Montpelier Re Holdings Ltd.
) reported fourth quarter 2012 operating loss of 31 cents per
share, better than the Zacks Consensus Estimate loss of 80 cents.
Quarterly loss was wider than loss of 27 cents incurred in the
Including realized and unrealized investment gains of $3 million,
net foreign exchange losses of $3 million and loss on early
extinguishment of debt of $10 million, the company reported net
loss of 40 cents per share against net income of 40 cents per
share in the fourth quarter of 2011.
Quarterly Operational Update
Gross premiums written increased 2.9% year over year. Net
insurance and reinsurance premiums earned improved 5.6% year over
year to $156.6 million.
Underwriting loss incurred was $25.0 million compared with a loss
of $25.1 million in the year-ago quarter.
Net investment income came in at $16.8 million, down 1.7% from
$17.1 million in the year-ago quarter.
The loss ratio was 81.7% compared with 81.3% in the year-ago
quarter. The combined ratio improved 10 basis points from the
year-ago quarter to 116%.
Full Year Highlights
Operating income reached $2.58 per share, exceeding the Zacks
Consensus Estimate of $2.12. Results reversed the loss of $2.50
incurred in 2011.
Including $82 million of realized and unrealized investment
gains, $9 million of net foreign exchange losses and a $10
million loss on early extinguishment of debt, net income was
recorded at $3.67 per share in 2012, rebounding from the year-ago
loss of $2.01 per share.
Montpelier Re exited 2012 with cash and cash equivalents of
$401.4 million, down 14.3% from the end of 2011.
At the end of 2012, the debt level increased to $399.1 million
from $327.8 million at the end of 2011.
Book value per share as of Dec 31, 2012, came in at $26.14, up
17% year over year.
Share Repurchase and Dividend Update
Montpelier Re spent $13 million to buyback 0.59 million common
shares in the fourth quarter taking the total amount spent to
repurchase 5.98 million shares in 2012 to $121 million.
In Nov 2012, the board approved a 9.5% increase in its quarterly
dividend. Montpelier will now pay a quarterly dividend of 11.5
cents per share.
Performance of Other Property and Casualty
) reported fourth-quarter 2012 operating earnings of 89 cents per
share, surpassing the Zacks Consensus Estimate of 44 cents by
102%. However, it missed the year-ago level of $1.13 by 32.1%.
) reported the fourth-quarter operating earnings of 16 cents per
share, significantly ahead of the Zacks Consensus Estimate of a
loss of 46 cents per share. Earnings were down substantially by
90% year over year.
) fourth-quarter 2012 operating earnings per share of 59 cents
significantly beat the Zacks Consensus Estimate of a loss of 7
cents, but lagged the year-ago quarter's earnings of $1.45 a
Montpelier Re expects net written premiums in the first quarter
of 2013 to improve 1%-5%, on the back of targeted growth in
property catastrophe and marine portfolios. However, soft
performance in few specialty lines is expected to offset the
Montpelier Re 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.
It also expanded underwriting partnerships with the launch of
the Blue Capital asset management platform in December last year.
Moreover, the company benefits from tax exemptions in Bermuda.
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Montpelier Re currently carries a Zacks Rank #3 (Hold).