Transatlantic Holdings, Inc. (NYSE: TRH) today reported a net loss of ($57) million, or ($0.98) per common share (diluted), for the fourth quarter of 2011 compared to net income of $142 million, or $2.22 per common share (diluted), for the fourth quarter of 2010. Net operating loss for the fourth quarter of 2011 was ($71) million, or ($1.21) per common share (diluted), compared to net operating income of $133 million, or $2.09 per common share (diluted), in the fourth quarter of 2010.
Fourth quarter 2011 net loss and net operating loss include after-tax net catastrophe costs (net of reinsurance and net reinstatement premiums) of $110 million, which is net of tax benefits of $59 million. Such after-tax costs, as previously disclosed, consist principally of $72 million related to floods in Thailand and $33 million related to the February 2011 New Zealand earthquake. Fourth quarter 2010 net income and net operating income included after-tax net catastrophe costs of $7 million, which is net of related tax benefits of $16 million.
In addition, fourth quarter 2011 net loss and net operating loss include pre-tax merger-related costs of $75 million, which are included in “other expenses, net.” Of that amount, $67 million relates to a fee paid by TRH to Allied World Assurance Company Holdings, AG (NYSE: AWH) (“Allied World”), which represents the final amount due Allied World under the September 15, 2011 merger termination agreement. As most of these costs are not deductible, a minimal tax benefit of $4 million was recorded in the quarter for merger-related costs.
Michael C. Sapnar, President and Chief Executive Officer, commented, “Despite the impact of one of the worst years on record for insured catastrophe costs globally and significant costs associated with our merger-related activities, our book value per share grew 3.4% in 2011, as we benefited from the performance of our non-catastrophe book as well as $261 million of share repurchase activity during the year.