NU Online News Service, July 27, 1:35 p.m. EDT
New York-based reinsurance company Transatlantic Holdings Inc. said its second-quarter drop in net income was primarily the result of catastrophe losses, the bulk of which was related to the Deepwater Horizon oil rig incident.
Transatlantic reported second-quarter net income dropped close to 2 percent, or $1.8 million, to $111 million. Net income per share stood at $1.70 a share.
Revenues dropped 1.5 percent, or $16 million, to $1.1 billion as net premiums written were down 6 percent, or $59 million, to $948 million. The combined ratio for the period rose 3.5 points to 96.9.
The second quarter was impacted by $27 million of pre-tax net costs "related to significant catastrophe events that included $14 million from the Deepwater Horizon explosion. Additional loss cost events included the earthquake in Chile.
Transatlantic said the catastrophe costs were insignificant.
"Transatlantic performed well in the quarter," said Robert F. Orlich, president and chief executive officer, in a statement.
"In this challenging market environment, we continue to pursue favorable opportunities in segments that coincide with our traditional strengths, while fine-tuning our book to emphasize business that meets our margin requirements," he said.
For the first half of the year, Transatlantic said net income dropped 33 percent, or $61 million, to more than $126 million. Net income per share dropped 92 cents to $1.92.
Revenues rose more than 2 percent, or $51 million, to $2.2 billion despite a drop in net premium written of 4 percent, or $80 million, to $1.97 billion. The combined ratio for the first half of the year rose 7.5 points to 101.8.
Pre-tax catastrophe costs for the six months stood at $157 million but were partially offset by a tax benefit of $40 million. This compares to a minimal amount of catastrophe costs in the first half of 2009, the company noted.
Transatlantic said the pre-tax catastrophe costs generate tax benefits totaling 35 percent over the full year.
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