Bermuda’s Max Capital Group Ltd. increased its gross premiums written by over 30 percent from $213.6 million to $306.6 million in the first quarter of 2008. Unfortunately, that wasn’t sufficient to escape the credit crunch that has affected most of the re/insurance industry in the first quarter (See IJ web site – https://www.insurancejournal.com/news/international/2008/05/05/89680.htm).
Max Capital reported Q1 net income $7.749 million, or $0.13 per fully diluted share, versus net income of $79.993 million, or $1.24 per fully diluted share, for the three months ended March 31, 2007. Net operating income, which excludes net realized gains/losses, for the period was $6.3 million, or $0.11 per fully diluted share, versus net operating income of $81.0 million, or $1.26 per fully diluted share, for the three months ended March 31, 2007.
The earnings announcement noted that the Company had warned on April 18 that it “expected the return on its alternative investments for the first quarter of 2008 to be negative 2.11 percent, and that the impact of the unrealized mark-to-market losses on its alternative investment portfolio in the first quarter, as compared to the Company’s targeted 2 percent quarterly return, was expected to be a decrease of approximately $0.83 in earnings per diluted share.”
Chairman and CEO Marston (Marty) Becker commented: “Max had another good underwriting quarter from all property and casualty units. Our gross written premium growth in the quarter was directly related to some of our 2007 initiatives. Max Specialty continues to develop well and our addition of agricultural reinsurance expertise was timely given the escalating prices in the commodity markets.
“As we indicated on April 18th our alternative investment results were below our quarterly target but better than comparable indexes. Given the market volatility in the first quarter, we believe these results highlight the measured volatility of this asset class, which has been a strong annual contributor to Max’s book value growth.”
The full report, as well as a replay of the earnings conference call is available on the Company’s web site at: http://www.maxcapgroup.com.
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