Transatlantic Holdings, Inc. reported that its net income for 2003 increased 79.3 percent to $303.6 million, or $5.75 per common share (diluted), compared to $169.3 million, or $3.21 per common share (diluted), in 2002. Net income for the fourth quarter of 2003 increased to $84.9 million, or $1.61 per common share (diluted), compared to a net loss of ($6.4) million, or ($0.12) per common share (diluted), in the same prior year period.
The bulletin noted that “Net income for 2002 includes a fourth quarter 2002 charge related to an increase in net loss reserves of $100 million, or $65.0 million, net of tax.” The charge impacted 2002 fourth quarter earnings.
“Strong fourth quarter results capped a record year in 2003 for Transatlantic,” commented President and CEO Robert F. Orlich. “Each of our major geographic areas contributed significantly to the all-time highs reached in net income, net premiums written and operating cash flow. We expect worldwide market conditions to remain favorable in 2004 — with customers continuing to emphasize a strong bias towards reinsurers, like Transatlantic, that are stable, consistent in their approach, and that earn superior financial strength ratings.”
For 2003, income before income taxes amounted to $386.7 million versus $188.3 million in 2002. Income before income taxes in 2002 includes pre-tax losses of $100 million related to a fourth quarter increase in net loss reserves associated with losses principally occurring between 1998 and 2000 in certain casualty lines. Also included in the years’ results are pre-tax realized capital gains (losses) of $9.9 million and ($6.0) million in 2003 and 2002, respectively.
For the fourth quarter of 2003, income before income taxes increased to $105.6 million versus a loss before income taxes of ($32.3) million in the fourth quarter of 2002. The fourth quarter 2002 loss before income taxes includes pre-tax losses of $100 million as discussed in the paragraph immediately above. Also included in the quarters’ results are pre-tax realized capital gains (losses) of $3.2 million and ($6.3) million for the fourth quarters of 2003 and 2002, respectively.
Net premiums written for 2003 increased 33.6 percent to $3.34 billion from $2.50 billion reported in the prior year. For the fourth quarter of 2003, net premiums written increased 32.2 percent to $868.9 million from $657.4 million in the same prior year period. International business represented 44.9 percent of net premiums written for 2003 versus 45.5 percent for 2002. For 2003, the combined ratio was 96.5 versus 102.3 for the prior year. For the fourth quarter of 2003, the combined ratio was 96.0 versus 114.0 in the comparable year ago period.
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