Bermuda-based PXRE Group Ltd. announced results for the second quarter ended June 30, 2004. Highlights for the quarter included:
* Net income increased 51% to $32.3 million from $21.5 million
* Net operating income per diluted common share was $1.21 compared
* Underwriting income was up 61%
* On a fully diluted basis, book value per share was $23.21 at
June 30, 2004
* Annualized return on equity was 22.4%
Jeffrey Radke, the president & CEO of PXRE Group, commented, “We are pleased with this quarter’s results. Our Cat & Risk business continues to perform exceptionally well in this attractive rate environment. The market continues to behave as we anticipated with only moderate rate reductions in peak zones. We have continued to increase our U.S. catastrophe and worldwide retrocessional books of business, as the returns offered at these rate levels remain attractive. Larger rate reductions occurred in some non-peak zones such as Latin America and Australia. We have taken appropriate steps, trimming exposure in those areas which no longer generate adequate returns on capital. Overall, we expect moderate growth for the full year in our Cat and Risk net premiums earned.
“During the quarter, we completed the re-focus of PXRE by exiting the Finite risk line of business. As a result, the Finite risk business is now included in our Exited Lines segment.
“PXRE is well positioned for the remainder of 2004 and 2005. We believe that PXRE’s disciplined underwriting skills, advanced technology, unequalled experience in trading through market cycles and long standing franchise will continue to produce attractive returns on equity, assuming normalized loss activity.”
As a result of a planned premium reduction in the company’s Exited Lines segment, revenue declined 20% for the second quarter of 2004 to $74.7 million from $93.8 million for the same period a year ago. Net premiums earned for the quarter decreased 17% to $69.6 million from $84.0 million for the year- earlier period. Net premiums earned in the company’s core Catastrophe and Risk Excess segment for the quarter were $66.2 million compared to $68.6 million for the year-earlier period.
Net premiums written decreased 12% to $51.2 million for the second quarter of 2004 from $58.0 million for the same period of 2003. The decrease reflects a planned reduction in the Exited Lines segment. Net premiums written in the company’s core Catastrophe and Risk Excess segment were $48.5 million compared to $53.1 million for the year-earlier period.
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