Earnings Recap: ACE, Arch, Everest Re, Montpelier Re, PartnerRe, Transatlantic Re, Willis

A number of international companies have recently published their earnings results for the third quarter of 2007 and the first nine months of the year. Highlights of these reports – in alphabetical order – are as follows. For the complete report and means of access to analysts’ and investors’ conference calls go to the particular organization’s web site, as listed.

ACE Limited reported net income for the third quarter ended September 30, 2007, of $1.95 per ordinary share after payment of preferred dividends, compared with net income of $1.73 per share for the same quarter last year. Income excluding net realized gains (losses) was $2.06 per share, compared with $1.96 per share for the same quarter of last year. Book value increased $851 million in the quarter.
Net income for the first nine months of 2007 increased 22 percent to $5.98 per share, compared with $4.92 per share for the first nine months of 2006. For the first nine months of 2007, income excluding net realized gains (losses) and cumulative effect increased 18 percent to $6.02 per share, compared with $5.13 per share for the same period of 2006. (1) Book value increased $1.7 billion or 12 percent for the first nine months of 2007.
ACE Chairmand and CEO Evan Greenberg commented: “We had another excellent quarter, marked by strong earnings and book value growth. It was a particularly strong quarter given the record-breaking results of the third quarter last year. Year-to-date, operating and net income were up more than 18 percent and 22 percent, respectively, and book value has increased 12 percent or nearly $2 billion. ACE’s global reach, product breadth and underwriting insight are competitive advantages that enable us to take advantage of profitable opportunities around the world while we shrink those areas where prices and terms do not meet our standards.”

Source: ACE – www.acelimited.com
Arch Capital Group Ltd. reported that net income available to common shareholders for the 2007 third quarter was $199.7 million, or $2.76 per share, compared to $185.8 million, or $2.44 per share, for the 2006 third quarter, and $597.7 million, or $8.00 per share, for the nine months ended September 30, 2007, compared to $453.3 million, or $5.96 per share, for the 2006 period.
The Company also reported after-tax operating income available to common shareholders of $209.3 million, or $2.89 per share, for the 2007 third quarter, compared to $200.1 million, or $2.62 per share, for the 2006 third quarter, and $625.7 million, or $8.37 per share, for the nine months ended September 30, 2007, compared to $514.2 million, or $6.76 per share, for the 2006 period.

Source: Arch – http://www.archcapgroup.bm
Everest Re Group, Ltd. reported third quarter after-tax operating income, which excludes realized capital gains and losses, of $232.5 million, slightly below the $240.2 million reported for the third quarter of last year. After-tax operating income per fully diluted share was $3.68 for both periods.
Net income, including net realized capital gains and losses, was $246.6 million for the third quarter of 2007, up slightly from $245.7 million for the third quarter of 2006. Net income per diluted share grew by 4 percent to $3.90 in this year’s third quarter from $3.76 in the third quarter of 2006.
For the nine months ended September 30, 2007, after-tax operating income was $713.7 million compared to $616.8 million for the nine months ended September 30, 2006. On a per diluted share basis, net operating income was $11.19, an increase of 19 percent from $9.44 for the nine months ended September 30, 2006. Net income, including realized capital gains and losses was $827.0 million in the first nine months of 2007, or $12.96 per diluted share compared to $634.5 million or $9.71 per diluted share, for the first nine months of 2006, a per share increase of 33 percent.

Source: Everest Re – http://ir.everestre.com
Montpelier Re Holdings Ltd. reported a fully converted book value per share of $17.03 as at September 30, 2007, an increase of 6.6 percent for the quarter inclusive of dividends. Comprehensive income for the quarter ended September 30, 2007 was $102.0 million, or $1.07 per diluted common share. Operating income, which excludes foreign exchange, investment gains and losses and income tax, was $78.3 million, or $0.82 per diluted common share.
The loss ratio for the quarter was 26.8 percent, which includes $11.4 million, or 8.2 points, of losses incurred as a result of the UK floods in July. This was offset in part by net favorable prior year reserve development of $4.6 million, or 3.3 points.
At September 30, 2007, the Company held $19.0 million of securities with exposure to the sub-prime mortgage market with an estimated weighted average life of 1.9 years and $63.7 million of securities with exposure to the Alternative-A mortgage market with an estimated weighted average life of 3.4 years. All of these securities are currently rated AAA and are carried at fair value.
Chairman and CEO Anthony Taylor commented: “This was a strong quarter resulting in a 6.6 percent increase in book value per share. Since the beginning of 2006, we have grown book value per share by over 48 percent, inclusive of dividends.”

Source: Montpelier Re – www.montpelierre.bm
PartnerRe Ltd. reported net income of $262.9 million, or $4.44 per share on a fully diluted basis, for the third quarter of 2007. This net income includes a net charge of $19.9 million or $0.34 per share in net after-tax realized gains on investments, and losses from the Company’s interest in the results of equity investments. Net income for the third quarter of 2006 was $235.8 million or $3.93 per share, including net after-tax realized gains on investments, and earnings from the Company’s interest in the results of equity investments totaling $25.4 million or $0.44 per share.
Operating earnings for the third quarter of 2007 were $274.2 million or $4.78 per share on a fully diluted basis. This compares to operating earnings of $201.8 million, or $3.49 per share, for the third quarter of 2006. Operating earnings exclude net after-tax realized investment gains/losses, and interest in earnings/losses of equity investments, and are calculated after payment of preferred dividends. All references to per share amounts are on a fully diluted basis.
Commenting on the third quarter and nine month 2007 results, PartnerRe President & CEO Patrick Thiele stated: “PartnerRe’s third quarter results set new records in several metrics including earned premium, operating earnings, and earnings per share. A continuing low level of incurred losses combined with a seasonally high level of earned premium resulted in an annualized operating return on beginning shareholders’ equity of 34 percent and 10 percent growth in GAAP book value per share in the quarter. For the nine months, we achieved a 23 percent annualized operating return on beginning shareholders’ equity and 16 percent growth in GAAP book value per share.”

Source: PartnerRe – www.partnere.com
Transatlantic Holdings, Inc. reported that its net income for the third quarter of 2007 increased 32.5 percent to $141.7 million, or $2.12 per common share (diluted), compared to $106.9 million, or $1.61 per common share (diluted), in the third quarter of 2006. Net income for the first nine months of 2007 increased 19.6 percent to $374.6 million, or $5.62 per common share (diluted), compared to $313.4 million, or $4.73 per common share (diluted), in the first nine months of 2006.

Source: Transatlantic Re – www.transre.com
Willis Group Holdings Limited reported net income for the quarter ended September 30, 2007 was $67 million, or $0.46 per diluted share, compared with $89 million, or $0.56 per diluted share, a year ago. The results for the quarter ended September 30, 2006 were affected by a $91 million net of tax gain on the sale of the Company’ s London headquarters and significant expenditure on 2006 Shaping our Future initiatives.
Total reported revenues for the quarter ended September 30, 2007 rose 6 percent to $574 million compared to $543 million in the third quarter 2006. The effect of foreign currency translation increased reported revenues by 2 percent and net acquisitions had a positive impact of 1 percent on reported revenues.
Reported net income for the nine months ended September 30, 2007 was $314 million, or $2.12 per diluted share, compared with $301 million, or $1.89 per diluted share a year ago. The results for the nine months ended September 30, 2006 were significantly affected by a $91million net of tax gain on the sale of the Company’s London headquarters and significant expenditure on 2006 Shaping our Future initiatives. Excluding those items, reported (and adjusted) net income for the nine months ended September 30, 2007 was $314 million compared with adjusted net income of $269 million a year ago, an increase of 17 percent.
Joe Plumeri, Chairman and CEO, commented: “Our results this quarter once again illustrate the continued execution of our Shaping our Future strategy for profitable growth,” said “We have delivered yet another quarter with strong new business-driven top line growth in a soft rate environment, operating margin expansion and earnings growth.”

Source: Willis – www.willis.com