Transatlantic Holdings Notes Q3 Net Income Increased 31.8 Percent

Transatlantic Holdings, Inc. reported that its net income for the third quarter of 2003 increased 31.8 percent to $80.8 million, or $1.53 per common share (diluted), compared to $61.3 million, or $1.16 per common share (diluted), in the 2002 third quarter.

Net income for the first nine months of 2003 increased 24.5 percent to $218.8 million, or $4.15 per common share (diluted), compared to $175.7 million, or $3.33 per common share (diluted), in the same prior year period.

Commenting on the quarter, Robert Orlich, president and CEO, said, “We are pleased with our strong year-over-year earnings growth which resulted from record quarterly premiums coupled with a significantly improved combined ratio. Transatlantic continues to benefit from reinsurance buyers’ desire to partner with the most financially able. While we expect market conditions to remain strong for the foreseeable future – with greater strength exhibited in our core specialty casualty areas – the exercise of underwriting discipline must remain in sharp focus.”

Income before income taxes amounted to $105.4 million in the third quarter of 2003 versus $76.5 million in the third quarter of 2002, an increase of 37.8 percent. Included in these results are pre-tax realized capital gains of $5.5 million and $1.9 million in the third quarters of 2003 and 2002, respectively.

For the first nine months of 2003, income before income taxes increased 27.4 percent to $281.0 million versus $220.7 million in the first nine months of 2002. Included in these results are pre-tax realized capital gains of $6.8 million and $0.4 million for the first nine months of 2003 and 2002, respectively.

Net premiums written for the third quarter of 2003 increased 31.1 percent to $901.3 million from $687.2 million reported in the same prior year quarter. For the first nine months of 2003, net premiums written increased 34.2 percent to $2,472.2 million from $1,842.8 million in the same prior year period. International business represented 44.4 percent of net premiums written for the first nine months of 2003 versus 45.5 percent for the first nine months of 2002.

The combined ratio for the third quarter of 2003 was 96.2 versus 98.0 in the comparable 2002 period. For the first nine months of 2003, the combined ratio was 96.6 versus 98.1 in the comparable year ago period. TRH’s combined ratio represents the sum of the ratio of net losses and loss adjustment expenses divided by net premiums earned (loss and loss adjustment expense ratio) and the ratio of the sum of net commissions and other operating expenses divided by net premiums written (underwriting expense ratio). Net loss and loss adjustment expense reserves (which represents unpaid losses and loss adjustment expenses, net of reinsurance recoverable thereon) rose $112.4 million during the 2003 third quarter, bringing the amount of such reserves to $3.7 billion at Sept. 30, 2003.

Net investment income for the third quarter of 2003 totaled $68.5 million, an increase of 7.9 percent over $63.5 million reported in the same prior year quarter. For the first nine months of 2003, net investment income totaled $201.6 million, an increase of 6.2 percent over $189.9 million reported in the comparable year ago period. At Sept. 30, 2003, investments and cash totaled $6.4 billion.