Bermuda-based Montpelier Re Holdings Ltd. reported “comprehensive income” for the first quarter ended March 31, 2006 of $48.5 million, or $0.54 per share, compared with $36.0 million, or $0.54 per share, for the same quarter last year.
Operating income, which excludes net realized and unrealized gains and losses, for the first quarter was $46.1 million, or $0.51 per share, compared with $65.5 million, or $0.97 per share, for the same quarter of last year. Net income, including a $6.3 million capital loss, was $39.8 million, an 87 percent decrease from the $ 74.5 million in Q1 2005. Return on equity during the period was 4.5 percent.
Montpelier Re has been restructuring its operations in the wake of last fall’s hurricanes, and has decreased gross premiums written from $306.3 million in Q1 2005 to $224.9 million in Q1 2006.
Anthony Taylor, Chairman and CEO, commented: “This was a satisfactory transitional quarter in a number of important respects. Firstly, our net income and combined ratio returned to acceptable levels. Secondly, our net loss reserve position on the 2005 storms was stable. Thirdly, we successfully launched Blue Ocean Re, the vehicle through which we now participate alongside third party capital in property retrocessional business.”
He noted that “gross written premiums were down in comparison to the first quarter of 2005, and indicated that “there are both continuing and one-off factors driving this reduction. These include our decision to decrease gross aggregate exposures in peak zones, the end of a three year contract with Aspen Insurance, and our tactical decision to non-renew certain lines at January 1st such as standard offshore marine business. In addition, we turned down a significant amount of renewal and new business early in the quarter which did not meet our return targets. The good news is that pricing in U.S. property business has increased significantly of late and we are well positioned to participate in the forthcoming renewals.”
Taylor added: “Our additional reinsurance purchases at the end of 2005 resulted in a significant impact on ceded earned premiums in the first quarter. We expect this expense to reduce in subsequent quarters.
“Finally, on the capital front, we issued $100 million of trust preferred stock at the beginning of 2006. All in all, I am happy with our capital position and our capacity to take advantage of increasingly favorable conditions in our core business. We will continue to be opportunistic.”
The complete financial statement is available on the Company’s Website at: http://www.montpelierre.bm.
Montpelier Re will conduct a conference call, including a question and answer period, on Friday, April 28th, 2006 at 10:00 a.m. Eastern Time. The presentation will be available via a live audio webcast accessible on the Earnings Call page of the Investor Information section of the Company’s website. A telephone replay of the conference call will be available through May 5th, 2006 by dialing 888-286-8010 (toll-free) or 617-801-6888 (international) and entering the pass code: 56182101.
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