Bermuda-based Companies Second Quarter Earnings Reports

A number of Bermuda-based companies have released their second quarter earnings reports, as follows:

RenaissanceRe Holdings Ltd. reported $159.9 million in second quarter operating income available to common shareholders compared to $194.7 million in the second quarter of 2007, an 18 percent decline.
Operating income, which excludes net realized investment losses of $24.2 million and $11.6 million in the second quarters of 2008 and 2007, respectively was $2.50 per diluted common share in Q2 2008, compared to $2.69 in the second quarter of 2007. Net income available to common shareholders was $135.7 million or $2.13 per diluted common share in the quarter, compared to net income available to common shareholders of $183.2 million or $2.53 per diluted common share for the same quarter of 2007.
The Company reported an annualized operating return on average common equity of 23.4 percent and an annualized return on average common equity of 19.9 percent in the second quarter of 2008, compared to 28.5 percent and 26.8 percent, respectively, in the second quarter of 2007. Tangible book value per common share increased to $42.14 at June 30, 2008, a 0.2 percent increase in the second quarter of 2008, compared to a 6.0 percent increase in the second quarter of 2007. Book value per common share increased to $43.32 at June 30, 2008, a 2.8 percent increase in the second quarter of 2008, compared to a 5.9 percent increase in the second quarter of 2007.
CEO Neill A. Currie commented: “I am pleased to report another solid quarter with an annualized operating ROE of over 23 percent. We generated strong underwriting profits and had a successful June 1st renewal season. We are pleased with our portfolio of risks, despite softening market conditions and a challenging investment environment.”
For the full report and a replay of the earnings conference call go to: http://www.renre.com.

PartnerRe Ltd. reported a net loss of $26.0 million, or $0.64 per share on a fully diluted basis for the second quarter of 2008. The loss includes net after-tax realized and unrealized losses on investments of $219.1 million, or $4.04 per share. During the second quarter of 2008, the Company realized $7.8 million in pre-tax losses on sales of securities. Separately, the value of the Company’s $12 billion investment portfolio declined by $288.5 million on pre-tax unrealized losses primarily due to the increase in interest rates during the quarter.
Net income for the second quarter of 2007 was $105.0 million, or $1.66 per share, including net after-tax realized losses on investments of $42.8 million, or $0.74 per share. “Comparable numbers for 2007 do not include the impact of FAS 159 [an accounting rule, which the Company adopted, that requires calculating the market value of securities].
Operating earnings, which exclude capital gains/losses, for the second quarter of 2008 were $183.8 million, or $3.39 per share on a fully diluted basis. This compares to operating earnings of $136.0 million, or $2.34 per share, for the second quarter of 2007.
PartnerRe President & CEO Patrick Thiele commented: “Despite a softening reinsurance market and turmoil in the capital markets, PartnerRe had a strong second quarter and first half of 2008. Adoption of FAS 159 for all of our investment portfolio means that we will have considerable volatility in our quarterly reported net income. However, on the measures that clearly define fundamental performance — operating return on equity and growth in book value per share — we continue to perform well.
During the first half of 2008, we had 6 percent growth in operating earnings per share, annualized operating ROE of 15.5 percent, as well as growth in fully diluted book value per share of 3 percent. Over the last twelve months, our book value per share grew by 19 percent. On both measures, we continue to exceed our long term targets of 10 percent growth in book value and per share, and 13 percent operating ROE over the cycle.”
For the full report and a replay of the earnings conference call go to: http://www.partnerre.com.

Endurance Specialty Holdings Ltd. reported net income of $103.3 million and $1.56 per diluted common share for the second quarter of 2008 versus net income of $135.3 million and $1.85 per diluted common share in the second quarter of 2007.
For the six months ended June 30, 2008, net income was $181.1 million and $2.70 per diluted common share versus net income of $237.2 million and $3.22 per diluted common share for the six months ended June 30, 2007.
Operating highlights for the quarter ended June 30, 2008 were as follows:
— Gross premiums written of $518.1 million, an increase of 2.2 percent over the same period in 2007;
— Ceded premiums of $48.7 million versus $58.6 million in the second quarter of 2007;
— Combined ratio of 89.0 percent, which included 12.4 percentage points of favorable prior year loss reserve development;
— Net investment income of $60.5 million, a decrease of $18.1 million over the same period in 2007;
— Operating income, which excludes after-tax realized investment gains and losses and foreign exchange gains and losses, of $102.7 million and $1.55 per diluted common share; and
— Operating return on average common equity for the quarter of 4.2 percent, or 16.9 percent on an annualized basis.
Operating highlights for the six months ended June 30, 2008 were as follows:
— Gross premiums written of $1.3867 billion, an increase of 28.4 percent over the same period in 2007;
— Ceded premiums of $276.5 million versus $98.2 million in the first half of 2007;
— Combined ratio of 86.9 percent, which included 11.8 percentage points of favorable prior year loss reserve development;
— Net investment income of $107.4 million, a decrease of $46.0 million over the same period in 2007;
— Operating income, which excludes after-tax realized investment gains and losses and foreign exchange gains and losses, of $192.2 million and $2.87 per diluted common share;
— Operating return on average common equity for the first half of the year of 7.9 percent, or 15.9 percent on an annualized basis; and
— Book value of $36.72 per diluted common share, up 4.8 percent from December 31, 2007.
Chairman and CEO Kenneth J. LeStrange commented; “Endurance produced another quarter of strong core earnings in the midst of increasing competition in the insurance and reinsurance markets and continued volatility in the financial markets, as well as increased levels of U.S. catastrophes and adverse crop growing conditions in many parts of the Midwestern United States. Our second quarter performance in spite of these obstacles is a testament to the quality of Endurance’s strategy of diversification and the effectiveness of Endurance’s underwriting, risk control and capital management.”
For the full report and a replay of the earnings conference call go to: http://www.endurance.bm.

Aspen Insurance Holdings Limited reported net income for the second quarter of 2008 of $126.9 million or diluted earnings per share of $1.44, an increase of 26.3 percent over the same quarter last year. The combined ratio was 78.2 percent, comparing favorably to 88.4 percent in the same quarter last year. Annualized operating return on equity was 21.2 percent, an increase of 1.5 percentage points compared with the second quarter of 2007. Book value per share increased 22.1 percent to $29.84 when compared to the second quarter of 2007.
CEO Chris O’Kane commented: “Aspen had a strong quarter and delivered results ahead of our expectations including net income of $126.9 million, operating ROE of 21.2 percent, EPS of $1.44 and a combined ratio of 78.2 percent. Our solid underwriting performance demonstrates our well diversified portfolio and stringent risk selection criteria.”
For the full report and a replay of the earnings conference call go to: http://www.aspen.bm.

Arch Capital Group Ltd. reported that net income available to common shareholders for the 2008 second quarter was $192.3 million, or $2.92 per share, compared to $199.4 million, or $2.65 per share, for the 2007 second quarter, and $381.7 million, or $5.71 per share, for the six months ended June 30, 2008, compared to $397.9 million, or $5.24 per share, for the 2007 period.
The Company also reported after-tax operating income available to common shareholders of $185.4 million, or $2.82 per share, for the 2008 second quarter, compared to $205.6 million, or $2.73 per share, for the 2007 second quarter, and $387.4 million, or $5.79 per share, for the six months ended June 30, 2008, compared to $410.4 million, or $5.40 per share, for the 2007 period.
The Company’s book value per common share, including the net effect of share repurchases, increased to $57.49 at June 30, 2008 from $56.92 per share at March 31, 2008. The Company’s after-tax operating income available to common shareholders represented a 20.5 percent annualized return on average common equity for the 2008 second quarter, compared to 24.1 percent for the 2007 second quarter, and 21.3 percent for the six months ended June 30, 2008, compared to 24.7 percent for the 2007 period.
For the full report and a replay of the earnings conference call go to: http://www.archcapgroup.bm.

Sources as indicated