Max Re Capital Reports Record Net Income for 2006.HAMILTON, Bermuda -- Max Re Capital Ltd. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : MXRE; BSX BSX Bermuda Stock Exchange BSX Bandai Satellaview-X BSX Bicycle Super-X (Cross) : MXRE BH) today reported net income for the three months ended December 31, 2006, of $95.4 million, or $1.51 per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, versus a net loss of $12.6 million, or $0.22 per fully diluted share, for the three months ended December 31, 2005. Net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , which represents net income adjusted for net realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. and losses on sales of fixed maturities, for the three months ended December 31, 2006, was $93.9 million, or $1.49 per fully diluted share, versus a net operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $9.0 million, or $0.16 per fully diluted share, for the three months ended December 31, 2005. For the year ended December 31, 2006, the Company had net income of $216.9 million, or $3.43 per fully diluted share, compared to $9.5 million, or $0.18 per fully diluted share, for the year ended December 31, 2005. For the year ended December 31, 2006, the Company had net operating income of $222.7 million, or $3.52 per fully diluted share, compared to $10.2 million, or $0.19 per fully diluted share, for the year ended December 31, 2005. W. Marston Becker, Chairman and Chief Executive Officer of Max Re Capital, said: "Our success in 2006 is largely attributable to our employees' combined energies and discipline, which produced strong underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. performance across all of our business units. Our balanced specialty insurance and reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. focus together with good investment returns produced a year of record earnings and our fourth consecutive year of net profits. With the pending establishment of our U.S. platform, we will be well-positioned to continue our success in 2007." Gross premiums written When a non-life insurance company closes a contract to provide insurance against loss, the revenues (premiums) expected to be received over the life of the contract are called gross premiums written. for the three months ended December 31, 2006, were $147.5 million, of which $146.6 million came from property and casualty underwriting and $0.9 million from life and annuity annuity: see insurance. annuity Payment made at a fixed interval. A common example is the payment received by retirees from their pension plan. There are two main classes of annuities: annuities certain and contingent annuities. underwriting, compared to $257.2 million, of which $251.3 million came from property and casualty underwriting and $5.9 million came from life and annuity underwriting, for the three months ended December 31, 2005. Net premiums earned for the three months ended December 31, 2006, were $159.0 million versus $256.7 million for the same period of 2005. Gross premiums written for the year ended December 31, 2006, were $865.2 million versus $1,246.0 million for the year ended December 31, 2005. Property and casualty reinsurance, property and casualty insurance and life and annuity reinsurance accounted for 49 percent, 46 percent and 5 percent, respectively, of gross premiums written for the year ended December 31, 2006, versus 49 percent, 29 percent and 22 percent, respectively, for the same period in 2005. Net premiums earned in the year ended December 31, 2006, decreased 36.9 percent to $665.0 million, versus $1,053.5 million for the same period in 2005. The decline in gross premiums written and net premiums earned for the year ended December 31, 2006, principally relates to decreased life and annuity business written and earned and lower additional premiums recorded on prior-year contracts in 2006 compared to 2005. Net investment income for the three months ended December 31, 2006, increased to $40.8 million from $31.2 million for the same period in 2005 and is attributable to a year-over-year increase in cash and fixed-maturity balances and higher yields on fixed-maturity investments. Net investment income for the year ended December 31, 2006, increased $43.2 million, to $150.0 million, versus $106.8 million for the same period in 2005. Net gains on alternative investments for the three months ended December 31, 2006, were $66.5 million, or a 5.31 percent rate of return, versus net losses on alternative investments of $13.7 million, or a negative 1.11 percent rate of return, for the same period in 2005. For the year ended December 31, 2006, alternative investments have returned 6.96 percent, versus 3.34 percent for the same period in 2005. Invested assets were $4.5 billion as of December 31, 2006, with an allocation of approximately 77 percent to cash and fixed maturities and 23 percent to alternative investments. Losses and benefits were $117.9 million for the three months ended December 31, 2006, versus $247.0 million for the same period in 2005. The decrease in 2006 is principally attributable to lower losses associated with lower premiums earned and the absence of natural catastrophe Catastrophe, from the Greek Καταστροφή (katastrephein), literally means "to turn" (strephein) "downwards" (kata-). losses of $23.4 million included in the three months ended December 31, 2005. Losses and benefits for the year ended December 31, 2006, were $498.0 million versus $1,039.5 million for the same period in 2005. The decrease for the year ended December 31, 2006, is principally attributable to the decrease in life and annuity underwriting, favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. development on prior-year general liability insurance reserves in 2006 compared to adverse development on prior-year casualty reinsurance reserves in 2005, and the absence of significant natural catastrophe losses in 2006. Acquisition costs for the three months ended December 31, 2006, were $19.6 million compared to $16.3 million for the three months ended December 31, 2005. The increase reflects the higher net premiums earned in 2006 compared to 2005 after adjusting net premiums earned in 2005 for additional premiums recorded on prior-year contracts. Interest expense for the three months ended December 31, 2006, was $7.5 million versus $6.8 million for the same period in 2005. Interest expense for the year ended December 31, 2006, was $13.8 million versus $22.8 million for the same period in 2005. The decrease for the year principally reflects favorable development of $12.0 million on a reinsurance contract that was recorded as a deposit liability. General and administrative expenses for the three months ended December 31, 2006, were $27.7 million compared to $14.1 million for the same period in 2005. General and administrative expenses for the year ended December 31, 2006, were $87.4 million compared to $56.2 million for the same period in 2005. The increase in general and administrative expenses for the three months and the year ended December 31, 2006, principally reflects increased personnel costs, including costs related to senior management changes and additional costs related to the previously disclosed internal investigation. Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. was $1,390.1 million at December 31, 2006. Book value per share at December 31, 2006, was $23.06 per share, versus $20.16 at December 31, 2005. Annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. operating return on average shareholders' equity for the year ended December 31, 2006, was 17.3 percent. Max Re Capital Ltd., through its principal operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. , Max Re Ltd., Max Insurance Europe Limited and Max Re Europe Limited, provides insurance and reinsurance products to corporations, public entities, property and casualty insurers, and life and health insurers. This release includes statements about future expectations, plans and prospects of the Company that constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. for purposes of the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those suggested by such statements, including the risk that the SEC's view of the conclusions reached by the Audit and Risk Management Committee of the Company's Board of Directors in connection with the internal review of three finite finite - compact risk retrocessional contracts written in 2001 and 2003, which caused the Company to restate re·state tr.v. re·stat·ed, re·stat·ing, re·states To state again or in a new form. See Synonyms at repeat. re·state its audited financial statements for the years ended December 31, 2005, 2004, 2003, 2002 and 2001 and unaudited financial statements for the periods ended March 31, 2006, and June 30, 2006, may differ, perhaps materially, and result in material changes to information contained in the Company's past SEC filings, including financial statements and financial information. For further information regarding cautionary statements and factors affecting future results, please refer to the Company's Quarterly Report on Form 10-Q/A for the period ended September 30, 2006 and other documents filed by the Company with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statement whether as a result of new information, future developments or otherwise. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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