In its first quarter as a public company (See IJ web site March 26) CastlePoint Holdings, reported net income for the first quarter of 2007 of approximately $7.1 million, or diluted earnings per share of $0.23 for the first quarter of 2007 as compared to $(0.29) per share for the same period in 2006.
“Key Highlights” cited in the earnings report included the following:
— Net premiums written for the quarter were $72.0 million, compared to zero in the prior year period.
— 28 percent of total written premiums generated from clients other than operating subsidiaries of Tower Group, Inc., CastlePoint’s sponsor.
— Consolidated combined ratio was 93.7 percent.
— Shareholders’ equity increased by $121.3 million including $114 million of net proceeds to us from successful completion of IPO.
— Total revenues were $54.0 million in the first quarter of 2007. Net premiums earned represented 64.8 percent of net premiums written for the three months ended March 31, 2007.
CEO Michael H. Lee commented: “This was our first quarter as a public company and our fourth quarter since our inception in April 2006. With $72.0 million in net premiums written including 28 percent of net premiums written in the quarter from clients other than Tower [the Group is the majority shareholder of CastlePoint Re and has an 8.6 percent stake in CastlePoint Holdings], we are pleased that our reinsurance, risk sharing, and programs solutions are continuing to find excellent reception in the marketplace.
“Our consolidated combined ratio of 93.7 percent reflects continued excellent underlying loss ratios from Tower, our largest customer, as well as continued reduction in our overall expense ratio as our business has expanded. The substantial increase in business from clients other than Tower also demonstrates our success in marketing our unique risk sharing and other reinsurance and insurance solutions.”
Outlining the future, CastlePoint said it believes “our business strategies and platform position us very well to continue to grow. In addition, we expect that our net income and return on equity will increase, as agreements we have already executed both with Tower and other clients become earned premiums and as our invested assets continue to grow relative to our shareholders’ equity.
“For the second quarter of 2007, we project net income to increase to a range between $9.0 million and $11.0 million. We project CastlePoint’s diluted earnings per share in the second quarter to be in the range between $0.24 and $0.27 per diluted share. For the full year, we anticipate diluted earnings per share to be between $1.10 and $1.20.”
The full report and additional comments may be obtained on the Group’s web site at: http://www.castlepoint.bm.
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