Bermuda-based reinsurer PartnerRe posted net income of $474.3 million for the second quarter, boosted by a lack of catastrophes and an increase in the value of investments.

The company, which is set to become the world's fourth largest reinsurer by shareholders' equity when it completes the recently agreed purchase of Paris Re, exceeded analysts' expectations with its operating earnings of $179.3 million, or $3.12 per share.

This compares to operating earnings of $183.8 million, or $3.39 per share, for the second quarter of 2008.

But a bigger slice of the net income figure was down to the rebound in the financial markets seen in the April through June period, which resulted in realised and unrealised gains on investments of $279.6 million, or $4.86 per share.

PartnerRe accounts for the change in value of investments through its net income column — something which increases volatility of results and had a negative impact on the net income figure during last year's turmoil on the financial markets.

In the second quarter of 2008, the company recorded a net loss of $26 million, due largely to investment losses of $219.1 million.

"PartnerRe had an excellent second quarter and first half of 2009, with both its reinsurance and capital markets activities performing well," PartnerRe president and chief executive officer Patrick Thiele said in the company's earnings statement last night.

"For the first six months of 2009, we achieved an operating return on beginning equity of 18 percent, and a 15 percent growth in GAAP book value per share.

"Our reinsurance results benefited from a low level of large losses while our investment operations participated fully in the improvement shown by the global capital markets."

The company's book value at June 30, 2009, has reached a record $73.85 per share, having risen 15 percent in the year to date and five percent over the past 12 months.

Annualised operating return on equity for the quarter was 19.5 percent.

PartnerRe achieved its results despite a fall in gross premiums written to $846.15 million from $968.16 million in the second quarter of 2008.

The lack of claims helped the company boost its combined ratio — the percentage of premium dollars spent on claims and expenses — to 83.5 percent in the second quarter compared to 85.9 percent in the same period of last year.

Net income for the first six months of 2009 was $615.8 million, or $10.43 per share. This net income includes net after-tax realised and unrealised gains on investments of $205.1 million, or $3.57 per share, as well as a net after-tax gain of $57 million from the purchase of some 75 percent of the company's outstanding Capital Efficient Notes in the first quarter of 2009.

This compares to net income for the first six months of 2008 was $103 million, or $1.54 per share, which included realised and unrealised losses on investments of $210.1 million.