Fitch Affirms PartnerRe’s Ratings

June 21, 2006

Fitch Ratings has affirmed the “AA” Insurer Financial Strength (IFS) rating of Bermuda-based Partner Reinsurance Company as well as the various ratings of Partner Reinsurance’s parent company PartnerRe Ltd. These include the “AA-” Issuer Default Rating (IDR), and the “A” ratings assigned to PartnerRe’s cumulative redeemable preferred securities and the trust preferred securities of PartnerRe Capital Trust I. The rating outlook is stable.

“Fitch’s very strong IDR and IFS ratings for Partner Reinsurance reflect the company’s conservative investment strategy, reserve strength, low level of reinsurance recoverables, and low reliance on retrocessional reinsurance,” said the bulletin. “Additionally, Fitch believes Partner Reinsurance has relatively lower exposure to legacy issues such as asbestos. Fitch also notes that as of year-end 2005, the company had grown its common equity at a compound annual growth rate of 14% since year-end 2001, despite suffering $900 million of catastrophe losses in 2005. Absent unusually large catastrophe losses, Fitch expects PartnerRe to post strong results through the remainder of 2006.”

Fitch also indicated that the ratings “consider Partner Reinsurance’s relatively higher exposure to low-frequency but high-severity events, an exposure highlighted by recent hurricane losses.” The rating agency noted that “PartnerRe’s results over the past five years have been relatively more volatile than many of its ‘AA’ rated peers. This volatility has been largely the result of proportionally higher catastrophe losses as a percent of PartnerRe’s total capital and normalized earnings base.

“Fitch recognizes PartnerRe’s exposure to low-frequency, high-severity events and expects PartnerRe to have an occasional loss year offset by generally strong profits in most years. As a result, PartnerRe’s ratings may be under downward pressure if the company’s average earnings do not return to a level commensurate with an ‘AA’ rating.”

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