Selected earnings highlights from Luxembourg-based Flagstone Re for the first quarter of 2012 are as follows:
Q1 2012 Q1 2011
Gross premiums written ———— $170.2 mn $352.7 mn
Net premiums written ————— $ 85.329 mn $233.925 mn
Net premiums earned ———– $113.745 mn $201.053 mn
Net income (loss) ——————- $39.20 mn ($161.2 mn)
Operating income (loss) ———— $7.6 mn ($148.7 mn)
Net investment gain/loss* ———– $18.1 mn $10.8 mn
Net investment income —————- $5.1 mn $9.2 mn
*realized and unrealized
Q1 combined ratio – 97.5 percent (177.6 percent in Q1 2011)
As the above figures indicate Flagstone Re has followed its decision, announced at the end of October, to restructure the company. The earnings bulletin notes that it “entered into definitive agreements to divest its former Island Heritage and Lloyd’s reportable segments, respectively. The Island Heritage transaction was completed on April 5, 2012, as previously announced. The Lloyd’s transaction is expected to be completed before the end of the second quarter of 2012. These divestitures are part of a strategic business realignment to address changing business conditions, refocus the Company’s underwriting strategy on its property catastrophe reinsurance business and eliminate operations that absorb capital and produce lower returns.”
CEO David Brown reviewed those decisions and the progress that has been made towards implementing them. He stated: “I am pleased to say that we achieved these goals in the first quarter, and have started 2012 with a return to profitability, despite the ongoing challenging environment in the industry.
“Flagstone’s improved performance this quarter reflects the benefits of improving rates in its core business, which partially offset the reduction in income as the Company pares back its risk levels. It also begins to demonstrate the benefits of our expense saving initiatives, as well as the avoidance of significant exposure to first quarter 2012 loss events.
“Flagstone continues to make significant progress on its business realignment as it establishes a more nimble, cost-effective and opportunistic business. The Company remains focused on leveraging the existing strengths in Flagstone’s core businesses in order to deliver enhanced value for its shareholders.”
The complete report and information on accessing the earnings conference call may be obtained on the company’s website.
Source: Flagstone Re