Montpelier Re Holdings Ltd. (NYSE: MRH), (“Montpelier“ or the “Company“), a leading provider of short-tail reinsurance and other specialty lines, today reported its financial results for the fourth quarter and year ended December 31, 2013.
Fully converted book value per common share was $29.42, an increase of 5.3% for the fourth quarter and an increase of 14.3% for the full year, each computed after taking into account common share dividends declared.
Operating income for the quarter was $90 million, or $1.78 per common share, representing a quarterly return on common equity of 6.2%. Net income was $73 million, or $1.44 per common share. Net income for the quarter includes $2 million of realized and unrealized investment gains, $11 million of net foreign exchange losses and an $8 million one-time expense relating to the initial public offering of the Company’s newly-formed collateralized property reinsurance affiliate, Blue Capital Reinsurance Holdings Ltd. (NYSE:BCRH).
Net premiums written and earned in the quarter were largely consistent with those of a year ago, when adjusting for reinstatement premiums recorded from windstorm Sandy in the fourth quarter of 2012. The loss ratio for the quarter was 2%, which includes $42 million of favorable prior year loss reserve movements. The combined ratio was 39% for the quarter.Net investment income was $14 million and the total return on the investment portfolio was 0.50% for the quarter. Christopher Harris, President and Chief Executive Officer, said, “The fourth quarter marked a strong end to a successful year for Montpelier. Solid underwriting execution across each of our operating segments combined to deliver strong profitability, with an 18.8% operating ROE for the year. Additionally, the initial public offering of Blue Capital Reinsurance Holdings Ltd. last November further strengthened our collateralized reinsurance presence.” Mr. Harris continued, “Despite competitive market conditions during the January renewals, we continued to succeed in achieving preferred signings and in expanding our product mix. With our strong balance sheet and specialist underwriting approach, we believe we are positioned to perform well across market cycles.”