Max Re Posts $43 Million Q1 Net

May 6, 2004

Max Re Capital Ltd. joined its compatriots in Bermuda in reporting very good first quarter profits. The company announced that net income for the three months ended March 31, 2004, was 43 million, or net income of $0.87 per diluted share, compared to net income of $14.6 million, or net income of $0.38 per diluted share, for the three months ended March 31, 2003.

“Net operating income before minority interest, which represents net income before minority interest reduced by net realised gains on sale of fixed maturities, for the three months ended March 31, 2004, was $37.2 million, or net operating income of $0.75 per diluted share, compared with net operating income before minority interest of $14.7 million, or net operating income of $0.32 per diluted share, for the three months ended March 31, 2003,” said the bulletin.

Chairman, President and CEO Robert J. Cooney, commented: “Our first quarter produced record premiums written largely attributable to strong growth in traditional reinsurance and insurance. Our property and casualty business continues to show improved underwriting profits reflecting our change in product mix over the last eighteen months. Our favorable net operating income result this quarter is attributable to profitable traditional reinsurance and insurance underwriting and a return of 4.1% on the alternative investment portfolio.”

The bulletin also noted: “Gross premiums written for the three months ended March 31, 2004, were $439.5 million, coming entirely from property and casualty underwriting, compared to $430.5 million, all from property and casualty underwriting, for the three months ended March 31, 2003.

“Traditional reinsurance and alternative risk products accounted for 49.1 percent and 41.3 percent, respectively, of gross premiums written in the three months ended March 31, 2004, compared to 26.5 percent and 71.4 percent, respectively, of gross premiums written for the three months ended March 31, 2003. Net premiums earned for the three months ended March 31, 2004, were $198.9 million compared to $143.7 million for the same period of 2003.

“Net investment income for the three months ended March 31, 2004, increased to $18.8 million, from $14.5 million for the same period in 2003 and is principally attributable to increased holdings of cash and fixed maturities during the three months ended March 31, 2004, compared to the three months ended March 31, 2003.

“Net gains on alternative investments for the three months ended March 31, 2004 were $38.5 million, or a 4.1 percent rate of return, compared to net gains on alternative investments of $21.8 million, or a 3.1 percent rate of return, for the same period of 2003. Invested assets were $2.8 billion as of March 31, 2004.”

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