Montpelier Re Holdings Ltd. ( MRH )
reported third quarter 2012 operating income of 85 cents per share,
surpassing the Zacks Consensus Estimate by 20 cents. Earnings
strongly rebounded from a loss of 40 cents incurred in the
prior-year quarter. Operating income of $48.5 million, compared
favorably with loss of $24.9 million in third quarter 2011.MONTPELIER RE (MRH): Free Stock Analysis ReportRENAISSANCERE (RNR): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment
Including net realized investment gains of $14.9 million, net
unrealized investment gains of $18.3 million, net losses from
investment-related derivative instruments of $2.1 million, net
foreign exchange losses of $10.8 million and net gains from foreign
exchange-related derivative instruments of $2.9 million, the
company reported net income of $72 million or $1.25 per share,
reversing the loss of $66.2 million or $1.07 per share in the third
quarter of 2011.
Gross premiums written declined 21% year over year. Net insurance
and reinsurance premiums earned waned 1.9% year over year to $153
million in the quarter.
Montpelier booked underwriting profit of $41.7 million in the
quarter, reversing the loss of $33.5 million in the year-ago
Net investment income in the quarter came in at $15.5 million,
down 8.8% from $17.0 million in the year ago-quarter.
The loss ratio in the quarter was 37% compared with 89.0% in the
year-ago quarter. Reported quarter loss ratio includes $16 million
of favorable prior-year loss reserve movements, offset by $16
million loss estimate for a number of smaller catastrophe
The combined ratio in the quarter was 72.7%, a stark improvement
from 121.5% reported in the year-ago quarter.
Montpelier exited the quarter with cash and cash equivalents of
$414.3 million, up 21.7% from 2011-end.
At quarter end, the debt level slightly increased to $327.9
million from $327.8 million at the end of 2011.
Book value per share as of September 30, 2012, was $26.61, nearly
20% higher than $22.18 as of September 30, 2011.
Montpelier spent $22 million to buyback approximately 1.04 million
shares in the third quarter of 2012.
Montpelier is well positioned to deliver robust numbers going
forward, given its increased exposure in the property catastrophe
lines of business. Also, focusing on underwriting operations,
augmenting capital flexibility, and strengthening its competitive
position augur well going forward. Moreover, the $300 million
senior debt refinancing supports enhanced capital flexibility. It
also scores strongly with the rating agencies.
The company also benefits from tax exemptions in Bermuda, as no
income taxes are levied there. Additionally, Bermuda Ministry of
Finance has assured exemption of Bermuda-imposed income,
withholding and capital gains taxes until 2035 on all Bermuda-based
The quantitative Zacks #2 Rank (short-term Buy rating) for the
company indicates a slight boost on the stock over the near
RenaissanceRe Holdings Ltd. ( RNR ), a
close competitor of Montpelier, is scheduled to release its third
quarter results on November 1 after the bell. It also carries a
Zacks #2 Rank.