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Montpelier Re swings to annual profit

@$:Bermuda-based Montpelier Re felt the wrath of Superstorm Sandy, reporting a loss of $27 million for the fourth quarter of 2012, but the reinsurer swung to an annual profit.

Though the company’s fourth-quarter operating loss of 31 cents per share fared better than analysts’ expectation of a 79 cents per share loss for the quarter, Montpelier Re took a $94 million hit from Sandy, which struck in October. The loss was partially offset by $26 million in prior-year loss reserve development.

For the year, the global reinsurer recorded a net income of $214 million, or $3.67 per share, compared to a $124 million net loss in 2011.

“I am pleased with our performance for the year,” said Christopher Harris, president and CEO. “Despite windstorm Sandy, we produced 17 percent growth in fully converted book value per share on the strength of our balanced underwriting portfolio and solid investment results. Both our Bermuda and Lloyd’s underwriting platforms delivered strong profitability.”

Montpelier Re wrote more business in the quarter with net premiums written up two percent, or 19 percent, when adjusting for reinstatement premiums ($5 million) and the sale of MUSIC ($15 million).

The company’s combined ratio for the quarter stood at 116 percent and 81 percent for the year.

In December, Montpelier Re launched a new $100 million reinsurance venture, Blue Capital Global Reinsurance Fund and in January stated it has already deployed $57 million of the capital raised at its share issue.

“We were also pleased to further expand our underwriting partnerships with the successful launch of the Blue Capital asset management platform in December,” said Mr Harris of the venture.

Net investment income for the quarter was $17 million and $67 million for the full year. At year-end, total shareholders’ equity was $1.6 billion and total capital was $2 billion. At December 31, the company’s book value stood at $26.14, a decrease of 1.3 percent for the fourth quarter and an increase of 17 percent for the full year.

Heading into 2013, Montpelier Re expects grow certain portfolios while scaling back others — looking to write more business throughout the year.

“Our underwriting teams executed well during a competitive January renewal season,” said Mr Harris. “We expect a modest increase of one percent to five percent for net written premiums in the first quarter of 2013 driven by targeted growth in our property catastrophe and marine portfolios offset by reductions within certain other specialty lines.”

@$:Montpelier Re CEO Chris Harris
Montpelier Re Q4 Report Card

Net loss: $26.6 million compared to net income of $25 million in 2011

Gross premiums written: $94.4 million compared to 91.7 million in 2011

Combined ratio: 116 percent compared to 116.9 percent in 2011

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Published February 08, 2013 at 8:00 am (Updated February 07, 2013 at 8:04 pm)

Montpelier Re swings to annual profit

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