NU Online News Service, Oct. 27, 1:47 p.m. EDT

Two Bermuda-based insurers say catastrophes hurt their third-quarter earnings, with Everest Re reporting a 64 percent drop in net income and Montpelier Re posting a net loss.

Hamilton, Bermuda-based Everest Re says third-quarter net income dropped by $111 million to $63 million. Total revenues were down 13 percent, or $153 million, to $1.02 billion.

For the first nine months of this year, Everest Re reports a net loss of $122 million compared to net income of $308 million for the prior year. Revenues are down 1 percent, or $39 million, to $3.4 billion.

For the quarter, catastrophe losses were $119 million, compared to $89 million for the prior year’s third quarter. The losses include $35 million for Hurricane Irene. The remainder is attributable to increased loss estimates on first-quarter events related to the earthquakes in Japan and New Zealand.

During a conference call with financial analysts, Joseph V. Taranto, chairman and chief executive officer, calls the results “solid,” especially considering the catastrophes and poor investment results.

The company is getting rate increases, he says, especially in property catastrophe, where rates for exposures without loss are expected to increase 5 percent and risks with losses “are facing some meaningful rate increases.”

Montpelier Re, also based in Hamilton, reports a third-quarter net loss of $66 million, compared to net income of $90 million for the same period last year. The company reports net insurance and reinsurance premiums written of $122 million, up close to 2 percent, or $2 million. The company’s combined ratio for the period rose 52.1 points to 121.5.

For the first nine months of this year, Montpelier Re reported a net loss of $142 million, compared to net income of $167 million for the prior year. The combined ratio during that period jumped 50.7 points to 135.5.

The company says catastrophe losses in the third quarter were $60 million, including $30 million from Hurricane Irene, Texas wildfires and other U.S. events.

Christopher Harris, president and CEO of Montpelier, addressing analysts, calls the third quarter a dynamic period, but admits that it was “disappointing to report a loss.”

He says the company is well positioned to support business going forward and take part in a hardening cycle.

Michael S. Paquette, the company’s chief financial officer notes the company is selling Montpelier U.S. Insurance Company, its U.S. excess and surplus lines insurance business representing $55 million in premium, to Selective Insurance Group. The transaction is expected to close in the fourth quarter of this year.

Special Reports /

Cats Take Bite Out of Everest Re & Montpelier Re Earnings

Related Stories

Recommended For You