MontpelierRe Beats but Lags Y/Y - Analyst Blog
25 April 2013 - 9:06PM
Zacks
Montpelier Re Holdings Ltd. (MRH) reported
first-quarter 2013 operating income of $1.18 per share, better than
the Zacks Consensus Estimate of 89 cents. However, earnings were
4.1% lower than $1.23 per share in the year-ago quarter.
Including net realized investment gains of $9.1 million, net
unrealized investment losses of $9.8 million, net gains from
investment-related derivative instruments of $6.8 million, net
foreign exchange gains of $21.1 million and net losses from foreign
exchange-related derivative instruments of $1.1 million, Montpelier
reported net income of $92.1 million or $1.65 per share in the
first quarter. It compared unfavorably with net income of $107.1
million or $1.74 per share in the prior-year quarter.
Quarterly Operational Update
Montpelier’s gross premiums written increased 0.6% year over year.
Net insurance and reinsurance premiums earned inched down 0.5% year
over year to $159.7 million.
Underwriting income declined 8.9% year over year to $60.1
million.
Net investment income of Montpelier came in at $16.4 million, down
6.8% from $17.6 million in the year-ago quarter.
The loss ratio was 32% in the reported quarter. Combined ratio
deteriorated 350 basis points from the year-ago quarter to
62.4%.
Financial Update
Montpelier exited the first quarter of 2013 with cash and cash
equivalents of $3.2 million, down 2.4% from the end of 2012.
At the end of the first quarter, total debt was $399.1 million,
flat with the 2012 end level.
Book value per share as of Mar 31, 2013, came in at $27.49, up
13.1% year over year.
Share Repurchase and Dividend Update
Montpelier spent $37 million to buyback 1.494 million common shares
in the first quarter. Following the end of the first quarter to
date, the company has already spent $15 million to repurchase 0.6
million shares.
Performance of Other Property and Casualty
Insurers
RLI Corporation (RLI) reported first-quarter 2013
operating earnings of $1.04 per share. The result lagged the Zacks
Consensus Estimate of $1.06 by 1.89% but surpassed the year-ago
level of 96 cents by 8.3%. The year-over-year improvement came on
the back of better underwriting results at Casualty and Surety.
Everest Re Group Ltd. (RE) reported the
first-quarter operating earnings of $5.88 per share, substantially
beating the Zacks Consensus Estimate of $4.32 per share. Earnings
were also up 31.3% year over year.
Aspen Insurance Holdings Limited’s (AHL)
first-quarter 2013 operating earnings per share of $1.06 per share
were a penny ahead of the Zacks Consensus Estimate and 20.5% above
the year-ago quarter earnings of 88 cents a share.
Our Take
Montpelier is well positioned to deliver robust numbers going
forward, given its increased exposure in the property catastrophe
lines of business. In addition, focusing on underwriting
operations, augmenting capital flexibility and strengthening its
competitive position augur well going forward. It also expanded
underwriting partnerships. Moreover, the company benefits from tax
exemptions in Bermuda.
Montpelier currently carries a Zacks Rank #1 (Strong Buy).
ASPEN INS HLDGS (AHL): Free Stock Analysis Report
MONTPELIER RE (MRH): Free Stock Analysis Report
EVEREST RE LTD (RE): Free Stock Analysis Report
RLI CORP (RLI): Free Stock Analysis Report
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