After seeing property reinsurance premiums plunge in the January renewal period, Bermuda-based Montpelier Re has announced it will pay its shareholders a special dividend of $390 million.

The decision to issue the dividend of $5.50 per common share and per warrant was made with a ?view to maximising sustainable long-term growth in shareholder value?, according to chief executive officer Anthony Taylor.

Investors welcomed the announcement, pushing the insurer?s shares up $1.08 to $40.50 in afternoon trading.

Mr. Taylor said earlier this month that Montpelier ? formed after the September 11, 2001 terrorist attacks ? had seen its competitors cutting rates in property reinsurance rates.

And he told National Underwriter that underwriting teams at rival reinsurers were contradicting the claims of chief executives that they would not cut costs to maintain or increase market share.

Montpelier is also increasing its regular quarterly dividend by 5.9