PartnerRe Ltd. (PartnerRe) has announced a complete buy out of Paris Re, a relatively smaller reinsurance company, for a consideration of approximately US$1,658.6 mn in an all stock deal. The deal will increase the company's asset base and diversify its operational risks. Based on our fundamental outlook and current price level, we maintain our BUY rating for the NYSE common stock over our 6-12 month investment horizon. We will reassess the NYSE common stock rating for PartnerRe…

Going forward, we expect the hardening of premium rates to support top-line, despite the weakness in global economic conditions. Although we are concerned about increased claims expenses, with Tropical Storm Risk predicting 2009 to be another active year for hurricane activity, the stable outlook for the reinsurance industry from S&P;’s, A.M. Best and Moody’s is encouraging. The company has witnessed a modest 2.8% y-o-y decline in…

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On 01 December 2008, PartnerRe announced an increase in its estimates for claims expenses from Hurricane Ike to approximately US$305 mn, with the impact expected to be partially limited by a higher level of catastrophe-exposed premiums earned in the second half of the year. However, the increase in claims estimate does not have a significant impact on our valuation as we had already factored in high further losses from Hurricane…