Bermuda Reinsurers’ 2Q Profit Suffers on T-Storms

NU Online News Service, July 28, 3:28 p.m. EST

Bermuda-based reinsurers continued to report reduced earnings, driven mainly by catastrophe losses.

Everest Re Group Ltd. says second-quarter net income fell about 16 percent to $131.3 million as pretax catastrophe losses net of reinstatement premiums were $113 million—up from $64.6 million a year ago during the same period.

Hamilton, Bermuda-based property and casualty reinsurer Everest says catastrophe losses were higher than previously announced because of the “late reporting by a single client of increased exposures to the New Zealand earthquake” earlier this year.

Montpelier Re Holdings Ltd., also of Hamilton, says $39 million of net catastrophe losses from tornadoes in the U.S. in April and May, plus another $15 million of non-catastrophe losses during the second quarter, resulted in net income of $23.6 million—about a 66 percent drop from net income of $69.9 million the prior year during the same quarter.

Christopher Harris, president and CEO of the short-tail reinsurer and specialty insurer, says mid-year catastrophe renewals contained average rate increases of 8 percent in the U.S. and 20 percent in international portfolios.

The combined ratio was 103 for the 2011 second quarter, compared to about 60 last year during the same period, says Montpelier.

Finally, Maiden Holdings Ltd. reports a net loss of $24.4 million during the second quarter as it incurred $9.5 million in losses from U.S. thunderstorms and tornadoes.

Maiden says its second-quarter combined ratio was 99.8 compared to 96.3 last year.