Exhibit 99.1
MAX RE CAPITAL REPORTS RECORD NET INCOME FOR 2006
HAMILTON, BERMUDA, February 10, 2007—Max Re Capital Ltd. (NASDAQ: MXRE; BSX: MXRE BH) today reported net income for the three months ended December 31, 2006, of $95.4 million, or $1.51 per fully diluted 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, which represents net income adjusted for net realized gains 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 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 performance across all of our business units. Our balanced specialty insurance and reinsurance 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 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 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 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 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 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 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, 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 for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act 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 risk retrocessional contracts written in 2001 and 2003, which caused the Company to restate 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.
| | |
| Contacts | | |
| N. James Tees | | Roy Winnick |
| Executive Vice President | | Kekst and Company |
| jimt@maxre.bm | | roy-winnick@kekst.com |
| 1-441-296-8800 | | 1-212-521-4842 |
MAX RE CAPITAL LTD.
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States Dollars, except per share and share amounts)
| | | | | | | | |
| | | December 31, 2006 | | | December 31, 2005 | |
| | | (Unaudited) | | | | |
ASSETS | | | | | | | | |
Cash and cash equivalents | | $ | 441,895 | | | $ | 314,031 | |
Fixed maturities, available for sale at fair value | | | 3,028,108 | | | | 2,682,864 | |
Alternative investments, at fair value | | | 1,065,874 | | | | 1,226,324 | |
Accrued interest income | | | 38,922 | | | | 32,632 | |
Premiums receivable | | | 390,889 | | | | 398,666 | |
Losses and benefits recoverable from reinsurers | | | 538,009 | | | | 453,641 | |
Funds withheld | | | 15,385 | | | | 16,932 | |
Deferred acquisition costs | | | 49,064 | | | | 69,015 | |
Prepaid reinsurance premiums | | | 104,443 | | | | 83,493 | |
Receivable for securities redeemed | | | 136,563 | | | | 4,565 | |
Other assets | | | 39,832 | | | | 23,001 | |
| | | | | | | | |
Total assets | | $ | 5,848,984 | | | $ | 5,305,164 | |
| | | | | | | | |
| | |
LIABILITIES | | | | | | | | |
Property and casualty losses | | $ | 2,335,109 | | | $ | 2,006,032 | |
Life and annuity benefits | | | 895,560 | | | | 854,224 | |
Deposit liabilities | | | 204,389 | | | | 225,328 | |
Funds withheld from reinsurers | | | 254,723 | | | | 271,992 | |
Unearned property and casualty premiums | | | 436,476 | | | | 442,976 | |
Reinsurance balances payable | | | 79,506 | | | | 90,781 | |
Accounts payable and accrued expenses | | | 103,160 | | | | 78,111 | |
Bank loan | | | 150,000 | | | | 150,000 | |
| | | | | | | | |
Total liabilities | | | 4,458,923 | | | | 4,119,444 | |
| | | | | | | | |
| | |
SHAREHOLDERS’ EQUITY | | | | | | | | |
Preferred shares (par value $1.00) 20,000,000 shares authorized; no shares issued or outstanding | | | — | | | | — | |
Common shares (par value $1.00) 200,000,000 shares authorized; 60,276,560 (2005 - 58,829,354) shares issued and outstanding | | | 60,277 | | | | 58,829 | |
Additional paid-in capital | | | 950,862 | | | | 921,384 | |
Loans receivable from common share sales | | | — | | | | (465 | ) |
Unearned stock grant compensation | | | (17,570 | ) | | | (14,574 | ) |
Accumulated other comprehensive income | | | (21,688 | ) | | | 4,981 | |
Retained earnings | | | 418,180 | | | | 215,565 | |
| | | | | | | | |
Total shareholders’ equity | | | 1,390,061 | | | | 1,185,720 | |
| | | | | | | | |
Total liabilities and shareholders’ equity | | $ | 5,848,984 | | | $ | 5,305,164 | |
| | | | | | | | |
Book Value Per Share | | $ | 23.06 | | | $ | 20.16 | |
| | | | | | | | |
MAX RE CAPITAL LTD.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited)
(Expressed in thousands of United States Dollars, except shares and per share amounts)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31 | | | Years Ended December 31 | |
| | | 2006 | | | 2005 | | | 2006 | | | 2005 | |
REVENUES | | | | | | | | | | | | | | | | |
Gross premiums written | | $ | 147,452 | | | $ | 257,188 | | | $ | 865,197 | | | $ | 1,246,031 | |
Reinsurance premiums ceded | | | (60,140 | ) | | | (68,346 | ) | | | (230,546 | ) | | | (198,974 | ) |
| | | | | | | | | | | | | | | | |
Net premiums written | | $ | 87,312 | | | $ | 188,842 | | | $ | 634,651 | | | $ | 1,047,057 | |
| | | | | | | | | | | | | | | | |
Earned premiums | | $ | 217,004 | | | $ | 318,222 | | | $ | 875,244 | | | $ | 1,247,584 | |
Earned premiums ceded | | | (58,023 | ) | | | (61,480 | ) | | | (210,236 | ) | | | (194,085 | ) |
| | | | | | | | | | | | | | | | |
Net premiums earned | | | 158,981 | | | | 256,742 | | | | 665,008 | | | | 1,053,499 | |
Net investment income | | | 40,836 | | | | 31,179 | | | | 150,030 | | | | 106,835 | |
Net gains (losses) on alternative investments | | | 66,531 | | | | (13,731 | ) | | | 84,750 | | | | 39,885 | |
Net realized gains (losses) on sale of fixed maturities | | | 1,451 | | | | (3,570 | ) | | | (5,798 | ) | | | (743 | ) |
Other income | | | 189 | | | | 1,047 | | | | 1,021 | | | | 4,635 | |
| | | | | | | | | | | | | | | | |
Total revenues | | | 267,988 | | | | 271,667 | | | | 895,011 | | | | 1,204,111 | |
| | | | | | | | | | | | | | | | |
| | | | |
LOSSES AND EXPENSES | | | | | | | | | | | | | | | | |
Losses and benefits | | | 117,860 | | | | 247,028 | | | | 497,969 | | | | 1,039,465 | |
Acquisition costs | | | 19,564 | | | | 16,309 | | | | 78,933 | | | | 76,224 | |
Interest expense | | | 7,514 | | | | 6,848 | | | | 13,832 | | | | 22,764 | |
General and administrative expenses | | | 27,664 | | | | 14,102 | | | | 87,389 | | | | 56,153 | |
| | | | | | | | | | | | | | | | |
Total losses and expenses | | | 172,602 | | | | 284,287 | | | | 678,123 | | | | 1,194,606 | |
| | | | | | | | | | | | | | | | |
| | | | |
NET INCOME (LOSS) | | | 95,386 | | | | (12,620 | ) | | | 216,888 | | | | 9,505 | |
Change in net unrealized appreciation of fixed maturities | | | (10,378 | ) | | | (9,704 | ) | | | (30,441 | ) | | | (13,364 | ) |
Foreign currency translation adjustment | | | (80 | ) | | | (568 | ) | | | 3,772 | | | | (3,882 | ) |
| | | | | | | | | | | | | | | | |
| | | | |
COMPREHENSIVE INCOME (LOSS) | | $ | 84,928 | | | $ | (22,892 | ) | | $ | 190,219 | | | $ | (7,741 | ) |
| | | | | | | | | | | | | | | | |
Basic earnings (loss) per share | | $ | 1.60 | | | $ | (0.22 | ) | | $ | 3.64 | | | $ | 0.20 | |
| | | | | | | | | | | | | | | | |
Diluted earnings (loss) per share | | $ | 1.51 | | | $ | (0.22 | ) | | $ | 3.43 | | | $ | 0.18 | |
| | | | | | | | | | | | | | | | |
Diluted net operating earnings (loss) per share | | $ | 1.49 | | | $ | (0.16 | ) | | $ | 3.52 | | | $ | 0.19 | |
| | | | | | | | | | | | | | | | |
Weighted average shares outstanding—basic | | | 59,717,958 | | | | 56,133,014 | | | | 59,655,636 | | | | 48,685,954 | |
| | | | | | | | | | | | | | | | |
Weighted average shares outstanding—diluted | | | 63,510,091 | | | | 56,133,014 | | | | 63,258,800 | | | | 52,556,015 | |
| | | | | | | | | | | | | | | | |
MAX RE CAPITAL LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited)
(Expressed in thousands of United States Dollars)
| | | | | | | | |
| | | Years ended December 31, | |
| | | 2006 | | | 2005 | |
Preferred shares | | | | | | | | |
Balance, beginning of period | | $ | — | | | $ | — | |
| | | | | | | | |
Balance, end of period | | | — | | | | — | |
| | | | | | | | |
| | |
Common shares | | | | | | | | |
Balance, beginning of period | | | 58,829 | | | | 45,826 | |
Issue of shares | | | 1,449 | | | | 13,338 | |
Repurchase of shares | | | (1 | ) | | | (335 | ) |
| | | | | | | | |
Balance, end of period | | | 60,277 | | | | 58,829 | |
| | | | | | | | |
| | |
Additional paid-in capital | | | | | | | | |
Balance, beginning of period | | | 921,384 | | | | 643,444 | |
Issue of common shares | | | 27,122 | | | | 297,117 | |
Direct equity offering expenses | | | — | | | | (13,134 | ) |
Stock option expense | | | 2,373 | | | | 982 | |
Repurchase of shares | | | (17 | ) | | | (7,025 | ) |
| | | | | | | | |
Balance, end of period | | | 950,862 | | | | 921,384 | |
| | | | | | | | |
| | |
Loans receivable from common share sales | | | | | | | | |
Balance, beginning of period | | | (465 | ) | | | (10,515 | ) |
Loans repaid | | | 465 | | | | 10,050 | |
| | | | | | | | |
Balance, end of period | | | — | | | | (465 | ) |
| | | | | | | | |
| | |
Unearned stock grant compensation | | | | | | | | |
Balance, beginning of period | | | (14,574 | ) | | | (13,294 | ) |
Stock grants awarded | | | (17,068 | ) | | | (11,294 | ) |
Amortization | | | 14,072 | | | | 10,014 | |
| | | | | | | | |
Balance, end of period | | | (17,570 | ) | | | (14,574 | ) |
| | | | | | | | |
| | |
Accumulated other comprehensive income (loss) | | | | | | | | |
Balance, beginning of period | | | 4,981 | | | | 22,227 | |
Holding losses on fixed maturities arising in period | | | (36,239 | ) | | | (14,107 | ) |
Net realized losses included in net income | | | 5,798 | | | | 743 | |
Currency translation adjustments | | | 3,772 | | | | (3,882 | ) |
| | | | | | | | |
Balance, end of period | | | (21,688 | ) | | | 4,981 | |
| | | | | | | | |
| | |
Retained earnings | | | | | | | | |
Balance, beginning of period | | | 215,565 | | | | 215,015 | |
Net income | | | 216,888 | | | | 9,505 | |
Dividends paid | | | (14,273 | ) | | | (8,955 | ) |
| | | | | | | | |
Balance, end of period | | | 418,180 | | | | 215,565 | |
| | | | | | | | |
| | |
Total shareholders’ equity | | $ | 1,390,061 | | | $ | 1,185,720 | |
| | | | | | | | |
MAX RE CAPITAL LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Expressed in thousands of United States Dollars)
| | | | | | | | |
| | | Years Ended December 31 | |
| | | 2006 | | | 2005 | |
OPERATING ACTIVITIES | | | | | | | | |
Net income | | $ | 216,888 | | | $ | 9,505 | |
Adjustments to reconcile net income to net cash from operating activities: | | | | | | | | |
Amortization of unearned stock based compensation | | | 16,445 | | | | 10,996 | |
Amortization of premium on fixed maturities | | | 6,052 | | | | 9,293 | |
Accretion of deposit liabilities | | | (6,513 | ) | | | 4,652 | |
Net realized (gains) losses on sale of fixed maturities | | | 5,798 | | | | 743 | |
Alternative investments | | | 160,626 | | | | (107,787 | ) |
Accrued interest income | | | (6,290 | ) | | | (8,375 | ) |
Premiums receivable | | | 7,777 | | | | (135,952 | ) |
Losses and benefits recoverable from reinsurers | | | (84,368 | ) | | | (113,518 | ) |
Funds withheld | | | 1,547 | | | | 667 | |
Deferred acquisition costs | | | 19,951 | | | | (14,245 | ) |
Prepaid reinsurance premiums | | | (20,950 | ) | | | (4,156 | ) |
Receivable for securities redeemed | | | (131,998 | ) | | | (4,565 | ) |
Other assets | | | (16,831 | ) | | | 3,383 | |
Property and casualty losses | | | 329,077 | | | | 550,933 | |
Life and annuity benefits | | | 41,336 | | | | 188,123 | |
Funds withheld from reinsurers | | | (17,269 | ) | | | (13,068 | ) |
Unearned property and casualty premiums | | | (6,500 | ) | | | (4,657 | ) |
Reinsurance balances payable | | | (11,275 | ) | | | 40,523 | |
Accounts payable and accrued expenses | | | 25,049 | | | | (17,967 | ) |
| | | | | | | | |
Cash from operating activities | | | 528,552 | | | | 394,528 | |
| | | | | | | | |
| | |
INVESTING ACTIVITIES | | | | | | | | |
Purchase of fixed maturities | | | (1,108,748 | ) | | | (1,789,339 | ) |
Sales of fixed maturities | | | 555,918 | | | | 1,181,516 | |
Redemptions of fixed maturities | | | 165,119 | | | | 58,061 | |
| | | | | | | | |
Cash used in investing activities | | | (387,711 | ) | | | (549,762 | ) |
| | | | | | | | |
| | |
FINANCING ACTIVITIES | | | | | | | | |
Net proceeds from issuance of common shares | | | 11,503 | | | | 286,027 | |
Repurchase of common shares | | | (18 | ) | | | (7,360 | ) |
Dividends | | | (14,273 | ) | | | (8,955 | ) |
Additions to deposit liabilities | | | 25,587 | | | | 9,772 | |
Payment of deposit liabilities | | | (40,013 | ) | | | (55,575 | ) |
Notes and loans repaid | | | 465 | | | | 10,050 | |
| | | | | | | | |
Cash from (used in) financing activities | | | (16,749 | ) | | | 233,959 | |
| | | | | | | | |
Effect of exchange rate on cash | | | 3,772 | | | | (3,882 | ) |
Net increase in cash and cash equivalents | | | 127,864 | | | | 74,843 | |
Cash and cash equivalents, beginning of period | | | 314,031 | | | | 239,188 | |
| | | | | | | | |
| | |
CASH AND CASH EQUIVALENTS, END OF PERIOD | | $ | 441,895 | | | $ | 314,031 | |
| | | | | | | | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid totaled $12,384 and $10,269 for the years ended December 31, 2006 and 2005, respectively.
Taxes paid totaled $1,430 and $1,058 for the years ended December 31, 2006 and 2005, respectively.
MAX RE CAPITAL LTD.
SCHEDULE OF SUPPLEMENTAL DATA - YEAR ENDED DECEMBER 31, 2006 (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | |
| Year to Date Segment Information: | | Property & Casualty | | | Life & Annuity Reinsurance | | | Corporate | | | Consolidated | |
(in 000’s US$) | | Reinsurance | | | Insurance | | | Total | | | | | | | | |
Gross premiums written | | $ | 423,555 | | | $ | 396,594 | | | $ | 820,149 | | | $ | 45,048 | | | $ | — | | | $ | 865,197 | |
Reinsurance premiums ceded | | | (35,267 | ) | | | (194,549 | ) | | | (229,816 | ) | | | (730 | ) | | | — | | | | (230,546 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net premiums written | | $ | 388,288 | | | $ | 202,045 | | | $ | 590,333 | | | $ | 44,318 | | | $ | — | | | $ | 634,651 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Earned premiums | | $ | 456,283 | | | $ | 373,913 | | | $ | 830,196 | | | $ | 45,048 | | | $ | — | | | $ | 875,244 | |
Earned premiums ceded | | | (33,470 | ) | | | (176,036 | ) | | | (209,506 | ) | | | (730 | ) | | | — | | | | (210,236 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net premiums earned | | | 422,813 | | | | 197,877 | | | | 620,690 | | | | 44,318 | | | | — | | | | 665,008 | |
Net investment income | | | 38,613 | | | | 14,852 | | | | 53,465 | | | | 29,013 | | | | 67,552 | | | | 150,030 | |
Net gains on alternative investments | | | 20,167 | | | | 5,168 | | | | 25,335 | | | | 22,901 | | | | 36,514 | | | | 84,750 | |
Net realized losses on sales of fixed maturities | | | — | | | | — | | | | — | | | | — | | | | (5,798 | ) | | | (5,798 | ) |
Other income | | | — | | | | — | | | | — | | | | — | | | | 1,021 | | | | 1,021 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | | 481,593 | | | | 217,897 | | | | 699,490 | | | | 96,232 | | | | 99,289 | | | | 895,011 | |
Losses and benefits | | | 296,036 | | | | 124,183 | | | | 420,219 | | | | 77,750 | | | | — | | | | 497,969 | |
Acquisition costs | | | 77,330 | | | | (136 | ) | | | 77,194 | | | | 1,739 | | | | — | | | | 78,933 | |
Interest expense | | | (3,828 | ) | | | — | | | | (3,828 | ) | | | 5,233 | | | | 12,427 | | | | 13,832 | |
General and administrative expenses | | | 23,484 | | | | 15,641 | | | | 39,125 | | | | 3,038 | | | | 45,226 | | | | 87,389 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total losses and expenses | | | 393,022 | | | | 139,688 | | | | 532,710 | | | | 87,760 | | | | 57,653 | | | | 678,123 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 88,571 | | | $ | 78,209 | | | $ | 166,780 | | | $ | 8,472 | | | $ | 41,636 | | | $ | 216,888 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Loss Ratio (a) | | | 70.0 | % | | | 62.8 | % | | | 67.7 | % | | | | | | | | | | | | |
Combined Ratio (b) | | | 93.9 | % | | | 70.6 | % | | | 86.4 | % | | | | | | | | | | | | |
SCHEDULE OF SUPPLEMENTAL DATA - THREE MONTHS TO DECEMBER 31, 2006 (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Quarter Segment Information: | | Property & Casualty | | | Life & Annuity Reinsurance | | | Corporate | | Consolidated | |
(in 000’s US$) | | Reinsurance | | | Insurance | | | Total | | | | | | | |
Gross premiums written | | $ | 26,074 | | | $ | 120,516 | | | $ | 146,590 | | | $ | 862 | | | $ | — | | $ | 147,452 | |
Reinsurance premiums ceded | | | (1,614 | ) | | | (58,353 | ) | | | (59,967 | ) | | | (173 | ) | | | — | | | (60,140 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
Net premiums written | | $ | 24,460 | | | $ | 62,163 | | | $ | 86,623 | | | $ | 689 | | | $ | — | | $ | 87,312 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Earned premiums | | $ | 116,403 | | | $ | 99,739 | | | $ | 216,142 | | | $ | 862 | | | $ | — | | $ | 217,004 | |
Earned premiums ceded | | | (8,999 | ) | | | (48,851 | ) | | | (57,850 | ) | | | (173 | ) | | | — | | | (58,023 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
Net premiums earned | | | 107,404 | | | | 50,888 | | | | 158,292 | | | | 689 | | | | — | | | 158,981 | |
Net investment income | | | 9,159 | | | | 4,609 | | | | 13,768 | | | | 7,378 | | | | 19,690 | | | 40,836 | |
Net gains on alternative investments | | | 16,826 | | | | 4,406 | | | | 21,232 | | | | 19,218 | | | | 26,081 | | | 66,531 | |
Net realized gains on sales of fixed maturities | | | — | | | | — | | | | — | | | | — | | | | 1,451 | | | 1,451 | |
Other income | | | — | | | | — | | | | — | | | | — | | | | 189 | | | 189 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total revenues | | | 133,389 | | | | 59,903 | | | | 193,292 | | | | 27,285 | | | | 47,411 | | | 267,988 | |
Losses and benefits | | | 71,076 | | | | 40,869 | | | | 111,945 | | | | 5,915 | | | | — | | | 117,860 | |
Acquisition costs | | | 19,970 | | | | (690 | ) | | | 19,280 | | | | 284 | | | | — | | | 19,564 | |
Interest expense | | | 2,656 | | | | — | | | | 2,656 | | | | 1,571 | | | | 3,287 | | | 7,514 | |
General and administrative expenses | | | 6,527 | | | | 4,874 | | | | 11,401 | | | | 869 | | | | 15,394 | | | 27,664 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Total losses and expenses | | | 100,229 | | | | 45,053 | | | | 145,282 | | | | 8,639 | | | | 18,681 | | | 172,602 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 33,160 | | | $ | 14,850 | | | $ | 48,010 | | | $ | 18,646 | | | $ | 28,730 | | $ | 95,386 | |
| | | | | | | | | | | | | | | | | | | | | | | |
Loss Ratio (a) | | | 66.2 | % | | | 80.3 | % | | | 70.7 | % | | | | | | | | | | | |
Combined Ratio (b) | | | 90.8 | % | | | 88.5 | % | | | 90.1 | % | | | | | | | | | | | |
| (a) | The loss ratio is calculated by dividing losses and benefits by net premiums earned. |
| (b) | The combined ratio is calculated by dividing the sum of losses and benefits, acquisition costs and general and administrative expenses by net premiums earned. |
MAX RE CAPITAL LTD.
SCHEDULE OF SUPPLEMENTAL DATA—DECEMBER 31, 2006 (Unaudited)
| | | | | | | | | | | | | | | |
| | | | | | | | Periodic Rate of Return | |
Selected Investment Return Data: | | Fair Value* | | Investment
%’s | | | Last 3 Months | | | Year to Date | | | Last 60 months** | |
Cash and Fixed Maturities | | $ | 3,470,003 | | 76.5 | % | | 0.96 | % | | 3.78 | % | | 4.68 | % |
| | | | | | | | | | | | | | | |
Commodity Trading Advisers | | $ | 27,858 | | 0.6 | % | | 11.32 | % | | 8.32 | % | | 6.17 | % |
Distressed Securities | | | 210,633 | | 4.6 | % | | 6.40 | % | | 16.32 | % | | 18.49 | % |
Diversified Arbitrage | | | 169,226 | | 3.7 | % | | 5.56 | % | | -1.71 | % | | 6.73 | % |
Emerging Markets | | | 108,534 | | 2.4 | % | | 4.41 | % | | 9.97 | % | | 15.59 | % |
Event-Driven Arbitrage | | | 169,857 | | 3.7 | % | | 5.31 | % | | 8.15 | % | | 11.12 | % |
Fixed Income Arbitrage | | | 25,748 | | 0.6 | % | | 1.59 | % | | 12.64 | % | | 7.07 | % |
Global Macro | | | 60,382 | | 1.3 | % | | 2.84 | % | | 4.03 | % | | 8.64 | % |
Long / Short Credit | | | 81,023 | | 1.8 | % | | 6.96 | % | | 15.32 | % | | 10.29 | % |
Long / Short Equity | | | 180,605 | | 4.0 | % | | 6.77 | % | | 4.07 | % | | 6.03 | % |
Opportunistic | | | 29,515 | | 0.7 | % | | 4.77 | % | | 24.73 | % | | 15.42 | % |
| | | | | | | | | | | | | | | |
MDS | | | 1,063,381 | | 23.4 | % | | 5.22 | % | | 6.30 | % | | 8.47 | % |
Reinsurance Private Equity | | | 2,493 | | 0.1 | % | | 7.80 | % | | 31.64 | % | | -2.36 | % |
| | | | | | | | | | | | | | | |
Alternative Investments | | $ | 1,065,874 | | 23.5 | % | | 5.31 | % | | 6.96 | % | | 7.98 | % |
| | | | | | | | | | | | | | | |
Total Investments | | $ | 4,535,877 | | 100.0 | % | | 2.15 | % | | 4.73 | % | | 5.81 | % |
| | | | | | | | | | | | | | | |
| * | Expressed in thousands of United States Dollars |
