Bermuda-based Flagstone Reinsurance Holdings Limited posted a rise in basic book value per share to $14.17, despite a drop in fourth quarter earnings to $51.4 million, or $0.60 per diluted share, compared to $63.6 million, or $0.88 per diluted share, for the quarter ended December 31, 2006.
Net income for the year ended December 31, 2007 was $167.9 million, or $2.05 per diluted share, compared to $152.3 million, or $2.16 per diluted share, for the year ended December 31, 2006. Gross premiums written for the fourth quarter of 2007 were $65.1 million, and $577.2 million for the year ended December 31, 2007.
Flagstone’s gross premiums written for the fourth quarter of 2007 increased to $65.1 million, compared to $26.5 million for Q4 2006, an increase of 145.5 percent from the prior quarter. Gross premiums written for the year ended December 31, 2007 were $577.2 million compared to $302.5 million for 2006, an increase of 90.8 percent from the prior year.
The Company noted that the “increase in gross premiums written for both periods was due primarily to increased participations on programs from our existing clients and the addition of new clients due to our larger capital base and growth in our franchise; and, (ii) the acquisition of the controlling interest in Island Heritage Holdings Limited (“Island Heritage”) in July 2007 which resulted in the inclusion of $11.0 million in gross premiums for the quarter and $32.9 million in gross premiums for the year.”
Chairman Mark Byrne indicated that the Company was “pleased with our fourth quarter results and our full year earnings.” He added that the growth in book value was “the best single measure of our performance for shareholders.” He also explained that since “our reinsurance book is exposed to catastrophes, our results will not be smooth from quarter to quarter. However, as our diversifying business lines become more significant to our overall book, our earnings variability should decrease.”
CEO David Brown added his satisfaction with the 2007 results. He commented: “Our share of international catastrophic losses serves to demonstrate that we have successfully developed a diversified portfolio of risks and, as a consequence, our results are not disproportionately dependant on the absence of catastrophes in North America.”
As a result Flagstone now has “over 250 staff now working in nine offices in seven countries,” he continued. “In addition to the growth in international catastrophe exposure this platform is now producing growth in short tail specialty lines, which we expect to be an increasing proportion of our portfolio over the next few years.”
The full report and replay of the earnings conference call are available on the Company’s web site at: www.flagstonere.bm.
Source: Flagstone Holdings
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