Montpelier Re Holdings Ltd., the Bermuda-based provider of short-tail reinsurance and other specialty lines, reported operating income for the third quarter ended September 30, 2014, of $39.9 million, or $0.86 per common share, compared with $71.5 million, or $1.38 per common share, for the third quarter in 2013.
Net income for the quarter was $34.8 million, compared to $53.0 million for the same period last year. Net income for the 2014 quarter included $16 million of net foreign exchange gains and $21 million of realized and unrealized investment losses.
Fully converted book value per common share was $32.27, an increase of 2.3 percent from June 30, 2014 and an increase of 11.2 percent from December 31, 2013, each after taking into account common share dividends declared during the periods.
Net premiums written in the third quarter were up 13 percent year-over-year, when adjusting for reinstatements, with increased writings within the company’s Montpelier at Lloyd’s and collateralized reinsurance segments offsetting a decrease in writings at Montpelier Bermuda. Net premiums earned in the third quarter were up 7 percent on the same basis.
The loss ratio for the quarter was 38 percent, which includes $20 million of net losses from June 2014 catastrophe events, offset by $37 million of favorable prior year loss reserve movements. The combined ratio was 74 percent for the quarter.
Net investment income was $12 million for the quarter, and the total return on the investment portfolio was -0.3 percent.
Christopher Harris, president and chief executive officer, said, “Our underwriting teams executed well in a competitive market environment during the third quarter, driving solid profitability with a 74 percent combined ratio. We are well positioned to navigate a challenging market by building on our strengths as a long-term partner for our investors and clients.”
During the third quarter of 2014, the company repurchased a total of 1,848,726 common shares at an average price of $31.12 per share. The company’s common shares outstanding at September 30, 2014 were 44.3 million, down more than 10 percent from year-end. During the fourth quarter of 2014, the Company has repurchased an additional 939,395 common shares.
Source: Montpelier Re
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