Canadian Underwriter

Mix of premium growth, investment gains builds Odyssey Re 2003 earnings

February 13, 2004   by Canadian Underwriter

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New York-based Odyssey Re Holdings Corp. (part of Fairfax Financial) saw premium growth of 35%, with progress in all of its four global business segments, to boost net income for 2003. For the year ending December 31, 2003, the reinsurer posted after-tax net income of US$249.2 million, or US$3.83 per share, compared to US$208.2 million, or US$3.20 per share for 2002.
Operating income was US$117.4 million last year, against US$83.0 million the year prior. This came on the back of growth in gross written premiums of 35% to US$2.6 billion in 2003 from US$1.9 billion in 2002. Net earned premiums grew to US$2.0 billion last year, up from US$1.4 billion the year prior.
Net realized investment gains hit US$202.7 million, versus US$135.8 million in 2002. And net investment income was US$134.1 million last year, versus US$123.0 million the year previous.
Overall, the company brought its combined ratio down to 96.8% in 2003 from 99.1% in 2002.
The company saw significant earnings growth in the last quarter of 2003, posting after-tax net income of US$47.6 million, or US$0.73 per common share, versus US$31.3 million, or US$0.48 per common share for the last quarter of 2002. Operating income jumped to US$37.4 million from US$23.3 million during the same comparative period.
Also in the last quarter of 2003, net realized gains were US$15.7 million versus US$12.3 million for fourth quarter 2002. And, net investment income was up to US$43.1 million from US$32.5 million during the same comparative period.
During the fourth quarter, the company was able to bring its combined ratio down to 95.9% from 98.9% the year period.
Stockholders’ equity amounted to US$1.4 billion at the end of 2003, up from 31.6% from 2002 yearend equity of US$1.07 billion.
“In 2003, OdysseyRe has again produced a return on stockholders’ equity in excess of 20%, as we did in 2002,” says , Andrew A. Barnard, president and CEO of Odyssey Re. “We are delighted with the performance of our underwriting operations and investment activity. We expect our strengths will continue to produce solid results in 2004 and beyond.”

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