02 financial highlights 15 latin america and the caribbean€¦ · see page 10 for a discussion of...

Our 2009 Annual Report on Form 10-K and the proxy statement for our 2010 Annual Meeting (to be held in New York on May 20, 2010) are available on the Investor Information section of our website, www.transre.com. This Operating Review and our Annual Report are also available on the enclosed CD-ROM.

Adopting the Notice & Access rules approach allows us to reduce the number of printed copies of our traditional Annual Report significantly, reducing the associated environmental impact.

We would be delighted to hear from you with any comments or questions you may have regarding the content at [email protected].

02 FinancialHighlights

03 LettertoStockholders

09 Finance

10 Ten-YearSummary

12 RegionalReview

13 UnitedStatesandCanada

15 LatinAmericaandtheCaribbean

16 International

20 BoardofDirectors

21 Officers

22 OurOffices

69831tr_cvr 2 3/2/10 9:09 PM

A new era for Transatlantic Re:

We are energized (充滿活力),

optimistic (otimista) and confident

(ufny) about our future. We have

a new perspective (Eine neue

Perspektive) and a new orientation

(nouvelle direction), and we

are newly motivated (enfrentamos

el futuro motivados).

This review captures our

enthusiasm and gives you

a sense of who we are.

69831tr_txt 1 3/2/10 9:51 PM

Financial Highlights »

Net Income ($ Millions)

62

90

71

91

72

92

133

93

102

94

132

95

155

96

186

97

248

98

187

99

212

00

19

01

169

02

304

03

255

04

38

05

428

478

06

487

07

102

08 09

Stockholders’ Equity ($ Billions)

0.42

90

0.50

91

0.56

92

0.77

93

0.76

94

0.99

95

1.14

96

1.36

97

1.61

98

1.64

99

1.86

00

1.85

01

2.03

02

2.38

03

2.59

04

2.54

05

2.96

06

3.35

07

3.20

4.03

08 09

($ in millions, except per share data and ratio) 2009 2008 Change%

NetPremiumsWritten $ 3,986 $ 4,108 (3)%

NetInvestmentIncome 467 440 6

NetIncome 478 102 367

OperatingIncome(1) 517 379 37

NetIncomePerCommonShare–Diluted 7.15 1.53 367

NetOperatingIncomePerCommonShare–Diluted(1) 7.74 5.68 36

CombinedRatio 93.5% 98.6% (5)

InvestmentsandCash 12,511 10,518 19

TotalAssets 14,944 13,377 12

Stockholders’Equity 4,034 3,198 26

BookValuePerCommonShare 60.77 48.19 26

02 | 03 Transatlantic Re » 2009 Operating Review

(1)RepresentsaperformancemeasurewhichisbasedonamethodologyotherthanGenerallyAcceptedAccountingPrinciplesintheUnitedStates(“GAAP”).Seepage10foradiscussionofthenon-GAAPmeasureandareconciliationtothemostdirectlycomparableGAAPfigure.

69831tr_txt 2 3/2/10 9:52 PM

Letter to Stockholders

Although this is our first letter together,

it is the twentieth such letter since

your company went public. Rather

than celebrate the financial milestones

reached this past year, we want to

tell you more about what makes this

company unique – and how that

uniqueness will help us navigate the

forces that affect us today and shape

our growth for tomorrow. »

www.transre.com

69831tr_txt 3 3/2/10 9:52 PM

As a global reinsurer, Transatlantic Re is in the risk business. All of the company’s focus and efforts, the services it offers and the prices it quotes seek to optimize the risk/reward return on stockholders’ capital and to grow book value per share. Our company’s entire culture is based upon ensuring that Transatlantic Re remains fiscally sound, so that it can pay the claims of clients and to reward stockholders.

Transatlantic Re exists because the future is uncertain. Our expertise lies in realistically applying probability theory through scenario planning and portfolio reviews. Our people analyze trends, eliminate variables and develop loss mitigation recommendations. The goal of all this work is to understand and contain risk exposures: to avoid undue concentration or aggregation of risk – namely, systemic exposure. Having too many eggs in one basket has never been a good strategy, and it is one that the company has successfully avoided for 30 years.

We have built a global platform diverse in people, products and territories. It has helped us to create an enviable franchise and an infrastructure that has allowed us to survive many crises over the years – ranging from catastrophe events, systematic underpricing of business, the government takeover of our major stockholder and the recent financial crisis.

However, we refuse to rest on our laurels. Internally, we continue to enhance our regulatory,enterprise risk management and capital management frameworks to ensure our future success.

Externally, likely regulatorychanges and the effect of alternativestructureson the introduction and departure of capital in the marketplace are the forces that will play a large and growing role in our future.

Forces for Change

There is no need for us to go over the past year’s economic news. Let us simply note that we reacted to developments through price adjustments and risk selection, as we always do. While credit markets were frozen, we were open for business every day, quoting and assuming risks as usual. Following the recent rebound in investment values, and a benign year for insured natural catastrophes, we have continued to quote and assume risks as usual.

We have built a global platform diverse in people,

products and territories.


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Regulatory Change

There is no question that regulatory change, and indeed tightening, will be a key trend in the near to medium term. We will see the implementation of Solvency II in Europe and the resolution of alien collateralization and jurisdictional questions in the United States. There will also be increased pressure on offshore taxation and accounting policies. Therefore, it is clear that the compliance required of reinsurers will be great going forward.

As Transatlantic Re faces regulatory changes, we issue one plea: that any change of regulatory regime will truly replace the existing one. Creating another regulator or adding another layer of governance where none exists today is to repeat lessons we should have learned from past experience. Just as digitization only benefits the bottom line if parallel analog processes are switched off (think of unplugging fax machines and printers), so 21st century regulatory oversight must not repeat the “smorgasbord” approach we have seen to date.

We must also continue to remind everyone that the reinsurance industry fosters wealth building and wealth protection by individuals and the economy as a whole. To further this process, Transatlantic Re became a founding member of the Global Reinsurance Forum, introduced in Monte Carlo last year, which will also work to develop industry positions on the regulatory, legal, tax and accounting developments affecting our company and its peers.

Enterprise Risk Management (ERM)

Combined with potential regulatory changes, ERM will likely require reinsurers to carry more capital per unit of risk assumed. This requirement will reduce the overall return of our industry unless we see commensurate price rises, particularly for casualty risks.

ERM and economic capital models are the future of our business: they drive return optimization and risk assumption. We credit the adoption of ERM tools with the maintenance of overall industry-wide discipline that we saw during the most recent renewals.

MILLION

NET INCOMETOTALED

www.transre.com

69831tr_txt 5 3/2/10 9:52 PM

Alternative Structures

Convergence between the reinsurance industry and the capital markets is a topic we are monitoring closely, despite the temporary interruption of deals last year that highlighted the current relative immaturity of alternative structures. Nonetheless, we applaud the innovativeness of these deals – and will continue to work on such structures and take advantage of related opportunities when appropriate. However a deal is structured, it is the underlying underwriting and actuarial pricing of the risk transfer – our core expertise – that is important.

Capital Management

Our most significant internal change took place last summer: the company became a truly independent reinsurance organization when AIG reduced its ownership share from 59 percent to below 14 percent. Transatlantic Re did not receive any of the sale proceeds but did acquire more than 100 new long-term institutional stockholders.

Rating agencies viewed the change favorably. As Standard & Poor’s said in its most recent note, its expectation is that “Transatlantic’s management team will maintain its longstanding strategy amid its parting from AIG’s majority control, from which the company emerged unscathed.” S&P went on to say, “We expect that Transatlantic’s competitive position will remain very strong as the company continues to expand internationally while maintaining its excellent reputation with brokers and clients.”

Clients and brokers viewed the change favorably as well. The company received a significant number of new account submissions in the most recent renewal season. The greatest gains occurred in Europe, where a move towards greater syndication benefitted companies like ours that had been shut out of certain programs in the past.

Credit markets also viewed the change favorably. We are acutely aware, however, that raising long-term book value per share requires intense capital management, as we continue to seek to balance the interests of our clients, rating agencies, regulators and stockholders. Last fall, the company took advantage of an historically low interest rate environment by implementing a highly successful and eagerly subscribed debt offering.

In addition, the company established a stock repurchase program at the end of the year. These actions together demonstrate active management of stockholders’ capital. Our company now


BILLION

TOTAL STOCKHOLDERS’ EQUITY ENDED 2009 AT

69831tr_txt 6 3/2/10 9:52 PM

has the flexibility to retire upcoming debt maturities, buy back common stock and further enhance its capital position.

While we do not rule out mergers and acquisitions as part of our capital management strategy, our current stance might be described as one of vigilant skepticism.

Our Constituents

Corporate Governance – Board of Directors

Following the secondary public offering, Dick Press was elected by the Board to be its non-executive Chairman, while Bob Orlich remained President & Chief Executive Officer.

Together, we thank all members of the Board for their work this past year, especially those who served on the Special Committee. That key matters were so successfully resolved owes a great deal to their time and effort – and we greatly appreciate their execution of their duties with grace, patience and good humor.

We also note two departures from the Board this year.

At an extremely challenging time for the world economy, C. Fred Bergsten stepped down to devote his full attention to his leadership of the Peterson Institute of International Affairs. We are extremely grateful to Fred, a world-renowned scholar of macroeconomics, for his distinguished service and his contributions to the company’s success for more than a decade.

Recently, Bill Poutsiaka resigned from the Board to pursue other employment opportunities which will require a substantial amount of his time and attention. Bill’s knowledge, experience and insight have greatly added to his service on the Board and his contributions to several of its committees. We wish him well in his future endeavors.

Our Staff

Realizing our company’s independence has produced a number of changes, as a result of which we recruited several key people to supplement our existing team.

www.transre.com

We received many new account submissions in

the most recent renewal season.

69831tr_txt 7 3/2/10 9:52 PM

Robert F. Orlich President & Chief Executive Officer

Richard S. Press Chairman

That the integration of these changes and the new staff was so seamless is a testament both to the skill of our Human Resources department and to the strength and vitality of our culture. The entire staff did what they always do, with exemplary diligence. They continued every day to negotiate with brokers and clients, agree on terms and complete transactions, maintaining a “business as usual” stance during a period that could be described in many ways, but hardly that.

We are both exceptionally pleased and honored to recognize the ongoing achievements of our staff. We will continue to challenge and support them, tapping their huge reservoir of experience in the workplace and encouraging their volunteer efforts in their local communities.

Our Clients and Brokers

Transatlantic Re’s broad product offering, global footprint, local knowledge and strong balance sheet will help the company navigate the challenges ahead. But we know that we could not have made the progress detailed in this review, and could not hope to continue moving ahead in the future, without the support and mutual respect we share with our clients and their brokers.

Our clients are buying a promise from us – that we will be here when they need us, that we will pay what we owe and that we will pay quickly.

Our company has been so reliable for so long, through many market cycles, because of our resilience. We appreciate your continuing conviction that Transatlantic Re is the right risk partner for you.

Our Stockholders

We are delighted to have welcomed so many new long-term institutional investors in the past year. We are gratified by the faith in us that you have displayed. We will continue to expand and develop our expertise in all our product lines and will seek to maintain our leadership positions in professional liability and property catastrophe reinsurance. We thank you for your continued support.


69831tr_txt 8 3/2/10 9:52 PM

Finance »

Our key attributes are financial strength and flexibility.

The year 2009 presented Transatlantic Re with its fair share of challenges. We had to manage our business while the economic outlook was still fragile – and as we established our operational independence. We were able to accomplish both tasks successfully, due to our continued focus on our key attributes: financial strength and flexibility.

On the investment side, maintaining these two attributes called for continuing conservatism, rooted in our belief that the risk we assume through our underwriting should not be compounded by additional significant investment risk. To wit, Transatlantic Re has never reported an annual net loss as a public company. In addition, our strict underwriting and investment discipline has provided attractive, stable returns to our stockholders over time.

During the year, we changed investment advisors. The selection process presented us with fresh ideas and analyses to support our own views. Our average portfolio duration is currently 3.7 years. This low level is in keeping with our liability duration – and also provides us with flexibility, given the potential for medium-term interest rate hikes.

We have kept our asset quality extremely high. Approximately two thirds of our fixed maturities portfolio is in municipal bonds, while asset-backed fixed maturities represent only 3% of our total investment portfolio.

As investment values recovered significantly following the rebound of the credit and equity markets, so did our pre-tax unrealized investment gains. At the same time, our other-than-temporary impairment write-downs dropped dramatically.

Our strong operating cash flows, totaling more than $3 billion over the past three years, have bolstered Transatlantic Re’s liquidity and financial flexibility.

We demonstrated our focus on flexibility on the debt side, where we took advantage of varying market conditions to buy back and retire debt early in 2009 – and to issue new debt late in the year. On the equity side, we launched a common stock repurchase program late in 2009.

Our finance team is committed to providing support and oversight to our worldwide teams and clear financial data and analytical insight to our stakeholders. I am delighted to welcome new team members – focused on investor relations, treasury and accounting – who will help support us in that effort.

Steven S. SkalickyChief Financial Officer

www.transre.com

69831tr_txt 9 3/2/10 9:52 PM


Years Ended December 31, 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000

(in millions, except ratios and per common share amounts)

StatementofOperationsData

Net premiums written $3,986 $ 4,108 $ 3,953 $ 3,633 $ 3,466 $ 3,749 $ 3,341 $ 2,500 $ 1,906 $ 1,659

Net premiums earned 4,039 4,067 3,903 3,604 3,385 3,661 3,171 2,369 1,790 1,632

Net investment income 467 440 470 435 343 307 271 252 240 234

Realized net capital gains (losses) (71) (436) 9 11 40 22 10 (6) - 33

Revenues 4,446 4,083 4,382 4,049 3,768 3,990 3,452 2,616 2,030 1,899

Income (loss) before income taxes 596 3 596 540 (46) 276 387 188 (34) 268

Net income $ 478 $ 102 $ 487 $ 428 $ 38 $ 255 $ 304 $ 169 $ 19 $ 212

Reconciliation to non-GAAP measure:

Total realized net capital (gains) losses, net of tax(1) 46 283 (6) (7) (26) (15) (7) 4 - (22)

(Gain) on early extinguishment of debt, net of tax(1) (7) (6) - - - - - - - -

Net operating income(2) $ 517 $ 379 $ 481 $ 421 $ 12 $ 240 $ 297 $ 173 $ 19 $ 190

GAAPRatios

Loss 66.3% 71.5% 67.6% 68.3% 85.0% 75.2% 70.4% 75.8% 87.2% 73.4%

Underwriting expense 27.2 27.1 27.6 27.6 27.2 26.1 26.2 26.6 28.1 26.6

Combined 93.5 98.6 95.2 95.9 112.2 101.3 96.6 102.4 115.3 100.0

PerCommonShare(diluted)(3)

Net income $ 7.15 $ 1.53 $ 7.31 $ 6.46 $ 0.57 $ 3.85 $ 4.60 $ 2.57 $ 0.29 $ 3.23


Total realized net capital (gains) losses, net of tax(1) 0.69 4.25 (0.09) (0.11) (0.39) (0.22) (0.09) 0.06 - (0.33)

(Gain) on early extinguishment of debt, net of tax(1) (0.10) (0.10) - - - - - - - -

Net operating income(2) $ 7.74 $ 5.68 $ 7.22 $ 6.35 $ 0.18 $ 3.63 $ 4.51 $ 2.63 $ 0.29 $ 2.90

Cash dividends declared $ 0.79 $ 0.73 $ 0.62 $ 0.53 $ 0.46 $ 0.39 $ 0.34 $ 0.32 $ 0.30 $ 0.28

BalanceSheetData(atyear-end)

Investments and cash $12,511 $ 10,518 $ 12,756 $ 11,336 $ 9,242 $ 8,287 $ 6,867 $5,588 $5,004 $ 4,391

Assets 14,944 13,377 15,484 14,268 12,365 10,605 8,708 7,287 6,741 5,523

Unpaid losses and loss adjustment expenses 8,609 8,124 7,926 7,468 7,113 5,941 4,805 4,033 3,748 3,077

Unearned premiums 1,188 1,220 1,227 1,144 1,082 1,057 917 708 554 419

Senior notes 1,033 722 747 747 746 - - - - -

Stockholders’ equity 4,034 3,198 3,349 2,958 2,544 2,587 2,377 2,031 1,846 1,856

Book value per common share(3) $ 60.77 $ 48.19 $ 50.56 $ 44.80 $ 38.60 $ 39.30 $ 36.24 $ 31.03 $ 28.26 $ 28.47

ReturnonEquity

GAAP return on equity 13.2% 3.1% 15.4% 15.6% 1.5% 10.3% 13.8% 8.7% 1.0% 12.1%




Operating return on equity(2) 14.3% 11.6% 15.3% 15.3% 0.5% 9.7% 13.5% 8.9% 1.0% 10.9%

Ten-Year Summary of Selected Financial Information »

The financial information in this annual review includes performance measures called Net Operating Income (“NOI”), NOI Per Common Share (diluted) and Operating Return on Equity (“Operating ROE”) which are not defined under GAAP. NOI is defined as GAAP net income excluding realized net capital gains (losses) and gain on early extinguishment of debt, net of taxes. NOI Per Common Share (diluted) represents NOI divided by average common shares outstanding on a diluted basis. Operating ROE is defined as NOI divided by the average of beginning and ending stockholders’ equity. In addition, GAAP return on equity is defined as GAAP net income divided by the average of beginning and ending stockholders’ equity. TRH uses these measures in analyzing its performance as these measures focus on the core fundamentals of TRH’s operations. While TRH considers realized capital gains and losses and the gain on early extinguishment of debt as integral parts of its business and results, such items are not indicative of the core fundamentals of TRH’s operations. TRH believes these measures are of interest to the investment community because they provide additional meaningful methods of evaluating certain aspects of TRH’s operating performance from period to period on bases that are not otherwise apparent under GAAP. These non-GAAP measures, namely, NOI, NOI Per Common Share (diluted) and Operating ROE should not be viewed as substitutes for GAAP net income (loss), GAAP net income (loss) per common share and GAAP return on equity, respectively. Reconciliations of NOI, NOI Per Common Share (diluted) and Operating ROE to GAAP net income, GAAP net income per common share on a diluted basis and GAAP return on equity, respectively, the most directly comparable GAAP measures, are included above.

69831tr_txt 10 3/2/10 9:52 PM

www.transre.com

This summary contains selected financial information from TRH’s Consolidated Financial Statements and accompanying notes that were prepared in accordance with U.S. generally accepted accounting principles (GAAP), unless otherwise indicated. This information should be read in conjunction with such statements and accompanying notes that were included in Forms 10-K for the relevant years.

(1) Assumes a 35% tax rate. (2) Represents a performance measure which is based on a methodology other than GAAP. Non-GAAP measures should not be viewed as a

substitute for the most directly comparable GAAP figure. See discussion on page 10. (3) Share and per common share data have been retroactively adjusted, as appropriate, to reflect common stock splits.

Years Ended December 31, 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000

(in millions, except ratios and per common share amounts)

StatementofOperationsData

Net premiums written $3,986 $ 4,108 $ 3,953 $ 3,633 $ 3,466 $ 3,749 $ 3,341 $ 2,500 $ 1,906 $ 1,659

Net premiums earned 4,039 4,067 3,903 3,604 3,385 3,661 3,171 2,369 1,790 1,632

Net investment income 467 440 470 435 343 307 271 252 240 234

Realized net capital gains (losses) (71) (436) 9 11 40 22 10 (6) - 33

Revenues 4,446 4,083 4,382 4,049 3,768 3,990 3,452 2,616 2,030 1,899

Income (loss) before income taxes 596 3 596 540 (46) 276 387 188 (34) 268

Net income $ 478 $ 102 $ 487 $ 428 $ 38 $ 255 $ 304 $ 169 $ 19 $ 212


Total realized net capital (gains) losses, net of tax(1) 46 283 (6) (7) (26) (15) (7) 4 - (22)

(Gain) on early extinguishment of debt, net of tax(1) (7) (6) - - - - - - - -

Net operating income(2) $ 517 $ 379 $ 481 $ 421 $ 12 $ 240 $ 297 $ 173 $ 19 $ 190

GAAPRatios

Loss 66.3% 71.5% 67.6% 68.3% 85.0% 75.2% 70.4% 75.8% 87.2% 73.4%

Underwriting expense 27.2 27.1 27.6 27.6 27.2 26.1 26.2 26.6 28.1 26.6

Combined 93.5 98.6 95.2 95.9 112.2 101.3 96.6 102.4 115.3 100.0

PerCommonShare(diluted)(3)

Net income $ 7.15 $ 1.53 $ 7.31 $ 6.46 $ 0.57 $ 3.85 $ 4.60 $ 2.57 $ 0.29 $ 3.23




Net operating income(2) $ 7.74 $ 5.68 $ 7.22 $ 6.35 $ 0.18 $ 3.63 $ 4.51 $ 2.63 $ 0.29 $ 2.90

Cash dividends declared $ 0.79 $ 0.73 $ 0.62 $ 0.53 $ 0.46 $ 0.39 $ 0.34 $ 0.32 $ 0.30 $ 0.28

BalanceSheetData(atyear-end)

Investments and cash $12,511 $ 10,518 $ 12,756 $ 11,336 $ 9,242 $ 8,287 $ 6,867 $5,588 $5,004 $ 4,391

Assets 14,944 13,377 15,484 14,268 12,365 10,605 8,708 7,287 6,741 5,523

Unpaid losses and loss adjustment expenses 8,609 8,124 7,926 7,468 7,113 5,941 4,805 4,033 3,748 3,077

Unearned premiums 1,188 1,220 1,227 1,144 1,082 1,057 917 708 554 419

Senior notes 1,033 722 747 747 746 - - - - -

Stockholders’ equity 4,034 3,198 3,349 2,958 2,544 2,587 2,377 2,031 1,846 1,856

Book value per common share(3) $ 60.77 $ 48.19 $ 50.56 $ 44.80 $ 38.60 $ 39.30 $ 36.24 $ 31.03 $ 28.26 $ 28.47

ReturnonEquity

GAAP return on equity 13.2% 3.1% 15.4% 15.6% 1.5% 10.3% 13.8% 8.7% 1.0% 12.1%




Operating return on equity(2) 14.3% 11.6% 15.3% 15.3% 0.5% 9.7% 13.5% 8.9% 1.0% 10.9%

69831tr_txt 11 3/2/10 9:52 PM

Regional Review »

Proactive portfolio optimization.

The year 2009 ended very much as 2008 began, with excess supply and pricing pressure. However, this superficial similarity disguises a fundamental change in how our industry approaches business.

At Transatlantic Re, we have changed the way we analyze and manage our business. No longer do we simply manage it by functional silos – underwriting, actuarial, risk, claims, IT and finance. As the industry has changed, we have found it more effective to work in multidisciplinary teams, as we assume risks from our clients and manage the portfolios we create to optimize our risk-adjusted return.

Management of risk takes place at the individual transaction level – both before we assume a risk and during the client relationship (with initial deal reviews and annual performance reviews incorporating claims experience) – and at the portfolio level (with bi-annual profitability studies and reserving reviews). In each case, we are developing and deploying advanced automation tools, to accelerate workflows (quotation, contract and claims) and generate the management information we need to control our business.

Our staff use these tools to come together frequently to discuss our business. The volume of data is greater today than ever before, so we need our staff’s collective experience and intelligence more than ever to interpret that data and adjust our tactics accordingly. And we need our people to turn emerging risks into actionable recommendations, whether generated by our actuaries, our global product committees, our risk committees or our underwriting teams. We also actively engage our clients and brokers to ensure that all concerned are working from the same set of assumptions and then revising those assumptions as experience dictates. This whole way of doing business cannot be called “portfolio management” – that term is too backward-looking. What we are engaged in is proactive portfolio optimization, accomplished in as close to real-time as we can manage.

All our departments are involved in an ongoing process of challenging assumptions, developing consensus and applying that consensus to benefit our clients.

On the following pages, we describe the progress of our interdisciplinary teams around the world during 2009.


69831tr_txt 12 3/2/10 9:52 PM

United States and Canada

Committed to underwriting discipline.

Looking back on our recent experience, the word that springs to mind is “excitement.” Of

course, excitement has many connotations, both positive and negative – and our team has

experienced the full spectrum of these during this time.

The biggest excitement has been the general unrest in the capital markets and, specifically,

the uncertainty surrounding Transatlantic Re’s stock ownership. For our team, however, this

“excitement” translated into a great deal of work by many people as they communicated

new developments to our clients and brokers, answered their questions and addressed

their concerns.

It has been an honor to witness the almost unbelievable support that our clients and their

brokers have shown us, and we are deeply appreciative of it. We are equally excited about

the opportunities that have opened up for us now that the issues mentioned above have been

resolved. Specifically, we received a number of new submissions following our secondary public

offering. Our commitment to our business and focus on our clients have not changed, despite

all the change going on around us.

From a business perspective, we are pleased to remain a market leader in specialty casualty

lines, trade credit and political risk and catastrophe-exposed business. Current market

conditions are not as robust as they were previously, but we continue to be optimistic about

our prospects – while remaining committed to the underwriting discipline that has served

us so well in the past.

We are monitoring tort reform developments closely, given that we specialize in medical

malpractice. The next few years should see state-by-state developments that may increase

overall uncertainty but will benefit specialists in the field.

We are pleased to see appropriate, positive price developments in financial institution

business and in marine, aviation and select property areas.

www.transre.com

69831tr_txt 13 3/2/10 9:52 PM


In other areas, however, too much business remains fundamentally underpriced. It is only

the abnormally favorable loss cost trends (or reserve releases) from prior years that made

2009 industry results in these areas appear acceptable. We doubt the long-term viability of

those trends and are actively managing our business accordingly. Unfortunately, experience

tells us that our industry does not act until “the pain” is manifest – and that pain is typically

defined as negative cash flow. This unfavorable shift has not yet occurred but may not be

too far over the horizon in certain underpriced classes.

As a reinsurer, we have the benefit of being able to advise our clients and brokers on the

anticipated cost of risk. We operate in a competitive market; but, unlike our clients, we do

not have to contend with rate filings, retail distribution and the other factors that affect their

pricing decisions. In the future, we will continue to advise them when we see inadequate

risk-adjusted returns – and to alert them about rates we cannot support. That policy is a

practical demonstration of the discipline that our business requires.

In closing, I want to spend a moment thanking our team. Throughout this time of corporate

change, they exhibited a calm professionalism that has been in marked contrast to the

excitement raging around them and is a testament to their character. They have helped

us deliver outstanding results for the year just past, and it is an honor to work with such

exceptional people.

We were fortunate that we were not affected by any significant insured catastrophe events

last year. Given everything else that was going on, the calming effect of this absence of

insured catastrophes was welcome. However, we all appreciate that the only certainty going

forward is that we will continue to live in exciting times.

Mike Sapnar

Chief Underwriting OfficerUnited States and Canada

» United States and Canada

69831tr_txt 14 3/2/10 9:52 PM

www.transre.com

Transatlantic Re has been in Brazil for over 10 years.

We continue to diversify our portfolio and reduce its volatility by expanding our non-

catastrophe exposed surety and traditional casualty book of business throughout the

Caribbean, Central and South America.

In 2009, we succeeded in this effort despite the region’s attractiveness to new capacity.

Brazil alone saw 25 new reinsurance companies established in 2009. Transatlantic Re has

been in Brazil for over 10 years now, and growing our business in the Brazilian market

has become a cornerstone of our strategy. In the past year, we have added several new

underwriters to our team there. At the same time, we continue to participate in a number of

the initial projects launched before the main expansion of the Panama Canal, which itself

presents another opportunity for the future.

Our success was also gratifying given the amount of time, travel and effort we devoted during

2009 to communicating with our clients and brokers about company developments and

changes in our stock ownership. This information was well received, and the conversations

we had allowed us to discover new opportunities for doing business with our partners.

We also provided information to key regional clients by sponsoring a well-received traditional

casualty roundtable. Held in Miami, the roundtable welcomed participants from 10 clients.

We look forward to hosting future events of mutual interest around the region.

There was a notable lack of insured catastrophe losses during 2009. However, I cannot end

this note without pausing to offer heartfelt best wishes from myself and all my colleagues to

the people of Haiti, who are suffering so much in 2010.

Javier Vijil

PresidentLatin America and the Caribbean

Latin America and the Caribbean

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International Division

One company, multiple markets.

Before turning to a review of our offices, we should make four general points about

Transatlantic Re’s long-established presence in Europe, Asia and Africa.

First, the relationships we have built with clients and brokers over many years were put to

the test in 2009 – and successfully reaffirmed. We were very appreciative of the terrific

goodwill we received from our business partners, who wanted us to emerge strongly from a

turbulent period and prosper.

Second, we maintained underwriting discipline. Our performance reflects the quality of our

clients, our prudent cycle- and risk-management and the diversity of our portfolio, which

frees us from undue reliance on any one territory or class of business.

Third, a change in buying behaviour, as many cedants expand their panel of reinsurers to

reduce counterparty risk, has opened promising new opportunities for us.

Fourth, our “hub and satellite” structure effectively supports our business. The key to

our organizational success is frequent and close communication: we work as one team

to maintain a consistent underwriting approach around the world, while adapting to

local conditions.

We have found that this “cross-support” structure, which combines the excellence and

innovation associated with larger markets and the opportunities for expansion found in

developing markets, is the most effective way to deliver our expertise to our clients. In

this effort, we are greatly assisted by TIRS, the reinsurance operating system developed

in-house.

We continue to develop our “no-boundary” approach by creating global product teams to

discuss developments and make recommendations for all our teams worldwide. We work in

different markets, but always as one company.

We also continue to build our international operations team, which includes a new Chief

Administrative Officer based in London.


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Our relationships with clients continue

to grow stronger.

London

Transatlantic Re is one of the largest and longest-established reinsurance specialists

operating in the London market and writing the full spectrum of property and casualty

business.

This broad-based experience allows us to support our local and international clients – and

to offer assistance and guidance to our satellite offices. Moreover, our underwriters benefit

from continuous excellent support from our actuarial and claims teams. We strongly believe

that it is not only the length of our presence in London, but also the consistency and clarity

of our approach to the market, that has stood us in such good stead.

Vibrant trading relationships are built on respect for the client, flexibility and maintenance of

underwriting discipline. Our relationships with clients and brokers have grown stronger over

the past year, as we have communicated with them at length regarding the changes taking

place in our company. In turn, the deeper understanding we have gained of our clients’

requirements and long-term plans enables us to allocate resources, effort and capital where

they can be best utilized.

In 2009, the primary markets struggled to address rate inadequacy (other than for distressed

classes) caused by the economic and competitive headwinds they faced. In response, we

took corrective action on marginal business, making adjustments where appropriate. In

addition, we were presented with opportunities to write new business, both in the United

Kingdom and in the satellite offices we support.

We continued to add to our London teams, with new hires in accident and health, facultative

property and financial lines who have quickly enhanced our skill base and client service in

these technical classes.

www.transre.com

Europe, The Middle East and Africa

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Paris

With nearly 50 nations, including 27 in the European Union, there is no single “Continental

Europe” market: each country has its local insurance market, with its own degree of

development and its own tradition and level of competition.

Our Paris office concentrates on France and Northern Europe, while developing portfolios in

Eastern Europe, including the former Soviet countries. This effort involves experts who speak

the local language and travel extensively for face-to-face discussions. At the same time, our

coordinated strategy ensures a consistent approach founded on strong risk management

principles.

In France, we have changed our portfolio mix, reflecting some of the work we have done

in developing our economic capital model. Working closely with clients and brokers, we

have been able to make appropriate adjustments, while maintaining cordial relations with

all parties – thanks to our longstanding position in the market and the soundness of our

analytical work.

With support from Paris, our Munich team has established a strong local presence and a new

market alternative for our German and Austrian prospects and clients. Here, as elsewhere, our

strong local talent and our hub specialists work together seamlessly to develop our business.

Zurich

The Swiss reinsurance market is highly competitive, with more than 30 professional reinsurers

represented. Despite the competitiveness, we remain well positioned to take advantage of

changes in clients’ purchasing demands and have succeeded in turning new opportunities

into business gains.

In addition to the Zurich team’s focus on Switzerland, Southern Europe and the Netherlands,

the team continues to leverage its expertise in accident and health risks, particularly medical

expenses, in the growing markets of the Middle East. The team also oversees our investment

in Kuwait Re, a company whose efforts complement our own in the region.

» Europe, The Middle East and Africa


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www.transre.com

Asia Pacific

Expanding relationships in a vibrant region.

Transatlantic Re made some meaningful strides in 2009, as we expanded our business shares with major clients in Japan, Korea and Australia.

Asian markets continue to attract interest and capacity from reinsurers, as befits a region marked by strong economic development and great potential. During the year, we worked extremely hard with our clients and brokers to reach mutually attractive agreements. Unfortunately, hard work does not always translate into new business. However, since new business does not always contribute to enhanced earnings, we still think we made the right business decisions, in view of our strong commitment to underwriting discipline.

In the past year, we have expanded our engineering and casualty lines (including personal accident) to complement our property exposures, while cutting back our motor portfolios. We also extended our facultative offering to the region, bringing us closer to clients and paving the way for future treaty development.

To emphasize our expertise in casualty lines, Transatlantic Re sponsored a casualty seminar in China which was very well received. We will continue to stress education initiatives in the Asia-Pacific region.

Conclusion

One of the world’s strongest global

reinsurance franchises.

Our international division covers a significant part of the globe. It is my privilege to lead a

team that is seizing the opportunities such a vast territory offers – and helping to build one

of the world’s strongest global reinsurance franchises. In my travels, I meet many clients

and brokers, and I wish here to pass on the compliments and praise they offer our well-

deserving team. Thank you all.

Paul Bonny

PresidentInternational

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Board of Directors » Transatlantic Holdings, Inc.

Board of Directors

RichardS.Press(Chairman) RetiredSVP,WellingtonManagementCompanyLLP

IanH.Chippendale RetiredChairman,RBSInsuranceGroup,Ltd.

JohnG.Foos RetiredChiefFinancialOfficer,IndependentBlueCross

JohnL.McCarthy President,RiskManagementFoundationoftheHarvard MedicalInstitutions,Inc.

RobertF.Orlich PresidentandCEOofTransatlanticHoldings,Inc.

ThomasR.Tizzio RetiredSeniorViceChairmanandHonoraryDirector AmericanInternationalGroup,Inc.

Officers

RobertF.Orlich PresidentandChiefExecutiveOfficer

KennethApfel EVPandChiefActuary

PaulA.Bonny EVPandPresident,InternationalOperations

MichaelC.Sapnar EVPandChiefUnderwritingOfficer,U.S.&Canada

StevenS.Skalicky EVPandChiefFinancialOfficer

JavierE.Vijil EVPandPresident,LatinAmerica&Caribbean

ThomasV.Cholnoky SVPInvestorRelations

GaryA.Schwartz SVPandGeneralCounsel

AmyM.Cinquegrana CorporateSecretary

(AllofficersofTransatlanticHoldings,Inc.holdthesamepositioninTransatlanticReinsuranceCompany®)

Our executive officers have served for many years with

impressive continuity. In addition, we are fortunate to have a

distinguished group of outside business leaders on our Board of

Directors offering their unique perspectives on our company.


69831tr_txt 20 3/2/10 9:52 PM

www.transre.com

Officers » Transatlantic Reinsurance Company®

RobertM.BaldreyKennethW.BrandtJohnI.ChoGeorgeJ.DiMartinoEugeneL.FisherAndrewGaudencioSuzanneB.HolohanSeymourH.Katz

BethA.LeveneBertrandLévyRichardLofflerCameronMacDonaldPaulF.McKeonWilliamMcLaughlinGeoffreyPeachGeorgePhillips

DavidRadfordRobertSnowSuzanneA.SpantidosJulianH.SpenceLeeJ.TaylorNicholasTzaneteasA.LorneZalkowitz

GeorgeC.BaroneBruceBaumgartenRonaldH.BayMichaelBohlerStephaneBrissonDavidE.BurkeTimothyButtsDonnaByronJenniferCarellaR.PaulCarrollKevinChiellaLeonardChungPeterClementsCarlCooperCarolCorreiaBenjaminDavilaGeorgeDelaneyPaulC.DempseyRafaelDerettJorgeExpositoGabrielE.FábregaBrianFinlayNancyGatesDennisF.GreaneyJosephGullo

RichardHendersonPeterHoRaymondHoEricA.HoppeDavidHowkinsCraigW.HupperNeilInskipPeterJaisleBrendaJ.JansenLauraA.W.JensenRobertJohnstonJ.OwenKanzEdwardJ.KelleyMichaelL.LauferDominiqueLemonnierGeraldT.LohanThomasLoverdeCraigLygaShawnLynchSimonLyonEnriqueMadroneroMatthewD.MahoneyStevenMannionEdwardMattieGeorgeT.McCrae

CatherineMcDermottLindaMcGlynnJamesMooreWilliamMorrisLisaMoserDouglasMurrayWilliamG.NaftelYutakaNakamaeTimothyO’ConnorRussellOeserKarlJ.O’TooleMartinPaganoAnthonyM.PandolfoNigelParkerPauloCesarPereiraReisSocratesPichardoDesmondPollockJamesReadyKyleRhodesJuanCarlosRoaLeonardR.RosaLouiseRoseRobertS.RosenRobertG.RudolphSandraRushbrook

AnneMarieRyanAnneSaillardDavidScottEdwardSheehanDavidSinclairLarrySpoolstraGarethStanleyDavidT.StewartRichardStrumphJohnSullivanMeganC.Sullivan-McIntyreAndrewTaylorEvaTaylorDarleneTomVictorM.TorresMaryVitaleRobertA.WagnerJamesD.WhitelawGnanaWignarajahMaxineWildeWilfredWittRuthZea

Trans Re Zurich

AlainD.Manfré General Manager & CEOA.LorneZalkowitz Deputy CEOJuan-CarlosGlogg CFO

Professional Risk Management Services, Inc.

MartinG.Tracy President & CEOJosephDetorie EVP & CFO

Vice Presidents

Senior Vice Presidents

69831tr_txt 21 3/2/10 9:52 PM

Our Offices »

Transatlantic Reinsurance Company®

80PineStreetNewYork,NY10005(212)3652200»[email protected]

Transatlantic Holdings, Inc.80PineStreetNewYork,NY10005(212)3652200»[email protected]

Trans Re ZurichNüschelerstrasse32POBox14758021Zurich,Switzerland(41)442276100»[email protected]

Professional Risk Management Services, Inc.1515WilsonBoulevardSuite800Arlington,VA22209(800)2453333»[email protected]

Buenos AiresTransatlanticRe(Argentina),S.A.CarlosPelligrini10235thFloorC1009ABUBuenosAiresArgentina(5411)[email protected]

Chicago 300SouthRiversidePlaza22ndFloorChicago,IL60606(312)[email protected]

Columbus1515WestLaneAvenueSuite18Columbus,OH43221(614)[email protected]

Hong Kong(Asia-PacificRegionalHeadquarters)3303TheLeeGardens33HysanAvenueCausewayBayHongKongS.A.R.People’sRepublicofChina(852)[email protected]

JohannesburgMSUpson&Associatesc.c.KildrummyOfficeParkBlock7CnrWitkoppenRoad&UmhlangaCrescentPaulshof,SouthAfrica(27)[email protected]

LondonCornExchange55MarkLaneLondon,EnglandEC3R7NE(44)[email protected]

Miami (LatinAmerica/Caribbean)701N.W.62ndAvenueSuite790Miami,FL33126(786)[email protected]

MunichTransReGermanyGmbHPromenadeplatz880333MunichGermany(49)[email protected]

Overland Park6900CollegeBoulevardSuite860OverlandPark,KS66211(913)[email protected]

Panama CityTRC(PANAMÁ)S.A.Calle50EdificioTorreGlobalSuite1809PanamaCity,RepublicofPanama(507)[email protected]

Paris21BoulevardHaussmannParis75009France(33)[email protected]

Rio de JaneiroTransatlanticReinsuranceCompany–RepresentativeOfficeRuadaCandelaria65Sala2101RiodeJaneiro,Brazil20091-020(55)[email protected]

San FranciscoEmbarcaderoCenterWest275BatteryStreetSuite460SanFrancisco,CA94111(415)[email protected]

ShanghaiRm1511RuijinBuildingNo.205MaomingRoad(S)Shanghai200020People’sRepublicofChina(86)2164737681/[email protected]

Stamford1177SummerStreetSuite400BStamford,CT06905(203)[email protected]

StockholmNOBAREDanavägen5BSE-18260DjursholmSweden(46)[email protected]

SydneyLevel21,AustraliaSquare264GeorgeStreetSydneyNSW2000Australia(61)[email protected]

TokyoNewYurakuchoBuilding,3rdFloor12-1,Yurakucho1-chomeChiyoda-Ku,Tokyo100-0006Japan(81)[email protected]

Toronto145WellingtonStreetWestToronto,OntarioM5J1H8Canada(416)[email protected]

WarsawTransatlanticPolskaSp.zo.o.15JanaPawlaIIStreet9thfloor00-828Warsaw,Poland(48)[email protected]

22 Transatlantic Re » 2009 Operating Review

69831tr_txt 22 3/2/10 9:52 PM

Our 2009 Annual Report on Form 10-K and the proxy statement for our 2010 Annual Meeting (to be held in New York on May 20, 2010) are available on the Investor Information section of our website, www.transre.com. This Operating Review and our Annual Report are also available on the enclosed CD-ROM.

Adopting the Notice & Access rules approach allows us to reduce the number of printed copies of our traditional Annual Report significantly, reducing the associated environmental impact.

We would be delighted to hear from you with any comments or questions you may have regarding the content at [email protected].

02 FinancialHighlights

03 LettertoStockholders

09 Finance

10 Ten-YearSummary

12 RegionalReview

13 UnitedStatesandCanada

15 LatinAmericaandtheCaribbean

16 International

20 BoardofDirectors

21 Officers

22 OurOffices

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Transatlantic Re®

2009OperatingReviewtransre.com

69831tr_cvr 1 3/2/10 9:09 PM

02 financial highlights 15 latin america and the caribbean€¦ · see page 10 for a discussion of...

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