PartnerRe Ltd.'s profits more than halved during the second quarter of 2010 as the company incurred the cost of a voluntary severance plan for Paris Re employees and was hit by the combined impact of the Chilean earthquake and the Deepwater Horizon losses during the first half of this year.

The reinsurer's net income was $190.9 million, or $2.31 per share, for the quarter compared to $474.3 million, or $8.10 per share, for the same period last year.

The net income included net after-tax realised and unrealised gains on investments of $140.3 million, or $1.74 per share, versus $279.6 million, or $4.86 per share, in 2009.

Net income for the first half of 2010 was down at $270.6 million, or $3.13 per share compared to $615.8 million, or $10.43 per share, during the first half of last year.

Operating earnings for the first six months of 2010 were $109.8 million compared to $335 million for the first six months of 2009.

The company managed to beat Bloomberg analysts' estimates of $1.68 per share for operating earnings for the second quarter by returning a figure of $1.92 per share.

PartnerRe CEO Patrick Thiele said: "We had good second quarter 2010 results although there were a number of cross-currents, including the cost of a voluntary termination plan related to the integration of Paris Re.

"For the half year, we showed strong net written premium growth of 35 percent, while operating earnings were down due to the combined impact of the Chilean earthquake and the Deepwater Horizon losses, reflecting the normal volatility we expect in our results."

He added: "Our July 1 renewals were consistent with those at January 1, and expected profitability was reasonable considering the current low level of interest rates and assuming a continuing low underlying loss trend.

"This current market environment, which may last for some time, validates our decision to purchase Paris Re last year. We have a larger more diversified book of business which gives us greater flexibility in generating shareholder value over the long-term."

Net premiums written for the second quarter of 2010 were $1.1 billion versus $844.7 million in the second quarter of 2009.

Total revenues for the second quarter of last year were $1.3 billion, essentially flat with last year's second quarter and included $1.1 billion of net premiums earned, compared to $826.1 million in the second quarter of 2009.

Net investment income rose to $174.5 million from $135.6 million in the second quarter of 2009, with pre-tax net realised and unrealised investment gains of $46 million compared to pre-tax net realised and unrealised investment gains of $306.5 million for the second quarter last year.

The company's non-life segment reported net premiums written of $939 million for the second quarter of 2010 compared to $724 million in the same period in 2009. The combined ratio was 89.8 percent versus 83.5 percent last year.

PartnerRe repurchased 4.9 million shares worth approximately $369 million during the second quarter, buying a total of 7.9 million shares costing approximately $600 million during the first six months of 2010.

Approximately two million shares remain under the current repurchase authorisation of eight million shares.

Separately, the company announced yesterday that its board of directors declared a quarterly dividend of 50 cents per share, payable on September 1, 2010, to common shareholders of record on August 20, 2010, with the stock trading ex-dividend commencing August 18, 2010.