Montpelier Re Reports Fourth Quarter And Full Year Financial Results

Montpelier Re Holdings Ltd. (NYSE: MRH), (“Montpelier” or the “Company”), a leading provider of short-tail reinsurance and other specialty lines, today reported financial results for the fourth quarter and the year ended December 31, 2011.

Fully converted book value per common share was $22.71, an increase of 2.5% for the fourth quarter and a decrease of 6.1% for the full year, after taking into account common share dividends declared during the periods.

The operating loss for the quarter was $0.27 per common share ($16 million) and net income was $0.40 per common share ($25 million), each expressed after preferred share dividends. The net income for the quarter includes $30 million of net realized and unrealized gains from investments and foreign exchange and an $11 million net gain from the sale of Montpelier U.S. Insurance Company (“MUSIC”). The operating loss for the full year was $2.50 per common share ($154 million) and the net loss was $2.01 per common share ($124 million). The net loss for the year includes $19 million of net realized and unrealized gains from investments and foreign exchange and the aforementioned gain from the sale of MUSIC.

The loss ratio for the quarter was 81% which includes the net financial impact of $66 million of catastrophe losses, including $40 million from the Thailand floods and $26 million from other catastrophe events occurring during 2011, including those occurring in the fourth quarter. These losses were partially offset by $18 million of favorable prior year loss reserve development. The combined ratio was 117% for the quarter. The loss ratio for the year was 98% and the combined ratio was 131%.

Net investment income was $17 million for the fourth quarter and $69 million for the full year. The total return on the investment portfolio was 1.6% for the quarter and 3.0% for the full year.