Friday, October 24, 2008 3 comments ++[ CLICK TO COMMENT ]++

Montpelier Re Reports 3Q 2008 Results

In line with the hurricane losses it announced earlier, Montpelier reported its 3rd quarter results:

Montpelier Re Holdings Ltd. (the "Company") reported an operating loss of $55 million (or $0.65 per share), which excludes net investment and foreign exchange gains and losses, income taxes and extraordinary gains, for the quarter ended September 30, 2008. The Company’s operating loss reflects a combined net financial impact from Hurricanes Gustav and Ike of $130 million, which is in line with our prior announcement.

The Company reported a net loss of $142 million (or $1.69 per share) for the quarter ended September 30, 2008. The Company’s net loss reflects $27 million of net realized losses, $48 million of net unrealized losses and $13 million of net foreign exchange losses. The Company noted that, as a result of the adoption of FAS 159 in January 2007, it reports virtually all of its net unrealized investment gains and losses, whether considered temporary or permanent, as a component of net income.

Fully converted book value per share was $16.61 as of September 30, 2008, a decrease of 8.5% for the quarter and 5.8% for the year, inclusive of dividends.

Not great results but it's reasonable given the low hurricane losses. It's difficult to say what the actual situation happens to be given that around half of the reported losses are unrealized portfolio losses. It's not clear if these mark-to-market losses will reverse. The stock has totally collapsed this year (although it's up today) but I don't think it has anything to do with the performance.


3 Response to Montpelier Re Reports 3Q 2008 Results

October 25, 2008 at 4:32 PM

I like Montpelier Re, and have noticed it's held by Cundill (along with Munich Re). I think the P&C insurers and reinsurers are probably the most attractive financials.

If I didn't already have exposure in this area (Fairfax, Tokio Marine) I'd happily own MRH.

October 27, 2008 at 11:23 AM

Thanks for the vote of confidence John :)

October 28, 2008 at 2:24 PM

Hi Sivaram

I have been following MRH for the past year. Do not own any but have come close a few times at higher price. Wilbur Ross the billionaire investor has a sizable stake in the company as well as Marty Whitmans Third Avenue Fund. Both are big buyers of distressed assets. Both bought at much higher price. I beleive they have stock and bond portfolio managed by value firm Tweedy Brown.


Post a Comment