Montpelier Re Reports Q4 Net of $73.7 Million; Full Year $152 Million

February 27, 2003

Montpelier Re Holdings Ltd., the Bermuda-based reinsurer formed by the White Mountains insurance group, reported net income of $73.7 million, or $1.11 diluted earnings per share, for the three months to December 31, 2002 and net income of $152.0 million, or $2.74 diluted earnings per share, for 2002.

Unrealized gains on investments for the quarter were $8.3 million and $33.7 million for the year. Comprehensive income, which includes unrealized gains, was $82.0 million for the fourth quarter, or $1.23 diluted comprehensive income per share, and $185.7 million for 2002, or $3.35 diluted comprehensive income per share. Book value per share at December 31, 2002 was $19.39, an increase of $1.17 in the fourth quarter and an increase of $2.98 in the twelve months to December 31, 2002.

Anthony Taylor, President and CEO commented: “Montpelier Re had a terrific 2002. In our first year of operations, we have achieved everything we set out to do, and more besides. From scratch, we have established a first-rate global specialty property reinsurer, assembled a top team of underwriters, obtained a listing on the NYSE, have written over $600 million in premiums and achieved a return on equity of over 18%.”

“2002 was a great year for us,” Taylor continued, “but we are confident we can do even better in 2003. Based on the success of our January renewal season, 2003 should see Montpelier Re increase written premiums by about 50% over the previous year. The markets in which we specialize remain strong and our capital levels are harmonizing nicely with our projected book of business. Our primary goal is to produce favorable long-term results for our shareholders – 2002 was a great start.”

CFO Tom Kemp noted: “We were very pleased with the results achieved for our shareholders in 2002. Due to the inherent lag in earning of premium under GAAP rules, our returns in the first year of operations are below that which would apply once a rolling book of business is in place. Against this backdrop, we were delighted with the 18.2% increase in book value during the year. In the fourth quarter of 2002, we benefited from the relatively low level of natural catastrophes experienced, and also saw some favorable development of loss reserves established in prior periods. Overall, the difference between the actual loss ratio in 2002 and the normalized loss ratio which we had been expecting increased annual earnings per share by about $0.60, and increased 2002 return on equity by about 3.7%. ”

“We are anticipating that we will write between $900 and $925 million of gross premium in 2003, an increase of approximately 50% over 2002,” Kemp continued. “Net earned premium is expected to come in at $775 to $800 million, an increase of about 135% over our first year.”

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