HAMILTON, Bermuda--(BUSINESS WIRE)--July 27, 2005--Montpelier Re Holdings Ltd. (NYSE - MRH) today reported net income of $108.7 million, or $1.62 diluted earnings per share, for the three months to June 30, 2005 and net income of $183.2 million, or $2.72 diluted earnings per share, for the first six months of 2005. Comprehensive income for the quarter was $110.6 million, or $1.65 diluted comprehensive income per share, and $146.6 million or $2.18 diluted comprehensive income per share for the six months to June 30, 2005.

Book value per share at June 30, 2005, on a fully converted basis (1), was $22.45. Total return to shareholders (2) for the second quarter of 2005, incorporating the change in fully converted book value per share of $1.21 and a dividend of $0.36, was 7.4%. The total return for the trailing four quarters was 10.2%.

Anthony Taylor, President and CEO, commented: "Montpelier produced a good underwriting result this quarter. Rates were encouraging for programs impacted by 2004 storm losses and we wrote a greater number of Florida programs than initially anticipated. Outside these loss-impacted programs, rates are still softening as expected and we have continued to decline programs which do not meet our underwriting guidelines. We have, however, written a limited number of attractive new opportunities and, overall, premium was higher than expected in the second quarter."

Kip Oberting, Chief Financial Officer, said: "In the second quarter, our total capital increased by $85.3 million after accruing a regular quarterly dividend of $25.4 million. Total capital stood at $1.7 billion at June 30, 2005."

During the second quarter, Montpelier participated in the founding of a new reinsurance vehicle, Rockridge Reinsurance Ltd. ("Rockridge"). Rockridge was established to assume attractive high-layer, short-tail risks principally from Montpelier's wholly-owned subsidiary, Montpelier Reinsurance Ltd. ("Montpelier Re"), and was capitalized with $90.9 million in equity, including a $10 million investment by Montpelier Re. Russell Fletcher, Montpelier Re's Chief Underwriting Officer, commented, "Our new relationship with Rockridge provides us with the capacity to increase gross lines in specific programs where we see favorable underwriting opportunities. We then cede this incremental business to Rockridge and earn fees for the services we provide."

Anthony Taylor added, "Montpelier's co-founder in the venture is hedge fund manager, West End Capital Management (Bermuda) Ltd, which will manage Rockridge's investment portfolio in a fixed income arbitrage strategy. We believe Montpelier has an excellent partner in West End, which was founded by Mark Byrne, son of our former Chairman, Jack Byrne."