Montpelier Re continues to grow with collateralized reinsurance

by Artemis on October 28, 2014

Bermuda-based short-tail and specialty reinsurance firm Montpelier Re continues to benefit from and find synergies with its collateralized reinsurance operations, helping it to grow its net premiums written in Q3 2014 by 13% year-on-year.

Montpelier Re’s collateralized reinsurance operations, at its third-party reinsurance capital and fund management unit Blue Capital Management, are one of the reinsurers key growth channels, alongside its Montpelier at Lloyd’s unit.

Montpelier grew its net premiums written by 13% year-on-year thanks to growing contributions from its collateralized reinsurance unit Blue Capital and its Montpelier at Lloyd’s, which between them more than offset a decline in premiums at the Montpelier Bermuda base.

Losses during the quarter dampened earnings a little at Montpelier Re, with $20m from June 2014 catastrophe events and a quarterly loss ratio of 38%.

Christopher Harris, President and Chief Executive Officer, commented; “Our underwriting teams executed well in a competitive market environment during the third quarter, driving solid profitability with a 74% combined ratio. We are well positioned to navigate a challenging market by building on our strengths as a long-term partner for our investors and clients.”

Montpelier Re’s collateralized reinsurance operations contributed 13.5% of its total net premiums earned for the third-quarter of 2014.

The Blue Capital collateralized reinsurance operations provide Montpelier Re with a flexible capital base, allowing it to increasingly grow the contribution that third-party capital makes to its business. With more than $600m of assets under management at Blue Capital, it provides a substantial chunk of the reinsurers underwriting capability and enables Montpelier Re to counteract some of the impacts of the soft market environment at its other traditional units.

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