Ram Holdings Ltd. suffered a $159.4 million annual net loss as a result of the "unprecedented impact" of the credit crisis during 2008.

That was according to Vernon Endo, president and CEO of Ram Holdings, who said in a letter to shareholders that the loss was due to $214.8 million in losses and loss adjustment expenses related to its US residential mortgage exposure.

But Mr. Endo said Ram Holdings started a strategy to reduce risk and conserve capital, exchanging or replacing $21.5 billion of the company's insured portfolio, which along with portfolio paydowns, reduced its exposure to troubled sectors (mainly US residential mortgage, student loans and ABS/CMBS and CDO exposure) from $8 billion at March 31, 2007 to approximately $1.1 billion currently.

Meanwhile the company's low risk public finance segment now represents around 71.5 percent of its insured portfolio and to save money it stopped writing new business in 2009, in addition to exercising the put on its $50 million Blue Water Trust auction rate preferred facility in February this year and issued preferred stock, which increased its statutory capital by a similar amount, he said.

Going forward, Mr. Endo said Ram Holdings would focus on managing its liquidity, continue to reduce risk through commuting business economically, use its excess capital to deleverage its balance sheet and relieve payment obligations, while cutting operating expenses in line with its requirements.

"While there have been recent improvements in the credit markets, we continue to be cautious as the recovery in housing is not expected to occur until 2010," he said.

"The events of the past two years have been unprecedented and the timing of overall economic recovery remains uncertain.

"We are confident that the actions taken over the past 18 months as well as our strategy going forward places the company in the best position to emerge from this crisis."