Bermuda-based Montpelier Re Holdings Ltd’s profits dropped almost $50 million during the second quarter as the company suffered $39 million of catastrophe losses from the tornadoes in the US in April and May.The re/insurer reported net income of $21 million for the quarter compared to $69.9 million for the same period last year.Fully converted book value per share was $23.36, an increase of 1.6 percent from March 31, 2011, after taking into account common share dividends declared during the quarter.Operating income for the quarter was eight cents per share ($5 million) and net income was 33 cents per share, each expressed after preferred share dividends. The net impact of realised and unrealised gains from investments and foreign exchange, which is included in net income, was $16 million for the quarter.The 69 percent loss ratio for the second quarter includes $39 million of net catastrophe losses, resulting from tornado activity in the US in April and May, in addition to $15 million resulting from a high incidence of non-catastrophe losses in the quarter. This was partially offset by $20 million of favourable prior year loss reserve movements. The combined ratio was 103 percent for the quarter.Net investment income was $17 million for the second quarter and the total return on the investment portfolio was one percent.Christopher Harris, president and CEO of Montpelier Re, said: “Mid-year property catastrophe renewals were encouraging with average rate increases of eight percent in the US and 20 percent in the international portfolios. For the time being, we have maintained our reduced catastrophe risk profile in light of our expectation of further price increases heading into 2012.“Consequently, we believe we are well-positioned and have the capital flexibility to take advantage of a market turn.”During the second quarter of 2011, the company repurchased a total of 811,350 common shares for $15 million and issued $150 million of non-cumulative perpetual preferred shares.As of June 30, 2011, shareholders’ equity was $1.62 billion and total capital was $1.95 billion.