Montpelier Re Reports Q2 Financial Results
Bermuda-based Montpelier Re Holdings Ltd. reported its financial results for the second quarter ended June 30, 2012.
Fully converted tangible book value per common share was $25.36, an increase of 4.8% for the quarter and 12.6% year-to-date, after taking into account common share dividends declared during such periods.
Gross premiums written increased by 17% in the quarter, but were up 28% when adjusting for reinstatement premiums ($3 million) and the sale of MUSIC ($15 million). This increase reflects improved pricing conditions and additional capital deployment in property catastrophe lines.
Net premiums written were up 8% in the quarter, but were up 19% when adjusting for reinstatement premiums ($3 million) and the sale of MUSIC ($13 million).
The loss ratio for the quarter was 39%, which includes $17 million of net favorable prior-year loss reserve movements. The combined ratio was 76% for the quarter.
Operating income for the quarter was $0.74 per common share ($44 million) and net income available to common shareholders was $1.06 per common share ($62 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 $18 million for the quarter.
Net investment income was $17 million, and the total return on the investment portfolio was 1.1% for the quarter.
Christopher Harris, President and Chief Executive Officer, said, “I am pleased with our first half underwriting and investment results, which have yielded 12.6% growth in our fully converted book value per share.
“In response to improved market conditions, we have increased our exposure in property catastrophe lines, positioning us well for the remainder of the year and into 2013.”
During the second quarter the Company repurchased 2,399,601 common shares at an average price of $20.14 per share ($48 million). Thus far in the third quarter (through July 25, 2012), the Company has repurchased a further 582,735 common shares at an average price of $21.28 per share ($12 million).
As of June 30, 2012, shareholders’ equity was $1.62 billion and total capital was $1.95 billion. The Company also noted that during the quarter A.M. Best upgraded the financial strength rating of Montpelier Reinsurance Ltd., its largest operating subsidiary, to “A” (Excellent).
