The New York-based reinsurance group Transatlantic Holdings (TRH) became the first major reinsurer to announce its 2008 results. TRH reported net income for the year ended December 31, 2008 of $102.3 million, or $1.53 per common share (diluted), compared to net income of $487.1 million, or $7.31 per common share (diluted), in 2007, a 79 percent decline.
Net income for the fourth quarter of 2008 totaled $4.4 million, or $0.07 per common share (diluted), compared to $112.5 million, or $1.68 per common share (diluted), in the fourth quarter of 2007, a 96.1 percent decline.
President and CEO Robert F. Orlich described 2008 as “an extraordinary year. Tumultuous activity in financial and credit markets caused significant impairment write-downs in our investment portfolio and Hurricane Ike, one of the costliest industry-wide insured catastrophes in history, also hurt results.”
Commenting on the January 1 renewal season, Orlich stated: “Pricing stabilized in most classes and improved in others, most significantly in U.S. catastrophe-exposed lines. Despite the uncertainty surrounding AIG’s ownership interest in Transatlantic, we successfully renewed virtually all business that met our underwriting standards – testament both to our team’s professionalism and the continued support from our customers and brokers. We expect the overall pricing trend to improve in the coming months.”
Net premiums written for the year increased by 3.9 percent to $4.108 billion from $3.952 billion. The reinsurer also managed to keep its combined ratio under 100 percent at 98.5 percent for the year (71.5 percent loss ratio) and a 98.1 percent combined ratio for the fourth quarter.
At least TRH, in which American International Group (AIG) holds 59.19 percent of the shares (at least for the moment), managed to make a profit. In the days ahead, as companies announce their fourth quarter and full year results, there could well be a lot of red ink.
The full report and additional comments may be obtained on the Company’s web site at: www.transre.com.
Source: Transatlantic Holdings
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