Reinsurer Montpelier Re Holdings Ltd. this week announced its net income for the third quarter more than tripled as it emerged unscathed from the 2003 hurricane season.

Montpelier, which was formed in the wake of the September 11, 2001 terrorist attacks, reported net income for the three months to September of $91 million, or $1.34 per share, compared to $26.6 million in the same period a year earlier.

The company said it expected strong rates to continue into 2004 as demand for quality reinsurance capacity grew.

Montpelier president and chief executive officer Anthony Taylor said: "Montpelier has again produced tremendous returns for our owners. Our core lines of business continue to perform strongly in 2003, with excellent growth and consistently low loss ratios.

"The planned expansion of our specialty and casualty writings is proceeding for 2004 and is attracting strong support from our key producers."

He added: "For the nine months ended September 30, 2003, gross premiums written and net premiums earned for the core property and specialty lines have grown 75 percent and 186 percent, respectively, compared to the same period in 2002. I expect that we will achieve further growth in these lines in 2004, albeit not to the same degree.

"Pricing and terms remain attractive and expected returns on capital employed remain very acceptable. The market is witnessing rating downgrades and continuing deterioration on back-year reserves which, when coupled with changes to industry standard modelling software, put pressure on the availability of quality capacity in the reinsurance market as we move into the renewal season."

Tom Kemp, chief financial officer, said: "Given the high level of loss events to hit the industry in the quarter, we are very happy to be reporting such positive results. I believe that the loss ratios we have experienced are driven in large part by Montpelier's strong underwriting focus together with our sophisticated risk management capabilities."

Despite a relatively high level of losses for the industry in the third quarter of 2003, Montpelier said it was not affected to any significant extent.

"The loss ratio was 21.5 percent for the quarter and 21.6 percent for the nine months to September 30, 2003. Montpelier released $12.5 million of net 2002 accident year reserves in the quarter, reducing the loss ratio in the three months to September 30, 2003 by 7.7 percent. The ultimate loss ratio for the 2002 underwriting year is now projected at approximately 27 percent."