UPDATE 1-Reinsurer PartnerRe 2nd-qtr oper net jumps 35 pct

(Adds financial detail, Reuters Estimates)

NEW YORK, July 28 (Reuters) - Bermuda-based reinsurer PartnerRe Ltd (PRE.N) said Monday that operating profit rose 35 percent in the second quarter, boosted by higher net policy sales and stronger investment returns.

Operating earnings, the measure most commonly used by insurance analysts, increased to $183.8 million, or $3.39 a share, from $136 million, or $2.34 a share, in the year-ago period.

On that basis, analysts, on average, expected PartnerRe to earn about $2.59 a share, according to Reuters Estimates.

Net written premiums rose 6.4 percent to $956.3 million, and investment income was 11 percent higher at $145.5 million.

Chief Executive Patrick Thiele, in a statement, said while property-casualty reinsurance rates were declining, most clients renewed contracts at rates acceptable to the company.

When policy rates soften, reinsurers have to be careful not to sell coverage at rates that could later be undercut by claims.

Reinsurers provide backup coverage to other insurers, thereby spreading the risk of losses among more than one carrier.

PartnerRe posted a net loss of $26 million, largely due to an accounting change that requires both realized and unrealized investment gains to be recorded on the bottom line.

Insurers and reinsurers who do not adopt this standard, which is voluntary, only record unrealized gains or losses in comprehensive income, which does not affect net results.

PartnerRe is one of the first in the industry to adopt the new financial accounting standard, known as FAS 159. (Reporting by Lilla Zuill; editing by Jeffrey Benkoe)