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Montpelier Re Reports Third Quarter Financial Results

Stock quotes in this article: MRH 

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 third quarter ended September 30, 2012.

Fully converted tangible book value per common share was $26.61, an increase of 5.3% for the quarter and 18.6% year-to-date, including common share dividends declared during the periods.

Operating income for the quarter was $0.85 per common share ($49 million) and net income was $1.25 per common share ($72 million), each expressed after preferred share dividends. The net impact of realized and unrealized gains from investments and foreign exchange, which is included in net income, was $23 million for the quarter.

Net premiums written decreased by 17% in the quarter, but were down 6% when adjusting for reinstatement premiums ($2 million) and the sale of MUSIC ($11 million). Net premiums earned decreased by 2% in the quarter, but were up 5% when adjusting for reinstatement premiums ($2 million) and the sale of MUSIC ($7 million).

The loss ratio for the quarter was 37%, which includes a $16 million loss estimate for a number of smaller catastrophe events in the quarter, including crop losses resulting from the severe drought in the United States, offset by $16 million of favorable prior year loss reserve movements. The combined ratio was 73% for the quarter.

Net investment income was $16 million, and the total return on the investment portfolio was $47 million or 1.6% for the quarter.

Christopher Harris, President and Chief Executive Officer, said, “I am pleased with our year-to-date operating performance. We have generated 18.6% growth in fully converted book value per share, and both our Bermuda and Lloyd’s underwriting platforms have delivered strong profitability. Our successful $300 million senior debt refinancing earlier this month further increases our capital flexibility and positions us well as we head into the 2013 renewal season.”

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