Montpelier Re Reports Q3 Net Loss of $78.2 Million

Bermuda-based Montpelier Re Holdings Ltd. has reported a net loss of $78.2 million, or a $1.26 loss per share, for the three months ended September 30, 2004. For the nine months ended September 30, 2004 the company reported net income of $137.9 million, or $2.03 diluted earnings per share.

“Net unrealized gains on investments were $18.4 million for the quarter and a loss of $3.0 million for the year to date,” said the announcement. “The comprehensive loss for the quarter was $59.8 million or $0.96 comprehensive loss per share, while for the nine months ended September 30, 2004, the comprehensive earnings were $134.9 million or $1.98 diluted comprehensive earnings per share.”

It also noted: “Book value per share at September 30, 2004, on a fully converted basis (1), was $25.58, which incorporates the accrual of a $0.34 dividend per share for the quarter. Total return to shareholders (2), incorporating both the change in fully converted book value per share and dividends accrued, was a negative return of 3.3% for the third quarter of 2004 and a positive return of 6.8% for the year to date. Total return to shareholders for the twelve months ended September 30, 2004 was 13.9%. In the third quarter, the Company released $22.7 million of net reserves from prior accident years.”

President and CEO Anthony Taylor commented: “Montpelier was tested by an unusually intense wind season this year and came through it with greater confidence than ever that our business plan is a sound one. With our disciplined focus on multi-line property reinsurance, we expect to produce strong returns in the majority of quarters which don’t contain major loss events, and to suffer a manageable negative return in the infrequent quarters which see significant claim activity. We anticipate that this approach is likely to produce superior returns for our shareholders over the cycle.”

He also noted: “Overall property renewal rates in January are expected to be higher than seen in 2004 as a consequence of the four large hurricanes. The largest increases are expected in property catastrophe programs in Florida and the Southeast but modest increases could be experienced over the wider property market in the U.S.. Internationally, property rates are expected to stabilize. As is our stated aim, we will continue to underwrite for the bottom line, not the top line.”

CFO Kip Oberting observed: “The expected financial impact of the recent storms remains within the range of $185 million to $235 million previously announced. The third quarter of 2004 saw our capital reduced by $100.8 million. This includes our quarterly dividend of $23.5 million and a share repurchase of $21.9 million. Despite the catastrophes and the return of capital to owners we have more capital now than we did at the start of the year. We have $84.5 million remaining in our original $150.0 million share repurchase authorization and will continue to manage capital to meet the underwriting opportunities available.”

Full details of the company’s financial results may be obtained in its Web site at: www.montpelierre.bm.