Princeton, New Jersey (November 7, 2005)
-- Despite record catastrophe losses in the U.S., American Re Corporation reported third quarter 2005 GAAP net income of $10.9 million, compared to net income of $6.8 million in the third quarter of 2004. At September 30, 2005, the statutory surplus of the Company's reinsurance and insurance subsidiaries was $3.2 billion, compared to $3.4 billion at December 31, 2004.
Gross premiums written for the third quarter of 2005 were $1,078.4 million, a 7.5% decrease from $1,166.0 million in 2004. The Company's GAAP combined ratio for the third quarter was 120.5%, compared to 126.1% in 2004. The accident year combined ratio for the Company's core business units was 131.8% for the third quarter, compared to 116.1% in 2004. Property catastrophe losses contributed 39.2 points to the accident year combined ratio for the Company's core business units, net of recoveries from the property catastrophe cover with Munich Re, compared to 19.8 points in the third quarter of 2004. The core results exclude non-core business operations and corporate retrocessions but include recoveries under the Company's property catastrophe cover with Munich Re. Catastrophe losses included in these results were $412.5 million in 2005, compared to $165.9 million in 2004, prior to the application of any corporate retrocessional programs. For the nine months ended September 30, 2005, the GAAP net loss was $1,345.0 million, compared to net income of $193.7 million in 2004. For the first nine months, gross premiums written were $2,884.7 million, a 10.7% decrease from $3,232.0 million for the same period in 2004 due to American Re's continuous strict adherence to pricing and underwriting discipline. The Company's GAAP combined ratio for the first nine months was 234.9%, compared to 111.3% in 2004. The accident year combined ratio for the Company's core business units was 106.7% through nine months, compared to 104.0% in 2004. Property catastrophe losses contributed 13.5 points to the accident year combined ratio for the Company's core business units, net of recoveries from the property catastrophe cover with Munich Re, compared to 6.7 points in 2004. Year-to-date catastrophe losses were $421.9 million in 2005, compared to $174.1 million in 2004, prior to the application of any corporate retrocessional programs. Also impacting the year-to-date results is the $1,426.5 million addition to the Company's net loss and loss adjustment expense reserves recorded during the second quarter. During the third quarter, the Company successfully executed a comprehensive recapitalization plan with Munich Re that included the expansion of an existing quota share agreement, a $1.1 billion cash capital contribution, conversion to equity capital $1.6 billion of intercompany loans at the holding company level and the execution of a loss portfolio transfer covering all accident years prior to 2002. Commenting on American Re's results, Chairman John Phelan said, “Successful execution of the recapitalization plan once again demonstrates Munich Re's commitment to American Re and the U.S. market. These actions ‘draw a line' under a period of repeated adverse loss development and position American Re to continue to focus on writing profitable business going forward."
American Re Corporation, a member of the Munich Re Group, is one of the leading providers of reinsurance in the United States. Through its subsidiaries, it writes treaty and facultative reinsurance, insurance, and provides related services to insurance companies, other large businesses, government agencies, pools and other self-insurers. The Munich Re Group, whose business also includes primary insurance and asset management, has a preeminent position in the global reinsurance industry. It is headed by Munich Reinsurance Company of Munich, Germany, and includes reinsurance subsidiaries, branches, service companies and liaison offices in more than 60 locations worldwide, serving insurers in more than 160 countries.
# # # |
||||||||
