Transatlantic Holdings, Inc. reported that its net income for the year ended December 31, 2006 was $428.2 million, or $6.46 per common share (diluted), compared to $37.9 million, or $0.57 per common share (diluted), in 2005.
Net income for the fourth quarter of 2006 was $114.8 million, or $1.73 per common share (diluted), compared to $13.5 million, or $0.20 per common share (diluted), in the same prior year period of 2005. The full year and fourth quarter earnings in 2005 “include the after-tax impact of catastrophe costs totaling $354 million and $81 million, respectively,” the bulletin noted.
“Transatlantic finished 2006 on a high note, completing its most successful year ever,” commented president and CEO Robert F. Orlich. “We reported record net income and strong operating cash flow – further strengthening our foothold for the future. GAAP return on equity was 15.6 percent. The combination of a fundamentally solid underwriting environment and an absence of significant catastrophe losses was the key to the year’s results.
“Premium volume was up modestly for the year, driven by our domestic operations. Growth continues to be tempered by increased ceding company retentions in certain lines. Domestic rates in property catastrophe-exposed territories achieved strong increases during the year, while rates in most other classes, both domestic and foreign, were either flat or exhibited modest declines as the year came to a close. Importantly, market pricing overall remains disciplined, with reinsurance terms and conditions holding firm – reflecting, in part, greater market recognition of the capital requirements of reinsurance.
“We continued to expand our global footprint in recent months. Transatlantic opened a representative office in Panama to capitalize on the increased economic activity related to the Panama Canal expansion and the growing role of Panama as a commercial hub in Latin America. In addition, we have entered into an exclusive representative relationship in Stockholm, Sweden to expand our presence in the Nordic/Baltic reinsurance community.
“Transatlantic’s franchise is stronger now than ever – distinguished by its specialty class focus, truly global domain and commitment to reinsurance. We are optimistic about our prospects in 2007,” he concluded.
The full report and financial statements may be obtained on the web site of Transatlantic’s principal operating entity, Transatlantic Reinsurance Company, at: http://www.transre.com.
American International Group owns 59.26 percent of Transatlantic Holdings shares.
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