UPDATE 2-PartnerRe Q3 operating profit beats estimates

* Q3 oper EPS $4.77 vs est $3.20

* Net premiums earned $1.09 bln

* Net investment income $145.4 mln (Recasts; adds analyst's comments, company's comments, details and background)

By Abhinav Sharma

BANGALORE, Oct 26 (Reuters) - Reinsurer PartnerRe Ltd (PRE.N) posted higher quarterly operating earnings, beating market expectations, driven primarily by lower catastrophe losses.

The company said its non-life segment was stable to gradually deteriorating.

There will be some top line pressure as prices will go down in 2010, said analyst Clifford Gallant of Keefe Bruyette & Woods, adding, "but they'll do relatively well in 2010 even with the pressure."

Gallant said PartnerRe's acquisition of Paris Re Holdings Ltd PRI.PA augments its franchise and strengthens its balance sheet.

The company, which said it would buy rival Paris Re in a $2 billion deal in July, agreed to purchase an additional 4.5 million Paris Re shares to bring its total ownership to about 87 percent.

PartnerRe said it would include Paris Re's results with its fourth-quarter results.

Third-quarter combined ratio fell to 78.1 percent from 95.5 percent last year, which included 20 points related to the impact by Hurricanes Ike and Gustav, the company said.

PartnerRe posted third-quarter net income of $566.7 million, or $9.44 a share.

Operating earnings -- the measure most commonly used by insurance analysts -- rose to $282.1 million, or $4.77 a share, compared with $121.3 million, or $2.27 a share, last year.

Analysts on average expected the company to earn $3.20 a share, according to Thomson Reuters I/B/E/S.

Losses and loss expenses fell 24 percent to $574.2 million.

Net premiums earned rose slightly to $1.09 billion.

Reinsurers assume risks from other insurers, thereby spreading the risk of losses among several carriers.

Shares of PartnerRe closed at $78.18 Monday on the New York Stock Exchange. (Reporting by Abhinav Sharma in Bangalore; Editing by Anne Pallivathuckal)