Montpelier Re shares fell almost seven percent yesterday after the Bermuda reinsurer reported premiums slumped as it cut exposure to hurricane risks, MarketWatch reported.

Montpelier reported late on Wednesday that earnings topped analyst estimates as it benefited from a light hurricane season this year.

During the 2005 third quarter, Montpelier was among reinsurers hit hardest by Hurricane Katrina and other storms, reporting a net loss of $875.1 million. Since then, the company has been reducing its hurricane exposure.

That resulted in net written premiums of $107.8 million in the third quarter, down 55 percent from a year earlier.

Excluding premiums for reinstating coverage, Montpelier premiums fell 31 percent in the period, Susan Spivak, an analyst at Wachovia, calculated in a note to clients. That was a much bigger drop than the 10.5 percent decline she expected.

Cliff Gallant, an analyst at Keefe, Bruyette & Woods, was expected net written premium growth of almost ten percent in the quarter.

“While we believe Montpelier’s strategy to reduce exposure to the increased frequency of severe catastrophic events is appropriate, these changes will likely lead to lower future returns,” Spivak wrote. “It will be difficult for Montpelier to sustain the premium multiple it has in the past.”

Montpelier shares dropped 6.78 percent or $1.36 to $18.39 at yesterday’s close.

Meanwhile, shares of another reinsurer, Endurance Specialty Holdings, climbed 6.1 percent yesterday, closing up $2.12 at $36.80.

Endurance said late on Wednesday that third-quarter net income came in at $128.2 million, or $1.74 a share. That compared with a net loss of $377 million, or $6.26 a share, a year earlier.

Operating earnings, which exclude net realised investment gains and losses, came in at $137.2 million, or $1.87 a share, Endurance added.