PartnerRe Ltd. suffered a net loss of $151.7 million, or $3.01 per share, after being hit with a $281.1 million realised and unrealised loss on investments during the third quarter of 2008.

The reinsurer, which made a profit of $262.9 million, or $4.44 per share, for the same period in 2007, incurred pre-tax realised losses mainly due to the increase in credit spreads over the quarter.

The net loss for the quarter includes pre-tax losses of $203 million as a result of Hurricanes Gustav and Ike and operating earnings were down at $121.3 million, or $2.27 per share, in this year's third quarter versus $274.2 million, or $4.78 per share, last year.

Earlier this year the company switched over to a new accounting system called FAS 159, which records changes in the value of its investment portfolio in the income statement.

But its book value held up well in the current financial crisis at $65.38 per share in the third quarter of 2008 compared to $67.96 per share in 2007, dropping by four percent year to date and flat year over year.

PartnerRe president and chief executive officer Patrick Thiele said: "In a quarter marked by large hurricane losses and extreme volatility in the financial markets, PartnerRe delivered a 13 percent operating return on beginning shareholders' equity. In addition, year-over-year, we held GAAP book value per share flat.

"Our results this quarter and for the year-to-date underscore our excellent risk management, the balance and diversification we have achieved in our underwriting and investment operations, and the strength and resilience of our balance sheet.

"2008 has been an extraordinary year on many levels. We are currently in the midst of one of the most severe financial crises since the Great Depression.

"Despite this, PartnerRe posted an operating return on beginning equity of 15 percent for the nine months of the year. We are optimistic that we will finish the full year 2008 with an operating ROE in excess of our long-term target of 13 percent, barring unusual large losses.

"Looking forward we expect that demand for reinsurance will increase as insurers look to their reinsurers for capital relief and volatility management. We also believe that their preference will be to work with only the highest quality reinsurers such as PartnerRe.

"PartnerRe has the risk appetite and the financial strength and stability to respond to an improving marketplace and provide the consistent capacity that our clients expect from us."