Exhibit 99.1
Transatlantic Holdings, Inc. Announces Record Net Income for 2007
NEW YORK--(BUSINESS WIRE)--Transatlantic Holdings, Inc. (NYSE: TRH) today reported that its net income for the year ended December 31, 2007 increased 13.8% to $487.1 million, or $7.31 per common share (diluted), compared to $428.2 million, or $6.46 per common share (diluted), in 2006. Net income for the fourth quarter of 2007 amounted to $112.5 million, or $1.68 per common share (diluted), compared to $114.8 million, or $1.73 per common share (diluted), in the fourth quarter of 2006.
Income before income taxes for the year 2007 amounted to $595.8 million compared to $539.9 million in 2006. These results include pre-tax realized net capital gains of $9.4 million and $10.9 million in 2007 and 2006, respectively. Income before income taxes for the fourth quarter of 2007 amounted to $132.5 million compared to $148.9 million in the fourth quarter of 2006. These results include pre-tax realized net capital (losses) gains of ($22.6) million and $4.4 million in the fourth quarter of 2007 and 2006, respectively. Pre-tax realized net capital gains (losses) in the year and fourth quarter of 2007 include write-downs of certain securities, principally equities, totaling ($27.1) million and ($23.8) million, respectively, as such securities were considered to be other than temporarily impaired. Such write-downs in the comparable 2006 periods were insignificant.
Income before income taxes in the 2007 year and fourth quarter also includes estimated pre-tax net catastrophe costs of $55.2 million and ($1.3) million, respectively. The computation of these costs involves a significant amount of judgment and is based on information presently available. Net catastrophe costs included in income before income taxes for the 2006 year and fourth quarter totaled $28.7 million and $9.9 million, respectively.
“We are pleased with our 2007 performance, which saw record highs achieved in net income and operating cash flows,” said Robert F. Orlich, President and Chief Executive Officer. “Favorable loss experience in property lines benefited our results. Our GAAP return on equity for the year was 15.4%.
“Premium volume grew during the year due largely to the success of recent underwriting initiatives in the U.S. and overseas and the strength of major foreign currencies against the U.S. dollar. While market pricing has weakened in many regions and classes, we are addressing those challenges through disciplined underwriting and by capitalizing on opportunities in less saturated sectors of the global reinsurance marketplace. Our long-term success has been built on our financial strength, global reach and consistency, and the professionalism and enterprise of our staff worldwide.”
Net premiums written for the year 2007 amounted to $3,952.9 million compared to $3,633.4 million in 2006, an increase of 8.8%. Net premiums written for the fourth quarter of 2007 increased 10.0% to $1,001.0 million compared to $910.2 million in the fourth quarter of 2006. (Refer to the table in the Consolidated Statistical Supplement presenting the effect of changes in foreign currency exchange rates on the increase in net premiums written between periods.) International business represented 51% of net premiums written in 2007 versus 52% in 2006.
Net losses and loss adjustment expenses incurred include estimated net adverse development related to losses (including catastrophe events) occurring in prior years which totaled $88 million and $181 million for the year 2007 and 2006, respectively.
The combined ratio for the year 2007 was 95.3% versus 96.0% in 2006. The aggregate net impact of pre-tax catastrophe costs and estimated net adverse development related to losses occurring in prior years added 3.4% and 5.0% to the combined ratio for the year 2007 and 2006, respectively. The combined ratio for the fourth quarter of 2007 was 95.0% versus 95.5% in the fourth quarter of 2006.
Net loss and loss adjustment expense reserves increased $231.0 million during the fourth quarter of 2007, bringing the amount of such reserves to $6.90 billion at December 31, 2007. (Refer to the analysis of changes in net loss and loss adjustment expense reserves in the Consolidated Statistical Supplement for additional information.)
TRH’s loss and loss adjustment expense ratio represents net losses and loss adjustment expenses expressed as a percentage of net premiums earned. The underwriting expense ratio represents the sum of net commissions and other underwriting expenses expressed as a percentage of net premiums written. The combined ratio represents the sum of the loss and loss adjustment expense ratio and the underwriting expense ratio. Net loss and loss adjustment expense reserves represent unpaid losses and loss adjustment expenses, net of related reinsurance recoverable. The combined ratio and its components, as well as net loss and loss adjustment expense reserves, are presented in accordance with principles prescribed or permitted by insurance regulatory authorities, as these are standard measures in the insurance and reinsurance industries. GAAP return on equity represents net income divided by average stockholders’ equity.
Net investment income increased 8.1% in the year 2007 to $469.8 million compared to $434.5 million in 2006. Net investment income increased 3.9% in the fourth quarter of 2007 to $122.1 million compared to $117.5 million reported in the fourth quarter of 2006. At December 31, 2007, investments and cash totaled $12.76 billion. (Refer to the analysis of net investment income in the Consolidated Statistical Supplement for additional information.)
TRH’s investments, including securities lending collateral, include various asset-backed and collateralized fixed maturities. As of December 31, 2007, the total balance sheet carrying value of asset-backed and collateralized securities is $917.7 million, 94% of which are rated Aaa. Net unrealized losses related to such securities totaled $39.8 million, or $25.9 million, net of tax, and are reflected as a reduction of accumulated other comprehensive income. (Refer to the Supplemental Investment Data in the Consolidated Statistical Supplement for additional information on the components and quality of invested assets.)
At December 31, 2007, TRH’s consolidated assets and stockholders’ equity were $15.49 billion and $3.35 billion, respectively. Book value per common share was $50.56.
In the fourth quarter of 2007, the Board of Directors declared a quarterly cash dividend of $0.16 per common share to stockholders of record as of March 7, 2008, payable on March 21, 2008.
Visit -- www.transre.com -- for additional information about TRH.
| Caution concerning forward-looking statements: |
This press release contains forward-looking statements, including management’s beliefs about market conditions and expectations regarding the aggregate net impact on operating results from recent catastrophe losses, within the meaning of the U.S. federal securities laws. These forward-looking statements are based on assumptions and opinions concerning a variety of known and unknown risks. Please refer to TRH’s Annual Report on Form 10-K for the year ended December 31, 2006, the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2007, June 30, 2007 and September 30, 2007 as well as its future filings and reports filed with or furnished to the Securities and Exchange Commission for a description of the business environment in which TRH operates and the important factors, risks and uncertainties that may affect its business and financial results. If any assumptions or opinions prove incorrect, any forward-looking statements made on that basis may also prove materially incorrect. TRH is not under any obligation to (and expressly disclaims any such obligations to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
Transatlantic Holdings, Inc. (TRH) is a leading international reinsurance organization headquartered in New York, with operations also based in Arlington, Chicago, Columbus, Overland Park, San Francisco, Stamford, Toronto, Miami (serving Latin America and the Caribbean), Panama, Buenos Aires, Rio de Janeiro, London, Paris, Zurich, Stockholm, Warsaw, Johannesburg, Hong Kong, Shanghai, Tokyo and Sydney. Its subsidiaries, Transatlantic Reinsurance Company®, Trans Re Zurich and Putnam Reinsurance Company, offer reinsurance capacity on both a treaty and facultative basis ― structuring programs for a full range of property and casualty products, with an emphasis on specialty risks.
| Transatlantic Holdings, Inc. and Subsidiaries | |||||||||||
| Consolidated Financial Data | |||||||||||
| Statement of Operations Data: | |||||||||||
| Twelve Months Ended | |||||||||||
| December 31, | |||||||||||
| 2007 | 2006 | Change | |||||||||
| (in thousands, except per share data) | |||||||||||
| Revenues: | |||||||||||
| Net premiums written | $ | 3,952,899 | $ | 3,633,440 | 8.8 | % | |||||
(Increase) decrease in net unearned premiums | (50,230 | ) | (29,346 | ) | |||||||
| Net premiums earned | 3,902,669 | 3,604,094 | 8.3 | ||||||||
| Net investment income | 469,772 | 434,540 | 8.1 | ||||||||
| Realized net capital gains (losses) | 9,389 | 10,862 | |||||||||
| Total revenues | 4,381,830 | 4,049,496 | 8.2 | ||||||||
| Expenses: | |||||||||||
Net losses and loss adjustment expenses | 2,638,033 | 2,462,666 | |||||||||
| Net commissions | 980,121 | 903,666 | |||||||||
| Other underwriting expenses | 115,760 | 102,339 | |||||||||
(Increase) decrease in deferred acquisition costs | (16,901 | ) | (13,471 | ) | |||||||
| Interest on senior notes | 43,421 | 43,405 | |||||||||
| Other, net | 25,644 | 10,983 | |||||||||
| Total expenses | 3,786,078 | 3,509,588 | |||||||||
| Income before income taxes | 595,752 | 539,908 | 10.3 | ||||||||
| Income taxes | 108,611 | 111,756 | |||||||||
| Net income | $ | 487,141 | $ | 428,152 | 13.8 | ||||||
| Net income per common share: | |||||||||||
| Basic | $ | 7.37 | $ | 6.49 | 13.5 | ||||||
| Diluted | 7.31 | 6.46 | 13.1 | ||||||||
| Cash dividends per common share | 0.615 | 0.525 | 17.1 | ||||||||
Weighted average common shares outstanding: | |||||||||||
| Basic | 66,124 | 65,955 | |||||||||
| Diluted | 66,654 | 66,266 | |||||||||
| Ratios: | |||||||||||
| Loss and loss adjustment expense | 67.6 | % |
| 68.3 | % |
| |||||
| Underwriting expense | 27.7 | 27.7 | |||||||||
| Combined | 95.3 | 96.0 | |||||||||
| Statement of Operations Data: | |||||||||||
| Three Months Ended | |||||||||||
| December 31, | |||||||||||
| 2007 | 2006 | Change | |||||||||
| (in thousands, except per share data) | |||||||||||
| Revenues: | |||||||||||
| Net premiums written | $ | 1,001,027 | $ | 910,163 | 10.0 | % | |||||
(Increase) decrease in net unearned premiums | 28,604 | (18,525 | ) | ||||||||
| Net premiums earned | 1,029,631 | 891,638 | 15.5 | ||||||||
| Net investment income | 122,107 | 117,520 | 3.9 | ||||||||
| Realized net capital gains (losses) | (22,613 | ) | 4,385 | ||||||||
| Total revenues | 1,129,125 | 1,013,543 | 11.4 | ||||||||
| Expenses: | |||||||||||
Net losses and loss adjustment expenses | 690,410 | 602,360 | |||||||||
| Net commissions | 244,080 | 222,075 | |||||||||
| Other underwriting expenses | 35,533 | 32,346 | |||||||||
(Increase) decrease in deferred acquisition costs | 4,355 | (6,343 | ) | ||||||||
| Interest on senior notes | 10,857 | 10,853 | |||||||||
| Other, net | 11,407 | 3,354 | |||||||||
| Total expenses | 996,642 | 864,645 | |||||||||
| Income before income taxes | 132,483 | 148,898 | (11.0 | ) | |||||||
| Income taxes | 19,959 | 34,101 | |||||||||
| Net income | $ | 112,524 | $ | 114,797 | (2.0 | ) | |||||
| Net income per common share: | |||||||||||
| Basic | $ | 1.70 | $ | 1.74 | (2.3 | ) | |||||
| Diluted | 1.68 | 1.73 | (2.7 | ) | |||||||
| Cash dividends per common share | 0.160 | 0.135 | 18.5 | ||||||||
Weighted average common shares outstanding: | |||||||||||
| Basic | 66,198 | 65,996 | |||||||||
| Diluted | 66,806 | 66,336 | |||||||||
| Ratios: | |||||||||||
| Loss and loss adjustment expense | 67.1 | % |
| 67.6 | % |
| |||||
| Underwriting expense | 27.9 | 27.9 | |||||||||
| Combined | 95.0 | 95.5 | |||||||||
| Transatlantic Holdings, Inc. and Subsidiaries | ||||||||
| Consolidated Financial Data | ||||||||
| As of December 31, 2007 and 2006 | ||||||||
| Balance Sheet Data: | ||||||||
| 2007 | 2006 | |||||||
| (in thousands, except share data) | ||||||||
| ASSETS | ||||||||
| Investments and cash: | ||||||||
| Fixed maturities: | ||||||||
Held to maturity, at amortized cost (fair value: 2007-$1,280,011; 2006-$1,291,634) | $ | 1,249,935 | $ | 1,254,017 | ||||
Available for sale, at fair value (amortized cost: 2007-$8,034,738; 2006-$6,943,290) (pledged, at fair value: 2007-$1,966,364; 2006-$1,577,864) | 8,099,252 | 7,061,090 | ||||||
| Equities: | ||||||||
| Available for sale, at fair value: | ||||||||
Common stocks (cost: 2007-$572,468; 2006-$527,149) (pledged, at fair value: 2007-$21,900; 2006-$41,187) | 587,373 | 571,422 | ||||||
| Nonredeemable preferred stocks (cost: 2007-$224,298; 2006-$229,066) | 197,870 | 236,846 | ||||||
Trading, at fair value, principally common stocks (cost: 2007-$35,916; 2006-$37,397) (pledged, at fair value: 2007-$2,144) | 35,357 | 38,232 | ||||||
| Other invested assets | 250,921 | 231,502 | ||||||
Securities lending collateral, at fair value (amortized cost: 2007-$2,053,271; 2006-$1,694,841) | 2,012,031 | 1,694,841 | ||||||
| Short-term investments, at cost (approximates fair value) | 67,801 | 42,882 | ||||||
| Cash and cash equivalents | 255,432 | 205,264 | ||||||
| Total investments and cash | 12,755,972 | 11,336,096 | ||||||
| Accrued investment income | 143,675 | 129,759 | ||||||
| Premium balances receivable, net | 640,068 | 708,579 | ||||||
| Reinsurance recoverable on paid and unpaid losses and loss adjustment expenses | 1,078,384 | 1,395,192 | ||||||
| Deferred acquisition costs | 248,081 | 231,180 | ||||||
| Prepaid reinsurance premiums | 71,617 | 68,647 | ||||||
| Deferred income taxes | 426,600 | 310,967 | ||||||
| Other assets | 122,713 | 88,044 | ||||||
| Total assets | $ | 15,487,110 | $ | 14,268,464 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Unpaid losses and loss adjustment expenses | $ | 7,926,261 | $ | 7,467,949 | ||||
| Unearned premiums | 1,226,647 | 1,144,022 | ||||||
| Securities lending payable | 2,054,649 | 1,694,841 | ||||||
| 5.75% senior notes due December 14, 2015: | ||||||||
| Affiliates | 448,158 | 447,980 | ||||||
| Other | 298,772 | 298,653 | ||||||
| Other liabilities | 183,581 | 256,749 | ||||||
| Total liabilities | 12,138,068 | 11,310,194 | ||||||
Preferred Stock, $1.00 par value; shares authorized: 5,000,000; none issued | - | - | ||||||
Common Stock, $1.00 par value; shares authorized: 100,000,000; shares issued: 2007-67,222,470; 2006-67,026,608 | 67,222 | 67,027 | ||||||
| Additional paid-in capital | 249,853 | 228,480 | ||||||
| Accumulated other comprehensive (loss) income | (34,692 | ) | 42,626 | |||||
| Retained earnings | 3,088,578 | 2,642,056 | ||||||
| Treasury Stock, at cost; 988,900 shares of common stock | (21,919 | ) | (21,919 | ) | ||||
| Total stockholders' equity | 3,349,042 | 2,958,270 | ||||||
| Total liabilities and stockholders' equity | $ | 15,487,110 | $ | 14,268,464 | ||||
| Transatlantic Holdings, Inc. and Subsidiaries | ||||||||
| Consolidated Financial Data | ||||||||
| Condensed Cash Flow Data: | ||||||||
| Twelve Months Ended | ||||||||
| December 31, | ||||||||
| 2007 | 2006 | |||||||
| (in thousands) | ||||||||
| Net cash provided by operating activities | $ | 1,026,810 | $ | 845,411 | ||||
| Cash flows from investing activities: | ||||||||
| Proceeds of fixed maturities available for sale sold | 1,348,583 | 692,237 | ||||||
Proceeds of fixed maturities available for sale redeemed or matured | 490,205 | 412,379 | ||||||
| Proceeds of equities available for sale sold | 1,189,392 | 981,671 | ||||||
| Purchase of fixed maturities available for sale | (2,782,062 | ) | (1,767,482 | ) | ||||
| Purchase of equities available for sale | (1,191,044 | ) | (1,165,148 | ) | ||||
| Net sale of other invested assets | 6,115 | 8,792 | ||||||
| Net change in securities lending collateral | (305,987 | ) | (1,038,979 | ) | ||||
| Net (purchase) sale of short-term investments | (20,329 | ) | 2,473 | |||||
| Change in other liabilities for securities in course of settlement | 1,198 | 7,350 | ||||||
| Other, net | 5,947 | 14,440 | ||||||
| Net cash used in investing activities | (1,257,982 | ) | (1,852,267 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Net change in securities lending payable | 305,987 | 1,038,979 | ||||||
| Dividends to stockholders | (39,019 | ) | (33,637 | ) | ||||
| Proceeds from common stock issued | 6,042 | 3,273 | ||||||
| Other, net | 790 | 233 | ||||||
| Net cash provided by (used in) financing activities | 273,800 | 1,008,848 | ||||||
| Effect of exchange rate changes on cash and cash equivalents | 7,540 | 5,152 | ||||||
| Change in cash and cash equivalents | 50,168 | 7,144 | ||||||
| Cash and cash equivalents, beginning of period | 205,264 | 198,120 | ||||||
| Cash and cash equivalents, end of period | $ | 255,432 | $ | 205,264 | ||||
| Supplemental cash flow information: | ||||||||
| Income taxes paid, net | $ | 184,592 | $ | 54,417 | ||||
| Interest paid on senior notes | 43,125 | 43,125 | ||||||
| Condensed Cash Flow Data: | ||||||||
| Three Months Ended | ||||||||
| December 31, | ||||||||
| 2007 | 2006 | |||||||
| (in thousands) | ||||||||
| Net cash provided by operating activities | $ | 314,130 | $ | 211,909 | ||||
| Cash flows from investing activities: | ||||||||
| Proceeds of fixed maturities available for sale sold | 419,670 | 234,760 | ||||||
Proceeds of fixed maturities available for sale redeemed or matured | 68,302 | 140,895 | ||||||
| Proceeds of equities available for sale sold | 287,381 | 235,887 | ||||||
| Purchase of fixed maturities available for sale | (718,699 | ) | (610,894 | ) | ||||
| Purchase of equities available for sale | (309,984 | ) | (222,760 | ) | ||||
| Net sale of other invested assets | 1,438 | 3,138 | ||||||
| Net change in securities lending collateral | (106,446 | ) | 35,111 | |||||
| Net (purchase) sale of short-term investments | 1,007 | 18,771 | ||||||
| Change in other liabilities for securities in course of settlement | (38,070 | ) | 3,175 | |||||
| Other, net | 7,454 | 7,089 | ||||||
| Net cash used in investing activities | (387,947 | ) | (154,828 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Net change in securities lending payable | 106,446 | (35,111 | ) | |||||
| Dividends to stockholders | (10,592 | ) | (8,908 | ) | ||||
| Proceeds from common stock issued | 1,740 | 1,280 | ||||||
| Other, net | 674 | (84 | ) | |||||
| Net cash provided by (used in) financing activities | 98,268 | (42,823 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents | 4,912 | 1,897 | ||||||
| Change in cash and cash equivalents | 29,363 | 16,155 | ||||||
| Cash and cash equivalents, beginning of period | 226,069 | 189,109 | ||||||
| Cash and cash equivalents, end of period | $ | 255,432 | $ | 205,264 | ||||
| Supplemental cash flow information: | ||||||||
| Income taxes paid, net | $ | 31,513 | $ | 12,240 | ||||
| Interest paid on senior notes | 21,562 | 21,562 | ||||||
| Transatlantic Holdings, Inc. and Subsidiaries | ||||||||||||||||
| Consolidated Financial Data | ||||||||||||||||
| Comprehensive Income Data: | ||||||||||||||||
| Twelve Months Ended | Three Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Net income | $ | 487,141 | $ | 428,152 | $ | 112,524 | $ | 114,797 | ||||||||
| Other comprehensive (loss) income: | ||||||||||||||||
| Net unrealized (depreciation) appreciation of investments, net of tax: | ||||||||||||||||
| Net unrealized holding (losses) gains | (121,603 | ) | 7,932 | (36,670 | ) | 18,780 | ||||||||||
| Deferred income tax benefit (charge) on above | 42,562 | (2,777 | ) | 12,835 | (6,572 | ) | ||||||||||
Reclassification adjustment for (gains) losses included in net income | (34,018 | ) | (22,084 | ) | 9,379 | (13,865 | ) | |||||||||
| Deferred income tax benefit (charge) on above | 11,906 | 7,729 | (3,283 | ) | 4,852 | |||||||||||
| (101,153 | ) | (9,200 | ) | (17,739 | ) | 3,195 | ||||||||||
| Net unrealized currency translation gain (loss), net of tax: | ||||||||||||||||
| Net unrealized currency translation gain (loss) | 36,671 | 24,765 | (54,463 | ) | 16,931 | |||||||||||
| Deferred income tax (charge) benefit on above | (12,835 | ) | (8,668 | ) | 19,062 | (5,926 | ) | |||||||||
| 23,836 | 16,097 | (35,401 | ) | 11,005 | ||||||||||||
| Other comprehensive (loss) income | (77,317 | ) | 6,897 | (53,140 | ) | 14,200 | ||||||||||
| Comprehensive income | $ | 409,824 | $ | 435,049 | $ | 59,384 | $ | 128,997 | ||||||||
| Transatlantic Holdings, Inc. and Subsidiaries | ||||||||||||||
| Consolidated Statistical Supplement | ||||||||||||||
| Supplemental Premium Data: | ||||||||||||||
| Twelve Months Ended | Three Months Ended | |||||||||||||
| December 31, | December 31, | |||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||
| (in thousands) | ||||||||||||||
| Net premiums written by office: | ||||||||||||||
| Domestic | $ | 1,948,045 | $ | 1,751,229 | $ | 465,697 | $ | 441,495 | ||||||
| International: | ||||||||||||||
| Europe: | ||||||||||||||
| London | 813,205 | 744,488 | 212,569 | 188,406 | ||||||||||
| Paris | 344,107 | 314,002 | 86,678 | 69,321 | ||||||||||
| Zurich | 366,724 | 342,650 | 101,013 | 94,590 | ||||||||||
| 1,524,036 | 1,401,140 | 400,260 | 352,317 | |||||||||||
| Other: | ||||||||||||||
| Toronto | 109,639 | 95,506 | 34,218 | 22,198 | ||||||||||
Miami (Latin America and the Caribbean) | 227,510 | 239,058 | 57,107 | 53,871 | ||||||||||
| Hong Kong | 88,474 | 94,035 | 22,648 | 22,108 | ||||||||||
| Tokyo | 55,195 | 52,472 | 21,097 | 18,174 | ||||||||||
| 480,818 | 481,071 | 135,070 | 116,351 | |||||||||||
| Total international | 2,004,854 | 1,882,211 | 535,330 | 468,668 | ||||||||||
| Total net premiums written | $ | 3,952,899 | $ | 3,633,440 | $ | 1,001,027 | $ | 910,163 | ||||||
Net effect of changes in foreign currency exchange rates on the increase in net premiums written in 2007 as compared to 2006: | ||||||||||||||
| Twelve | Three | |||||||||||||
| Months Ended | Months Ended | |||||||||||||
| December 31, | December 31, | |||||||||||||
| Increase in original currency | 6.4 | % |
| 6.3 | % |
| ||||||||
| Foreign exchange effect | 2.4 | 3.7 | ||||||||||||
| Increase as reported in U.S. dollars | 8.8 | % |
| 10.0 | % |
| ||||||||
| Transatlantic Holdings, Inc. and Subsidiaries | ||||||||||||||||
| Consolidated Statistical Supplement | ||||||||||||||||
| Supplemental Premium Data (continued): | ||||||||||||||||
| Other net premiums written data (estimated): | ||||||||||||||||
| Twelve Months Ended | Three Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| Treaty | 96.3 | % |
| 95.3 | % |
| 96.7 | % |
| 95.9 | % | |||||
| Facultative | 3.7 | 4.7 | 3.3 | 4.1 | ||||||||||||
100.0 | % |
| 100.0 | % |
| 100.0 | % |
| 100.0 | % | ||||||
| Property | 29.0 | % |
| 26.7 | % |
| 27.7 | % |
| 26.4 | % | |||||
| Casualty | 71.0 | 73.3 | 72.3 | 73.6 | ||||||||||||
100.0 | % |
| 100.0 | % |
| 100.0 | % |
| 100.0 | % | ||||||
| Total gross premiums written (in thousands) | $ | 4,283,563 | $ | 3,983,417 | $ | 1,068,624 | $ | 969,254 | ||||||||
| Source of gross premiums written: | ||||||||||||||||
| Affiliates | 13.0 | % |
| 14.9 | % |
| 12.2 | % |
| 13.8 | % | |||||
| Other | 87.0 | 85.1 | 87.8 | 86.2 | ||||||||||||
100.0 | % |
| 100.0 | % |
| 100.0 | % |
| 100.0 | % | ||||||
Supplemental Net Loss and Loss Adjustment Expense Reserve Data: | ||||||||||||||||
Changes in net loss and loss adjustment expense reserves: | ||||||||||||||||
| Twelve Months Ended | Three Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| (in millions) | ||||||||||||||||
Reserve for net unpaid losses and loss adjustment expenses at beginning of period | $ | 6,207.2 | $ | 5,690.4 | $ | 6,668.7 | $ | 6,117.9 | ||||||||
Net losses and loss adjustment expenses incurred | 2,638.0 | 2,462.7 | 690.4 | 602.4 | ||||||||||||
| Net losses and loss adjustment expenses paid | 2,102.1 | 2,104.5 | 561.2 | 558.7 | ||||||||||||
| Foreign exchange effect | 156.6 | 158.6 | 101.8 | 45.6 | ||||||||||||
Reserve for net unpaid losses and loss adjustment expenses at end of period | $ | 6,899.7 | $ | 6,207.2 | $ | 6,899.7 | $ | 6,207.2 | ||||||||
| Transatlantic Holdings, Inc. and Subsidiaries | ||||||||||||||||
| Consolidated Statistical Supplement | ||||||||||||||||
| Supplemental Investment Data: | ||||||||||||||||
| Net investment income: | ||||||||||||||||
| Twelve Months Ended | Three Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||
| (in millions) | ||||||||||||||||
| Fixed maturities | $ | 395.8 |
| $354.9 | $ | 104.3 | $ | 92.8 | ||||||||
| Equities | 25.6 | 28.0 | 4.8 | 9.0 | ||||||||||||
Other invested assets (including limited partnerships) | 37.7 | 38.8 | 10.2 | 10.8 | ||||||||||||
| Other | 19.4 | 22.5 | 4.6 | 6.2 | ||||||||||||
| Total investment income | 478.5 | 444.2 | 123.9 | 118.8 | ||||||||||||
| Investment expenses | (8.7 | ) | (9.7 | ) | (1.8 | ) | (1.3 | ) | ||||||||
| Net investment income | $ | 469.8 |
| $434.5 | $ | 122.1 | $ | 117.5 | ||||||||
| Investments by category: | ||||||||||||||||
| December 31, 2007 | ||||||||||||||||
| Amount | Percent | |||||||||||||||
| (dollars in thousands) | ||||||||||||||||
| Fixed maturities: | ||||||||||||||||
| Held to maturity (at amortized cost): | ||||||||||||||||
| Municipalities | $ | 1,249,935 | 9.8 | % |
| |||||||||||
| Available for sale (at fair value): | ||||||||||||||||
| Corporate | 2,060,757 | 16.2 | ||||||||||||||
| U.S. Government and government agencies | 330,838 | 2.6 | ||||||||||||||
| Foreign government | 330,012 | 2.6 | ||||||||||||||
| Municipalities | 5,335,119 | 41.8 | ||||||||||||||
| Asset-backed and collateralized securities | 42,526 | 0.3 | ||||||||||||||
| 8,099,252 | 63.5 | |||||||||||||||
| Total fixed maturities | 9,349,187 | 73.3 | ||||||||||||||
| Equities: | ||||||||||||||||
| Available for sale: | ||||||||||||||||
| Common stocks | 587,373 | 4.6 | ||||||||||||||
| Nonredeemable preferred stocks | 197,870 | 1.5 | ||||||||||||||
| 785,243 | 6.1 | |||||||||||||||
| Trading, principally common stocks | 35,357 | 0.3 | ||||||||||||||
| Total equities | 820,600 | 6.4 | ||||||||||||||
| Other invested assets | 250,921 | 2.0 | ||||||||||||||
| Securities lending collateral | 2,012,031 | 15.8 | ||||||||||||||
| Short-term investments | 67,801 | 0.5 | ||||||||||||||
| Cash and cash equivalents | 255,432 | 2.0 | ||||||||||||||
| Total investments and cash | $ | 12,755,972 | 100.0 | % |
| |||||||||||
Transatlantic Holdings, Inc. and Subsidiaries | ||||||||||||||||||||||||
Consolidated Statistical Supplement | ||||||||||||||||||||||||
Supplemental Investment Data (continued): | ||||||||||||||||||||||||
Fixed maturities portfolio data: | ||||||||||||||||||||||||
Ratings as of December 31, 2007: | ||||||||||||||||||||||||
| Not | |||||||||||||||||||||||
| Aaa | Aa | A | Baa | Rated | Total | |||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||
Held to maturity: | ||||||||||||||||||||||||
Non-asset-backed and collateralized | $ | 1,003 | $ | 202 | $ | 45 | $ | - | $ | - | $ | 1,250 | ||||||||||||
Available for sale: | ||||||||||||||||||||||||
Asset-backed and collateralized: | ||||||||||||||||||||||||
Domestic: | ||||||||||||||||||||||||
Commercial mortgage-backed | 11 | - | - | - | - | 11 | ||||||||||||||||||
Foreign: | ||||||||||||||||||||||||
Commercial mortgage-backed | 5 | - | 11 | 11 | - | 27 | ||||||||||||||||||
Other asset-backed and | ||||||||||||||||||||||||
collateralized | 5 | - | - | - | - | 5 | ||||||||||||||||||
| Total asset-backed and | ||||||||||||||||||||||||
collateralized | 21 | - | 11 | 11 | - | 43 | ||||||||||||||||||
Non-asset-backed and collateralized | 5,122 | 2,531 | 367 | 23 | 13 | 8,056 | ||||||||||||||||||
| Total available for sale | 5,143 | 2,531 | 378 | 34 | 13 | 8,099 | ||||||||||||||||||
Total fixed maturities | $ | 6,146 | $ | 2,733 | $ | 423 | $ | 34 | $ | 13 | $ | 9,349 | ||||||||||||
Percent of total fixed maturities | 65.7 | % | 29.2 | % | 4.5 | % | 0.4 | % | 0.2 | % | 100.0 | % | ||||||||||||
Duration as of December 31, 2007: 5.8 years | ||||||||||||||||||||||||
| Transatlantic Holdings, Inc. and Subsidiaries | ||||||||||||||||||||||||
| Consolidated Statistical Supplement | ||||||||||||||||||||||||
| Supplemental Investment Data (continued): | ||||||||||||||||||||||||
| Fixed maturities portfolio data (continued): | ||||||||||||||||||||||||
| Ratings of municipal bond portfolio as of December 31, 2007 (at amortized cost): | ||||||||||||||||||||||||
| Not | ||||||||||||||||||||||||
| Aaa | Aa | A | Baa | Rated | Total | |||||||||||||||||||
| (dollars in millions) | ||||||||||||||||||||||||
| Uninsured bonds (1): | ||||||||||||||||||||||||
| Amount | $ | 2,018.7 | $ | 1,112.3 | $ | 105.1 | $ | - | $ | - | $ | 3,236.1 | ||||||||||||
| Percent | 62.4 | % | 34.4 | % | 3.2 | % | - | % | - | % | 100.0 | % | ||||||||||||
| Insured bonds (2): | ||||||||||||||||||||||||
| Amount | $ | 3,245.1 | $ | - | $ | - | $ | - | $ | - | $ | 3,245.1 | ||||||||||||
| Percent | 100.0 | % | - | % | - | % | - | % | - | % | 100.0 | % | ||||||||||||
| Underlying ratings of insured bonds (3): | ||||||||||||||||||||||||
| Amount | $ | 180.3 | $ | 2,236.9 | $ | 736.3 | $ | 54.0 | $ | 37.6 | $ | 3,245.1 | ||||||||||||
| Percent | 5.5 | % | 68.9 | % | 22.7 | % | 1.7 | % | 1.2 | % | 100.0 | % | ||||||||||||
Total bonds (with insured ratings) (1) + (2): | ||||||||||||||||||||||||
| Amount | $ | 5,263.8 | $ | 1,112.3 | $ | 105.1 | $ | - | $ | - | $ | 6,481.2 | ||||||||||||
| Percent | 81.2 | % | 17.2 | % | 1.6 | % | - | % | - | % | 100.0 | % | ||||||||||||
Total bonds (with underlying ratings) (1) + (3): | ||||||||||||||||||||||||
| Amount | $ | 2,199.0 | $ | 3,349.2 | $ | 841.4 | $ | 54.0 | $ | 37.6 | $ | 6,481.2 | ||||||||||||
| Percent | 33.9 | % | 51.7 | % | 13.0 | % | 0.8 | % | 0.6 | % | 100.0 | % | ||||||||||||
| Transatlantic Holdings, Inc. and Subsidiaries | |||||||||||||||||||||||||
| Consolidated Statistical Supplement | |||||||||||||||||||||||||
| Supplemental Investment Data (continued): | |||||||||||||||||||||||||
| Securities lending collateral data (a): | |||||||||||||||||||||||||
| Ratings of securities lending collateral as of December 31, 2007: | |||||||||||||||||||||||||
| Not | |||||||||||||||||||||||||
| Aaa | Aa | A | Baa | Rated | Total | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||
| Fixed maturities available for sale: | |||||||||||||||||||||||||
| Asset-backed and collateralized: | |||||||||||||||||||||||||
| Domestic: | |||||||||||||||||||||||||
| Commercial mortgage-backed | $ | 20.3 | $ | - | $ | - | $ | - | $ | - | $ | 20.3 | |||||||||||||
| Residential: | |||||||||||||||||||||||||
| Mortgage-backed: |
|
|
|
|
|
| |||||||||||||||||||
| Alt-A | 173.7 | - | - | - | - | 173.7 | |||||||||||||||||||
| Prime non-agency | 50.1 | - | - | - | - | 50.1 | |||||||||||||||||||
| HELOC (b) | 22.4 | - | - | - | - | 22.4 | |||||||||||||||||||
| Other asset-backed (b) | 29.8 | - | - | - | - | 29.8 | |||||||||||||||||||
| Total domestic | 296.3 | - | - | - | - | 296.3 | |||||||||||||||||||
| Foreign: | |||||||||||||||||||||||||
| Commercial mortgage-backed | 98.0 | 6.9 | - | - | - | 104.9 | |||||||||||||||||||
| Residential: | |||||||||||||||||||||||||
| Mortgage-backed: |
|
|
|
|
|
| |||||||||||||||||||
United Kingdom | 319.2 | 20.8 | - | - | - | 340.0 | |||||||||||||||||||
Australia | 31.5 | - | - | - | - | 31.5 | |||||||||||||||||||
| HELOC | 9.9 | - | - | - | - | 9.9 | |||||||||||||||||||
| Collateralized debt obligations | 17.1 | 4.4 | - | - | - | 21.5 | |||||||||||||||||||
| Other asset-backed (b) | 71.1 | - | - | - | - | 71.1 | |||||||||||||||||||
| Total foreign | 546.8 | 32.1 | - | - | - | 578.9 | |||||||||||||||||||
| Total asset-backed and collateralized | 843.1 | 32.1 | - | - | - | 875.2 | |||||||||||||||||||
| Non-asset-backed and collateralized | 77.6 | 691.8 | 160.5 | 5.6 | 4.6 | 940.1 | |||||||||||||||||||
| Total fixed maturities available for sale | $ | 920.7 | $ | 723.9 | $ | 160.5 | $ | 5.6 | $ | 4.6 | 1,815.3 | ||||||||||||||
Short-term investments and cash and cash equivalents | 196.7 | ||||||||||||||||||||||||
| Total securities lending collateral (c) | $ | 2,012.0 | |||||||||||||||||||||||
Total securities lending collateral invested in fixed maturities available for sale by rating | 50.7 | % | 39.9 | % | 8.8 | % | 0.3 | % | 0.3 | % | 100.0 | % | |||||||||||||
(a) | Information presented herein represents underlying securities included on the Balance Sheet as securities lending collateral. | ||||||||||||||||||||||||
(b) | The ratings of three securities included above as Aaa benefit from insurance. The underlying rating of a domestic HELOC with a fair value of $22.4 million is Ba. The underlying rating of one domestic other asset-backed and collateralized security with a fair value of $18.5 million and one foreign other asset-backed and collateralized security with a fair value of $6.0 million is Aa. | ||||||||||||||||||||||||
(c) | Pre-tax net unrealized depreciation on the securities lending portfolio totals $41.2 million. $26.2 million of such amount relates to asset-backed and collateralized securities and $15.0 million relates to non-asset-backed and collateralized securities. | ||||||||||||||||||||||||
| Duration of fixed maturities available for sale included above as of December 31, 2007: 0.3 years | |||||||||||||||||||||||||
| Transatlantic Holdings, Inc. and Subsidiaries | |||||||||||||||
| Consolidated Statistical Supplement | |||||||||||||||
| Supplemental Investment Data (continued): | |||||||||||||||
| Other investment data: | |||||||||||||||
| Twelve Months Ended | Three Months Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2007 | 2006 | 2007 | 2006 | ||||||||||||
| Pre-tax yield on fixed maturity portfolio (a) | 4.4 | % |
| 4.4 | % |
| 4.5 | % |
| 4.5 | % | ||||
| Effective tax rate on net investment income (b) | 17.0 | % |
| 16.5 | % |
| 17.5 | % |
| 18.0 | % | ||||
| (a) | Represents annualized pre-tax net investment income from fixed maturities (excluding fixed maturities included in securities lending collateral) for the periods indicated divided by the average balance sheet carrying value of the related fixed maturity portfolio for such periods. | ||||||||||||||
| (b) | Represents the portion of income tax expense related to net investment income divided by net investment income. | ||||||||||||||
| Other Data: | |||||||||||||||
| (Estimated) | |||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2007 | 2006 | ||||||||||||||
| (in thousands) | |||||||||||||||
| Statutory surplus of Transatlantic Reinsurance Company | $ | 3,435,000 | $ | 3,059,483 | |||||||||||
CONTACT:
Transatlantic Holdings, Inc., New York
Steven S. Skalicky, 212-770-2040