Throughout the first quarter of 2012 we continued to build capital, further strengthening our balance sheet with a preferred stock issuance in April, and we remain very confident in our financial flexibility. There are numerous signs that the market is firming, and we are well positioned to deploy our capital to profitable underwriting or share repurchases. We are also pleased that the Board approved a 13% increase in the quarterly common dividend to $0.17.”
Net income for the first quarter included $16.9 million, or $0.23 per diluted share, of catastrophe losses after tax resulting from the severe US storms in February and March. It also included $27.0 million or $0.37 per diluted share related to the losses from the Costa Concordia event. These losses were net of reinsurance recoveries, reinstatement premiums and taxes.
Net earned premiums were $495.4 million in the first quarter of 2012, up 9.5% compared with the first quarter of 2011.
Prior year net reserve releases were $37.0 million in the first quarter of 2012 compared with $21.9 million of net reserve releases in the first quarter of 2011. Net investment income was $52.4 million in the quarter compared with $55.5 million in the first quarter 2011.
Operating highlights for Reinsurance for the quarter ended March 31, 2012 include:
- Gross written premiums of $474.2 million, up 8.5% compared with $437.1 million for the first quarter of 2011
- Net earned premiums of $271.0 million, relatively unchanged from the first quarter of 2011
- Combined ratio of 79.8% compared with 178.2% for the first quarter of 2011
Gross written premiums increased in the other property lines, principally pro rata, and in our specialty lines, while the property catastrophe and casualty lines were relatively flat.