Bermuda’s Quanta Capital Holdings Ltd. reported that its net loss for the fourth quarter of 2004 was $14.4 million, or $0.25 per diluted share. This compares to a net loss of $37.4 million, or $0.66 per diluted share, for the third quarter of 2004 and a net loss of $15.1 million, or $0.27 per share for the fourth quarter of 2003. The net loss for the full year ended December 31, 2004 was $54.6 million, or $0.96 per share.
The net loss excluding net realized losses on investments for the fourth quarter of 2004 was $14.0 million or $0.25 per share. This compares to a net loss excluding net realized gains on investments of $37.7 million, or $0.66 per diluted share, for the third quarter of 2004.
The Company said its fourth quarter results were “negatively impacted by $21.3 million of windstorm catastrophe costs, principally related to the four hurricanes that hit the Southeast United States during the third quarter of 2004, which was in addition to the windstorm catastrophe costs reported in the third quarter.”
CEO Tobey J. Russ commented “We are disappointed by the results of the fourth quarter and the additional loss reserves resulting from the third quarter catastrophes. We believe that our decision to lead with reinsurance in 2004 and the unprecedented series of natural disasters that followed have overshadowed the real progress that we made toward the building of our specialty lines business.”
The bulletin noted that during the fourth quarter Quanta “expanded its European business by establishing a new specialty lines syndicate at Lloyd’s, Syndicate 4000. Syndicate 4000 commenced underwriting in December 2004 and offers a portfolio of specialty insurance products.”
Other highlights in the report included the following:
— Gross premiums written for the fourth quarter of 2004 were $124.0 million; net premiums written were $107.1 million, compared to $116.7 million and $86.0 million in the third quarter of 2004.
— For the fourth quarter, specialty reinsurance contributed $56.7 million of the net premiums written, specialty insurance contributed $47.8 million of the net premiums written and our new Lloyd’s syndicate contributed $2.6 million of the net premiums written.
— Net premiums earned in the fourth quarter were $87.5 million, compared to $65.5 million for the third quarter of 2004.
— Technical services revenues for the fourth quarter 2004 were $9.9 million compared to technical services revenues of $7.7 million for the third quarter of 2004.
— Net income for the fourth quarter prior to the additional windstorm catastrophe costs was $6.9 million, or $0.12 per diluted share.
— Net income for full year 2004 prior to total windstorm catastrophe related losses of $67.6 million was $13.0 million, or $0.23 per diluted share.
The Company noted that it “was formed in 2003 and commenced its insurance business in the fourth quarter of 2003. Accordingly, there is no meaningful comparative information for the full year of 2003.”
For the full year 2004, net premiums written were $419.5 million and net premiums earned were $237.1 million. Total revenues for 2004 were $287.2 million, including $32.5 million of technical service revenues and $14.3 million of investment income.
“Nevertheless, we concluded the fourth quarter with over $670 million of cash and investments. A.M. Best has affirmed the company’s rating of ‘A-‘ (excellent) and we have announced the expansion of our European business through the establishment of a new Specialty Lines Syndicate at Lloyd’s,” Russ continued. “We believe Quanta is well positioned to execute its specialty lines strategy in 2005.”
Quanta will host a conference call to discuss fourth quarter results at 9:00 a.m. Eastern Time on Tuesday, March 15, 2005. A live webcast of this call will be available at www.quantaholdings.com and will be archived on Quanta’s website. A telephone replay of the conference call also will be available beginning on March 15, 2005 at 11:00 a.m. Eastern Time, until March 22, 2005. To access the replay, domestic callers should dial 888-286-8010 and international callers should dial 617-801-6888. All callers should provide pass code #66581120.
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