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Montpelier Re Holdings Ltd. Message Board

  • axpkocop axpkocop Feb 5, 2014 9:40 AM Flag

    2013 Year End Book Value Prediction?

    $29/share is my guess.

    Last quarter--"Fully converted book value per common share was $28.06, an increase of 4.2% from June 30, 2013 and 8.7% from December 31, 2012, after taking into account common share dividends declared during the period.

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    • So I'm trying to understand the reinsurance business. Suppose we have some hurricane this fall. Book value is $29/share. Couldn't such an event #$%$ a quarter billion in book value? How can it be quantified?

      • 1 Reply to besterman2013
      • In 2005 MRH took a huge loss to book value due to hurricanes and as a result they changed their underwriting parameters so as to take on less risk and also earn less. They really haven't been tested since making these changes in 2005.

        "The 2005 Atlantic hurricane season was the most active Atlantic hurricane season in recorded history, shattering numerous records. The impact of the season was widespread and ruinous with an estimated 3,913 deaths and record damage of about $159.2 billion. Of the storms that made landfall, five of the season's seven major hurricanes—Dennis, Emily, Katrina, Rita, and Wilma—were responsible for most of the destruction. The Mexican states of Quintana Roo and Yucatán and the US states of Florida and Louisiana were each struck twice by major hurricanes; Cuba, the Bahamas, Haiti, Mississippi, Texas, and Tamaulipas were each struck once and in each case brushed by at least one more. The most catastrophic effects of the season were felt on the United States' Gulf Coast, where a 30 ft (10 m) storm surge from Hurricane Katrina caused devastating flooding that inundated New Orleans, Louisiana and destroyed most structures on the Mississippi coastline; and in Guatemala, where Hurricane Stan combined with an extratropical system to cause deadly mudslides."

    • Fully converted book value per common share was $29.42, an increase of 5.3% for the fourth quarter and an increase of 14.3% for the full year, each computed after taking into account common share dividends declared.

      Operating income for the quarter was $90 million, or $1.78 per common share, representing a quarterly return on common equity of 6.2%. Net income was $73 million, or $1.44 per common share. Net income for the quarter includes $2 million of realized and unrealized investment gains, $11 million of net foreign exchange losses and an $8 million one-time expense relating to the initial public offering of the Company’s newly-formed collateralized property reinsurance affiliate, Blue Capital Reinsurance Holdings Ltd. (NYSE:BCRH).

      Net premiums written and earned in the quarter were largely consistent with those of a year ago, when adjusting for reinstatement premiums recorded from windstorm Sandy in the fourth quarter of 2012. The loss ratio for the quarter was 2%, which includes $42 million of favorable prior year loss reserve movements. The combined ratio was 39% for the quarter.

      Net investment income was $14 million and the total return on the investment portfolio was 0.50% for the quarter.

      Wow!

      • 1 Reply to axpkocop
      • During the fourth quarter of 2013, the Company repurchased a total of 827,558 common shares at an average price of $27.57 per share. During the first quarter of 2014, the Company has thus far repurchased an additional 1,246,700 shares, at an average price per share of $28.07.

        They now have less than 50 million shares outstanding.

        When does Berkshire, White Mountain or some other insurance company buy this firm out? Regardless, new highs will be coming soon.

    • Bought some for a trade at 26.69/share. Hoping to make $1/share and I'll sell 95% of these shares and hold the rest long-term.

 
MRH
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