net Favorable Prior-Year Development ($USD Millions)
North America	$481	86.9%	$81
Global (Non‑U.S.) P&C	$269	113.2%	$23
Global Specialty	$333	85.0%	$69
Catastrophe	$141	10.3%	$10
Life & Health (Allocated underwriting result)	—	—	$15 (favorable prior year)

Key performance indicators:

KPI	Q1 2015	Q3 2015	Q4 2015	Q1 2016
Operating ROE (%)	9.6%	14.0%	11.9%	2.9%
Net Income ROE (%)	14.8%	(16.1)%	10.5%	13.3%
Effective Tax Rate on Operating / Non‑operating (%)	—	12.9% / 3.4%	(6.6)% / (72.0)%	23.6% / 7.6%
Total Investments, Cash & Funds Held ($USD Billions)	—	$16.3	$16.5	$16.2
Total Capital ($USD Billions)	—	$7.6	$7.7	$7.7
Book Value / Tangible Book Value ($USD Billions)	—	—	$6.9 / $5.5	$6.1 / $5.5

Notes: Q1 2016 per-share metrics were deemed not meaningful post-EXOR closing; PartnerRe redefined Annualized Operating ROE methodology and recast comparative data .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Common dividends	Through 12/31/2020	Prior cadence: $0.70/share declared on 2/8/16 for Q4 2015	Restrictions in new preferred shares: company generally restricted from certain distributions and common dividends until 12/31/2020; permitted if quarterly distributions are less than 67% of quarterly net income	Restricted
Common share status	March 2016	Listed on NYSE	Common shares delisted March 18, 2016 upon EXOR closing; $137.50/share cash consideration, $3.00 special dividend, $0.13 pro‑rata dividend for Mar 1–17	Taken private; payouts completed
Preferred shareholders	Q1 2016	Planned 100 bps dividend rate increase contingent on IRS ruling	IRS declined ruling; EXOR to pay $42.7M cash ($1.25/share) to preferred holders; subsequent exchange offers launched (Series G/H/I) with extended redemption dates	Cash payment + exchange offers
Quantitative financial guidance	2016	Not specified	Not provided; management commentary focused on market conditions, underwriting discipline, and integration under EXOR	Maintained (no guidance)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2015, Q4 2015)	Current Period (Q1 2016)	Trend
Market conditions/pricing	Competitive reinsurance markets; renewal premium volume down ~5%; distraction from M&A activity	“Continuing difficult conditions across nearly all reinsurance markets”	Persistent pressure
Catastrophe & large losses	Tianjin explosion impact: Q3 (5.4 pts), 9M (2.0 pts); Cat sub-segment technical ratio 33.6% in Q3	Absence of major catastrophes in Q1 2016; Cat technical ratio 10.3%	Favorable in Q1
Reserve development	Significant favorable prior-year development: Q3 (22.2 pts), Q4 (18.7 pts)	21.0 pts ($183M) favorable prior-year development across all Non-life sub-segments	Continuing tailwinds
Investment performance	Q3/Q4 net investment losses from credit spread widening/equity declines	Pre‑tax gains $167M driven by declines in risk-free rates	Rebound
Capital actions/ownership	Axis termination fee ($315M) hit Q3; preparation for EXOR closing	EXOR acquisition closed; common delisted; special/pro‑rata dividends; preferred exchange offers	Transition completed
Leadership changes	Interim CEO shifts; Board composition evolving	John Elkann appointed Chairman; Emmanuel Clarke named CEO; Mario Bonaccorso appointed CFO	New leadership consolidated

Note: No earnings call transcript was available for Q1 2016; themes reflect press releases and SEC filings .

Management Commentary

Emmanuel Clarke (CEO): “We had a solid start to 2016 that culminated with the closing of the EXOR acquisition…Our performance for the quarter resulted in an operating ROE of 6.9%, which reflects continuing difficult conditions across nearly all reinsurance markets, an absence of major catastrophes and continued favorable reserve development.”
John Elkann (Chairman): “I am honored to assume the role of Chairman of PartnerRe… appoint from within the company a CEO of the caliber and experience of Emmanuel Clarke. His intimate knowledge… will prove crucial as we embrace the challenges and the many exciting opportunities…”
Emmanuel Clarke (on CFO appointment): “The additions of Mario, Charlie and Marvin to the Executive Committee further strengthen our leadership team… bringing new skills, deep experience and a fresh outlook as we seek to take PartnerRe to the next level.”

Q&A Highlights

No Q1 2016 earnings call transcript was available in the company’s documents; therefore, no Q&A themes or clarifications could be extracted [ListDocuments result showed 0 transcripts].

Estimates Context

S&P Global consensus EPS and revenue estimates for PRE-PJ were unavailable due to missing CIQ mapping and the company’s privatization in March 2016; as a result, comparisons to Street expectations cannot be made for Q1 2016 (consensus unavailable).

Key Takeaways for Investors

Profit quality skewed to investments: Investment gains (+$167M) offset weaker underwriting (Non-life combined ratio 94.3%); watch sustainability if rates reverse .
Underwriting discipline remains critical: Global (Non‑U.S.) P&C’s 113.2% technical ratio signals pressure in motor/property; favorable reserve releases are supporting earnings, but underlying pricing/mix warrants scrutiny .
EXOR ownership reshapes capital policy: Common shares delisted; special/pro‑rata dividends paid; preferred exchange terms introduce constraints on common distributions through 2020 (≤67% of quarterly net income), affecting payout expectations .
Leadership stabilized: Clarke (CEO) and Bonaccorso (CFO) appointments align with EXOR oversight; expect focus on franchise strength, underwriting profitability, and capital allocation within new governance .
Book/tangible equity stable: Book value/tangible book ~$6.1B/$5.5B and total capital $7.7B remained flat post-closing; balance sheet conservatism persists .
Near-term trading lens: Common equity is private; preferreds remain listed with exchange offers—opportunities and constraints are now primarily within preferred instruments .
Monitor reserve trends and investment beta: Continued favorable reserve development is a tailwind; investment gains are rate-sensitive—both are key drivers of quarterly volatility .

PARTNERRE LTD (PRE-PJ)·Q1 2016 Earnings Summary