Montpelier Re Posts $26.5 Million Q3 Net Profit

November 6, 2002

Bermuda- based Montpelier Re Holdings Ltd.(MRH) reported net income of $26.5 million, or $0.50 diluted earnings per share, for the third quarter of 2002, and net income of $78.3 million, or $1.49 diluted earnings per share, for the nine months to September 30, 2002.

MRH was set up in Bermuda by White Mountains Insurance and international reinsurance broker Benfield Greig, with additional investment from Credit Suisse First Boston, in the wake of the Sept. 11 attacks. The company said its “Comprehensive income,” which included $15.6 million of unrealized gains for the quarter, was $42.1 million, or $0.79 diluted comprehensive income per share, and $103.7 million for the first nine months of 2002, or $1.98 diluted comprehensive income per share.

Book value per share at September 30, 2002 was $18.22, an increase of $0.71 in the third quarter and an increase of $1.81 in the nine months to September 30, 2002. “This strong result was driven by an encouraging underwriting performance and a solid total return in the investment portfolio,” said the announcement.

Anthony Taylor, President and CEO, commented: “We are very pleased with the premium volumes and rate increases seen in the third quarter and since our inception in December 2001. In the first three quarters of 2002, we benefited from the relatively low level of catastrophe losses. We experienced limited exposure to the European floods in the third quarter and recorded a related reserve of $25.0 million.”

Taylor indicated that he felt that, “the reinsurance market remains strong, our balance sheet is in great shape and, as a result, the outlook for 2003 is excellent.”

Tom Kemp, MRH CFO noted that, “We regard the increase in book value per share as the best single measure of our performance over time. For the nine months to September 30, 2002, the increase represents an annualized return on equity of 15.0%. Since our reinsurance book is exposed to catastrophes, our future results may not be smooth from quarter to quarter. We are, however, committed to producing favorable long-term results to investors, and are continually seeking opportunities to deploy our capital at very attractive prospective returns while maintaining a disciplined underwriting approach.”

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