Montpelier: 2011 A ‘Challenging Year’
Bermuda-based Montpelier Re Holdings Ltd., a leading provider of short-tail reinsurance and other specialty lines, yesterday [Jan. 25] announced that it currently expects its December 31, 2011 fully converted book value per share will be between $22.60 and $22.70, an increase of approximately two percent over the third quarter of 2011 after taking into account common share dividends declared during the quarter.
The company noted that its estimated quarterly increase in book value includes approximately $30 million in net realised and unrealised investment and foreign exchange gains, an $11 gain from the sale of Montpelier US Insurance Company [MUSIC] and the effects of $20 million of common share repurchases.
As a result of the MUSIC sale, the company notes that its expected increase in its fully converted tangible book value per share will be approximately three percent for the quarter.
The company further announced that it currently estimates a fourth quarter net operating loss of between $0.25 and $0.35 per common share.
The net operating loss estimate includes the following:
- The net financial impact of the severe flooding in Thailand of approximately $40 million;
- The net financial impact of other catastrophe events occurring during 2011 of approximately $26 million, including those occurring in the fourth quarter; and,
- Approximately $18 million of net favorable prior year loss reserve development.
Christopher Harris, president and Chief Executive Officer, said, “While 2011 was a challenging year for the property catastrophe reinsurance industry, we made important strategic progress by sharpening our underwriting focus, enhancing our capital flexibility, and improving our competitive positioning.
“We enter 2012 well-positioned to benefit from an improved rating environment for short-tail lines.”
These current loss estimates are net of retrocessional recoveries and reinstatement premiums. The company reiterates that, in view of the uncertainties associated with preliminary estimates, its actual losses may differ, perhaps significantly, from these amounts.
Incorporated on the island in 2001, Montpelier Re Holdings Ltd., through its subsidiaries in Bermuda, the United States, the United Kingdom and Switzerland, provides insurance and reinsurance solutions to the global market.
The company is based out of Montpelier House on Pitts Bay Road.
