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Montpelier Re Holdings Ltd. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 4, 2011 09:56AM

Montpelier Re Holdings Ltd. (MRH) filed Quarterly Report for the period ended 2011-09-30. Montpelier Re Holdings Ltd. has a market cap of $1.08 billion; its shares were traded at around $17.61 with and P/S ratio of 1.5. The dividend yield of Montpelier Re Holdings Ltd. stocks is 2.4%.



Highlight of Business Operations:

Sales of investments totaled $1,928.4 million and $865.9 million for the nine month periods ended September 30, 2011 and 2010, respectively. Maturities, calls and paydowns of investments totaled $329.0 million and $994.4 million for the nine month periods ended September 30, 2011 and 2010, respectively. There were no non-cash exchanges or involuntary sales of investment securities during these periods.

Profit commissions, which are paid by assuming companies to ceding companies in the event of a favorable loss experience, change as our estimates of loss and LAE fluctuate. Increases in profit commissions, which are accrued based on the estimated results of the subject contract, totaled $0.6 million and zero for the third quarters of 2011 and 2010, respectively, and $2.1 million and $1.1 million for the first nine months of 2011 and 2010, respectively. Relatively few of our assumed reinsurance contracts contain profit commission clauses and the terms of these profit commissions are specific to the individual contracts and vary as a percentage of the contract results.

Montpelier Bermuda’s acquisition cost ratio for the three month and nine month periods ended September 30 2011, inclusive and exclusive of profit commission expense, increased as compared to the comparable 2010 periods primarily as a result of an increase in ceded premium earned. Although ceding commissions on ceded reinsurance represent revenue to Montpelier Bermuda, the ceding commission ratio on reinsurance ceded during 2011 was lower than the acquisition cost ratio of gross premium written. As a result, the increase in ceded premium earned led to an increase in the net acquisition cost ratio.

Profit commissions, which are paid by assuming companies to ceding companies in the event of a favorable loss experience, change as Montpelier Syndicate 5151’s estimates of loss and LAE fluctuate. Increases in profit commissions, which are accrued based on the estimated results of the subject contract, totaled $0.8 million and $0.2 million for the three month periods ended September 30, 2011 and 2010, respectively, and $2.0 million and $0.9 million for the first nine months of 2011 and 2010, respectively.

Our other revenue is comprised of: (i) services provided to third parties consisting of commissions earned by PUAL and advisory fees and royalties earned from providing catastrophe modeling services and technology to third parties; and (ii) interest on funds advanced to ceding companies to cover losses in accordance with contract terms. The following table summarizes our other revenue for the three and nine month periods ended September 30, 2011 and 2010:

Read the The complete Report



Stocks Discussed: MRH,
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