Low claims helped drive Bermuda-based reinsurer Montpelier Re Holdings Ltd. to net income of $103.8 million, or $1.56 diluted earnings per share, for the first three months of the year, 2003.

Montpelier Re, formed in the wake of the September 11, 2001 terrorist attacks, said it had comprehensive income of $103.0 million for the quarter, or $1.55 diluted comprehensive income per share. Comprehensive income included $800,000 of unrealised losses on investments for the quarter.

"The first quarter has gone extremely well for Montpelier Re," said Anthony Taylor, president and chief executive officer.

"In areas of premium generation, programme leadership, portfolio design and diversification and in the continuing enhancement of our modelling capabilities, we are very pleased at the success we believe we have achieved in 2003 so far."

He added: "In 2003, we plan to continue to build up our planned premium levels, further diversify our portfolio of risks and to evolve as a company as the wider marketplace itself evolves.

Conditions have been attractive in our business in the last 15 months and we believe we are positioning ourselves to produce favourable long-term results for our owners."

Tom Kemp, chief financial officer, said: "We were pleased that in the first quarter of 2003, Montpelier met or exceeded its revenue projections, had encouraging results in the development of prior period reserves and in the low number of loss events in our portfolio, and did not suffer any investment impairments. "Earned premiums are picking up nicely as unearned premium reserves from 2002 begin to unwind in 2003. If we continue to generate premium at our anticipated rate, earned premiums will accelerate throughout 2003.

He added that revenue levels remained in line with projections and it was maintaining its guidance for gross written premiums of between $900 and $925 million and net earned premium of between $775 and $800 million for the whole of 2003."

Gross premiums written were $366.6 million for the quarter, an 80 percent increase over the same period in 2002. Reinsurance premiums ceded were $34.3 million.

Net premiums earned were $184.7 million in the three months to March 31, 2003, a 500 percent increase over the first quarter of 2002. Approximately two thirds of the earned premium relates to the 2002 underwriting year, and the remainder to business written in 2003.

Net investment income, including both realised and unrealised gains and losses and foreign exchange gains, was $16.9 million for the quarter.

Loss and loss adjustment expenses were $47.7 million for the quarter, representing a loss ratio of 25.8 percent.

The ratio of acquisition costs and general and administrative expenses to net earned premiums was 27 percent compared to 29.3 percent in the same period in 2002.

Combined ratios were 52.8 percent for the first quarter of 2003 compared to 68.5 percent for the first quarter of 2002.