Bermuda-based Montpelier Re Holdings Ltd. reported net income of $73.4 million for the fourth quarter of 2013, compared to a net loss of $26.6 million in the same period last year. For the full year 2013 the company reported net income of $191.2 million, compared to $214.3 million in 2012.
The earnings announcement said: “Operating income for the quarter was $90 million, or $1.78 per common share, representing a quarterly return on common equity of 6.2 percent. Net income for the quarter includes $2 million of realized and unrealized investment gains, $11 million of net foreign exchange losses and an $8 million one-time expense relating to the initial public offering of the Company’s newly-formed collateralized property reinsurance affiliate, Blue Capital Reinsurance Holdings Ltd.”
It also noted that net premiums written and earned in the quarter “were largely consistent with those of a year ago, when adjusting for reinstatement premiums recorded from windstorm Sandy in the fourth quarter of 2012.
The loss ratio for the quarter was 2 percent, which includes $42 million of favorable prior year loss reserve movements. The combined ratio was 39.a percent for the quarter, compared to 116 percent in Q4 2012. The combined ratio for 2013 was 56.1 percent, even lower than the 81 percent posted for 2012.
Net investment income was $14 million and the total return on the investment portfolio was 0.50 percent for the quarter.
President and CEO Christopher Harris commented: “The fourth quarter marked a strong end to a successful year for Montpelier. Solid underwriting execution across each of our operating segments combined to deliver strong profitability, with an 18.8 percent operating ROE for the year.
“Additionally, the initial public offering of Blue Capital Reinsurance Holdings Ltd. last November further strengthened our collateralized reinsurance presence.
“Despite competitive market conditions during the January renewals, we continued to succeed in achieving preferred signings and in expanding our product mix,” Harris continued. “With our strong balance sheet and specialist underwriting approach, we believe we are positioned to perform well across market cycles.”
During the fourth quarter of 2013, the Company repurchased a total of 827,558 common shares at an average price of $27.57 per share. During the first quarter of 2014, the Company has thus far repurchased an additional 1,246,700 shares, at an average price per share of $28.07.
As of December 31, 2013, the Company’s total shareholders’ equity was $1.642 billion, and its total capital was $2.041 billion.
Source: Montpelier Re Holdings