Montpelier Re — Investor Presentation (September 2011)
27 slides from Montpelier Re's investor presentation, Sep 7, 2011
Slide 1: Investor Presentation September 2011
Investor Presentation September 2011
Slide 2: Forward Looking Statements & Safe Harbor
Forward Looking Statements & Safe Harbor Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995: This presentation contains, and Montpelier Re may from time to time make, written or oral “forward-looking” statements within the meaning of the United States federal secu
Slide 3: Investment Highlights
Investment Highlights Leading provider of short-tail reinsurance and other specialty lines Proprietary CATM pricing and risk management tools provide competitive advantage Experienced management team with average of over 20 years market experience Conservative high quality balance sheet Opportunisti
Slide 4: Montpelier Group Overview
Montpelier Group Overview Leading provider of short-tail reinsurance and other specialty lines Majority of products are originated through independent brokers NYSE listed (“MRH”) with a market capitalization of $1.1 billion Total capitalization of $1.95 billion NPW: $632 million 4 Proportional prope
Slide 5: Competitive Positioning
Competitive Positioning Focused on short-tail reinsurance, the most attractively priced segment of the market 5 Source: Company filings, SNL as of 12/31/10. Note: Size of bubbles representative and indicative of Common Equity.
Slide 6: Diversified Underwriting Platforms
Diversified Underwriting Platforms 6
Slide 7: Historical Underwriting Performance
Historical Underwriting Performance Strong underwriting track record 7 Net Premiums Written and GAAP Combined Ratio MRH 5-yr. Avg. Combined Ratio: 71.4% Peer 5-yr. Avg. Combined Ratio: 80.5% ($ in millions) Source SNL, Company disclosures. Peers include: Flagstone, Renaissance, Partner, Platinum, Ev
Slide 8: Operating Performance 2006 to 2010
Operating Performance 2006 to 2010 Average Operating ROE of 14.8% over last 5 years [1] – Operating earnings and ROE is a non-GAAP measure. See Q4 Financial Supplement for more details 8 Hurricanes Ike/Gustav
Slide 9: Creating Shareholder Value
15% annualized growth in fully converted book value per share inclusive of dividends from January 2006 to June 2011 9 Creating Shareholder Value 14.6% CAGR since Dec 2005 [1] [1] – Annualized growth in fully converted tangible book value per share including dividends.
Slide 10: Active Capital Management
Active Capital Management 10 Solid operating results and active capital management have driven shareholder value Capital Management 14.6% CAGR in FCBVPS since December 2005 [1] [1] – Annualized growth in fully converted tangible book value per share including dividends.
Slide 11: Creating Shareholder Value vs. Peers
Creating Shareholder Value vs. Peers Source data – Dowling & Partners - Total value creation (growth in fully converted tangible book value per share including dividends). Strong performance relative to peers 11 Growth in Fully Converted Tangible Book Value per Share, including Dividends January 1st
Slide 12: Strong Transparent Balance Sheet
Strong Transparent Balance Sheet Low reserve, investment and financial leverage Conservative reserving track record Limited exposure to longer-tail reserve volatility Low reinsurance recoverables High quality, low duration investment portfolio No significant intangible assets Strong and transparent
Slide 13: Stable Capital Base
Stable Capital Base ($ in millions) Pristine capital base, balanced capital structure 13 Total Capital at June 30, 2011 of $1,948 million
Slide 14: Reserving Track Record
Reserving Track Record Favorable Prior Year Reserve Development ($m) Prudent reserving track record 14 Annual review of reserve adequacy is performed by an independent actuarial firm
Slide 15: Conservative Investment Portfolio
Conservative Investment Portfolio High quality, liquid investment portfolio 6/30/11 Total: $2,722 million Total cash and invested assets of $2.8bn Short duration, high quality investment portfolio Average portfolio rating of AA (S&P) 3.1 year average duration 93% of portfolio is liquid, high quality
Slide 16: Enterprise Risk Management
Enterprise Risk Management 16 We take risks we understand Property cat leader Focus on short-tail reinsurance We avoid risks we don’t understand Financial guarantee, Finite, Life, Extended warranty Strong risk culture Industry leading Cat models Daily underwriting meetings CEO former CRO and Chief A
Slide 17: Single Event Exposure Management
Single Event Exposure Management Q2 2011 10-Q Disclosure: Estimated average market share across multiple event scenarios Every modeled event is unique No industry-wide set of modeling methodologies and assumptions Significant cat model uncertainty 17 Significant decrease in single event exposures si
Slide 18: 2008 Major Cats as % of Shareholders' Equity
2008 Major Cats as % of 6/08 Shareholders’ Equity Source: Company Data, SNL Estimates for Hurricanes Gustav and Ike as of year end 2009 18 Ike/Gustav losses consistent with initial estimated and internal expectations MRH reserves have remained stable unlike many peers Montpelier Re
Slide 19: 2010 Major Cats as % of Shareholders' Equity
2010 Major Cats as% of 12/09 Shareholders Equity Includes Chile and New Zealand Earthquakes and Queensland Floods Source data: Company Reports, Dowling & Partners, SNL Estimates as of year end 2010 19 Chile/New Zealand losses consistent with initial estimated and internal expectations Losses compare
Slide 20: 2011 Major Cats as % of Shareholders' Equity
2011 Major Cats as% of 12/31 Shareholders Equity 20 Includes Japan and New Zealand Earthquakes and Q2 Tornadoes Source data: Company Reports, Dowling & Partners, SNL Montpelier Re
Slide 21: Recent Developments
S&P affirms A- FSR and upgrades ERM to strong Recent Developments 21 AM Best affirms A- FSR move outlook to positive Torus Renewal Rights Agreement and sidecar capacity $150m of preferred securities raised in May 2011 May 2011 May 2011 August 2011 August 2011
Slide 22: Looking Forward
Looking Forward Nimble underwriting culture – more cycle management flexibility Active capital management – integral part of long-term strategy Focus on growing book value per share 22 Improving market conditions in core lines
Slide 23: Please visit our website for more information
Please visit our website for more information about our company, products and team members: Montpelier Group - www.montpelierre.bm Street Address: Montpelier House, 94 Pitts Bay Road, Pembroke Mailing Address: PO Box HM 2079, Hamilton, Bermuda, HMHX Contact: William Pollett, SVP , Chief Corporate De
Slide 24: Appendix – Balance Sheets
Appendix – Balance Sheets 24 Please see the June 30, 2011 Financial Supplement on the Montpelier Group website (www.montpelierre.bm) for more details, including non-GAAP Financial Measures June 30 Mar 31 Dec 31 Sept 30 June 30 2011 2011 2010 2010 2010 ASSETS Investments, cash and cash equivalents $
Slide 25: Appendix – Income Statements
Appendix – Income Statements 25 Please see the June 30, 2011 Financial Supplement on the Montpelier Group website (www.montpelierre.bm) for more details, including non-GAAP Financial Measures YTD YTD Q2-11 Q1-11 Q4-10 Q3-10 Q2-10 2011 2010 Underwriting revenues Gross insurance and reinsurance premiu
Slide 26: Appendix - Investments
Appendix - Investments 26 Please see the June 30, 2011 Financial Supplement on the Montpelier Group website (www.montpelierre.bm) for more details, including non-GAAP Financial Measures Amortized Fair Fair Fair Composition: Cost Gain Value % Value % Value % Fixed maturities $ 2,297.1 $ 38.5 $ 2,335.
Slide 27: Please visit our website for more information
Please visit our website for more information about our company, products and team members: Montpelier Group - www.montpelierre.bm Street Address: Montpelier House, 94 Pitts Bay Road, Pembroke Mailing Address: PO Box HM 2079, Hamilton, Bermuda, HMHX Investor Contact: William Pollett, SVP , Chief Cor
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