HAMILTON, Bermuda--(BUSINESS WIRE)--
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 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
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).
Please refer to Montpelier’s June 30, 2012 Financial Supplement for more
detailed financial information, which is posted on the Company’s website
Montpelier, through its operating subsidiaries, is a premier provider of
global property and casualty reinsurance and insurance products.
Additional information can be found in Montpelier's public filings with
the Securities and Exchange Commission.
Earnings Conference Call:
The Company will conduct a conference call, including a question and
answer session, on Friday, July 27, 2012 at 8:00 a.m. Eastern Time.
The presentation will be available via a live audio webcast accessible
on the Company's website at www.montpelierre.bm
or by dialing 1-877-317-6789 (US toll free), 1-412-317-6789
(international) or 1-866-605-3852 (Canada toll free). A telephone replay
of the conference call will be available through August 27, 2012 by
dialing 1-877-344-7529 (toll-free) or 1-412-317-0088 (international) and
entering the passcode 10014950.
Application of the Safe Harbor of the Private Securities Litigation
Reform Act of 1995
This press release contains forward-looking statements within the
meaning of the United States federal securities laws, pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act
of 1995, that are not historical facts, including statements about our
beliefs and expectations. These statements are based upon current plans,
estimates and projections. Forward-looking statements rely on a number
of assumptions concerning future events and are subject to a number of
uncertainties and various risk factors, many of which are outside the
Company's control. See “Risk Factors” contained in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2011, as
filed with the Securities and Exchange Commission, for specific
important factors that could cause actual results to differ materially
from those contained in forward- looking statements. In particular,
statements using words such as “may,” “should,” “estimate,” “expect,”
“anticipate,” “intend,” “believe,” “predict,” “potential,” or words of
similar meaning generally involve forward-looking statements.
Important events and uncertainties that could cause our actual results,
future dividends on, or repurchases of, our common shares or preferred
shares to differ include, but are not necessarily limited to: market
conditions affecting the prices of our common shares or preferred
shares; the possibility of severe or unanticipated losses from natural
or man-made catastrophes, including those that may result from changes
in climate conditions, including, but not limited to, global
temperatures and expected sea levels; the effectiveness of our loss
limitation methods; our dependence on principal employees; our ability
to execute the business plans of the Company and its subsidiaries
effectively; the cyclical nature of the insurance and reinsurance
business; the levels of new and renewal business achieved; opportunities
to increase writings in our core property and specialty insurance and
reinsurance lines of business and in specific areas of the casualty
reinsurance market and our ability to capitalize on those opportunities;
the sensitivity of our business to financial strength ratings
established by independent rating agencies; the inherent uncertainty of
our risk management process, which is subject to, among other things,
industry loss estimates and estimates generated by modeling techniques;
the accuracy of written premium estimates reported by cedants and
brokers on pro-rata contracts and certain excess-of-loss contracts where
a deposit or minimum premium is not specified in the contract; the
inherent uncertainties of establishing reserves for loss and loss
adjustment expenses, unanticipated adjustments to premium estimates;
changes in the availability, cost or quality of reinsurance or
retrocessional coverage; changes in general economic and financial
market conditions; changes in and the impact of governmental legislation
or regulation, including changes in tax laws in the jurisdictions where
we conduct business; the amount and timing of reinsurance recoverables
and reimbursements we actually receive from our reinsurers; the overall
level of competition, and the related demand and supply dynamics in our
markets relating to growing capital levels in our industry; declining
demand due to increased retentions by cedants and other factors; the
impact of terrorist activities on the economy; rating agency policies
and practices; unexpected developments concerning the small number of
insurance and reinsurance brokers upon whom we rely for a large portion
of revenues; our dependence as a holding company upon dividends or
distributions from our operating subsidiaries; and the impact of foreign
We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the
dates on which they are made.
Change in fully converted tangible book
value per common share: 4
Montpelier Re Holdings Ltd.Investors:William Pollett,
441-299-7576SVP, Chief Corporate Development and Strategy Officer
and TreasurerorMedia:Jeannine Menzies, 441-299-7570Corporate
Source: Montpelier Re Holdings Ltd.