Montpelier Re Holdings Ltd. suffered a $142 million net loss during the third quarter of 2008, reflecting expected losses of $130 million from Hurricanes Gustav and Ike and a combined total of $88 million in realised, unrealised and foreign exchange losses.

The reinsurer, which made a profit of $101.3 million for the same period in 2007, also reported an operating loss of $55 million, versus operating income of $78.3 million last year.

Its net loss was accounted for by $27 million of net realised losses, $48 million of net unrealised losses and $13 million of net foreign exchange losses.

As a result of the adoption of new accounting system FAS 159 in January 2007, the company reports virtually all of its net unrealised investment gains and losses, whether temporary or permanent, as a part of net income.

Fully converted book value per share was $16.61 as of September 30, 2008, a decrease of 8.5 percent for the quarter and 5.8 percent for the year, inclusive of dividends.

The company's loss ratio for the third quarter of 2008 was 119.9 percent compared to 26.8 percent for the comparable 2007 period. The current period includes $23 million of favourable releases from prior year loss reserves versus $5 million included in last year's comparable period.

Chris Harris, president and chief executive officer, said: "The third quarter was a challenging period for our industry with results impacted by both major storms and investment market volatility. While it is disappointing to suffer a loss in any quarter, our Ike and Gustav losses were in line with expectations.

"Additionally, our conservatively positioned investment portfolio held up well in a difficult investing climate. We enter the January renewal season with a strong balance sheet and plan to take full advantage of the attractive opportunities that we believe will increasingly present themselves."

MONTPELIER Q3

REPORT CARD

Net income: loss of $142 million compared to a profit of $101.3 million in 2007

Combined ratio: 149.6 percent compared to 57.9 percent

Gross premiums written: $103 million compared to $128.3 million