PartnerRe Ltd.PRE

Morningstar Rating

Stock Research and Analysis

by Bill Bergman

PartnerRe's diverse risk portfolio, effective implementation of strategy, long-established relationships, and increasing relative financial strength endow the firm a narrow economic moat. Service expertise and related reputational glue bonding relationships Read more

Bulls Say

PartnerRe's reputation for financial strength and relatively high insurance and credit ratings give the firm an edge in winning sales.

The company's Bermuda tax domicile significantly reduces its corporate income tax bill.

PartnerRe has positioned itself to serve clients with global exposure, a relatively rapidly growing market segment. Read more

Bears Say

As Hurricanes Katrina, Rita, and Wilma illustrate, reinsurance is cyclical and profits can be volatile.

PartnerRe faces stiff competition from newly minted Bermuda reinsurers, as well as new capital market risk-management techniques such as weather derivatives.

The reinsurer has significant asbestos claim liabilities. Estimates of these liabilities are uncertain and have historically increased rapidly. Shareholders could be on the hook for more. Read more

Strategy

PartnerRe offers a range of reinsurance products and attempts to build valuable underwriting expertise in each of them. The company strives to construct a diversified risk portfolio to spread risk and Read more

Management

PartnerRe's governance is reasonably shareholder friendly, and our Stewardship Grade is a B. Senior managers own more than $60 million of stock, mainly in options, which should promote responsible capital allocation. Executive incentive pay emphasizes Read more

Profile

Formed in 1993, PartnerRe offers property-casualty, catastrophe, life, and specialty reinsurance to a client base of more than 1,800 insurance firms, banks, and other financial Read more

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