Montpelier Re Posts $104.7 Million Q4 Net Income; $463.5 Million Full Year

February 22, 2010

Bermuda-based Montpelier Re Holdings Ltd. reported greatly improved fourth quarter and full year financial results. The reinsurer’s fourth quarter net income was $104.7 million ($1.25 per share), compared to a loss of $47.7 million in Q4 2008. For 2009 net income was $463.5 million ($5.36 per share), compared to a net loss of $145.5 million for 2008.

The Company reported operating income, which excludes capital gains/losses, of $94 million ($1.12 per share) for the fourth quarter and $271 million ($3.13 per share) for the year ended December 31, 2009. Operating return on equity (ROE) was 5.5 percent for the quarter and 17.5 percent for the full year.

“Realized and unrealized gains on investments, foreign exchange and the gain on early extinguishment of debt, which are included in net income, were $11 million for the quarter and $193 million for the full year,” said the bulletin.

“Fully converted book value per share was $21.14 at December 31, 2009, an increase of 7.3 percent for the quarter and 34.6 percent for the full year, inclusive of dividends. The combined ratio was 48.7 percent for the quarter and 62.2 percent for the year ended December 31, 2009. The fourth quarter loss ratio was 11.4 percent, which includes 15.7 points ($24 million) in favorable releases from prior years’ loss reserves. The full year loss ratio was 24.2 percent which includes 13.2 points ($76 million) of favorable prior period loss reserve development.”

President and CEO Christopher Harris commented: “The fourth quarter rounds off a record year for the Company. For the full year, we produced a 35 percent growth in fully converted book value per share, our primary measure of delivering value to our shareholders, driven by terrific underwriting results and an 11 percent return on our investment portfolio. While this is a very satisfying result, we will look to build on this success in 2010 by remaining focused on optimizing our use of catastrophe capacity and improving our capital and operating efficiency as the London and U.S. platforms mature.”

Montpelier Re also noted that “net written premiums grew by 28 percent for the quarter compared to the fourth quarter of 2008, excluding the impact of reinstatement premiums, as the result of the conversion of increased opportunities in the Company’s Lloyd’s and US operations. For the full year, net premiums written increased by 16 percent, excluding the impact of reinstatement premiums, driven by growth in the London and US operations and strong property catastrophe rate levels.”

Harris added: “2009 was a year of several milestones for the Company including Syndicate 5151 generating a full year profit for the first time. We also established a significant marine capability in London and launched Paladin, a UK based specialty MGA platform, both of which will drive growth into 2010 and beyond.”

For the complete earnings report and details on accessing the replay of the earnings conference call, held Feb. 17, go to the Company’s web site at: www.montpelierre.bm. A telephone replay of the conference is also available through March 4, 2010 by dialing 1-877-344-7529 (toll-free) or 1-412-317-0088 (international) and entering the passcode 433731.

Source: Montpelier Re

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