Odyssey Re posts strong earnings despite storm losses

Fairfax’s Odyssey Re Holdings Corp. (NYSE: ORH) was able to post net income of US$186.9 million, or US$2.71 per share, in 2004, despite losses from the U.S. hurricane season. Earnings did decline from the US$249.2 million, or US$3.59 per share, posted in 2003, a result of storm losses as well as a drop on realized capital gains.
For the fourth quarter of 2004, earnings were US$50.9 million, or US$0.74 per share, up from US$47.6 million, or US$0.69 per share, recorded in the fourth quarter of 2003.
Gross written premiums rose 3.8% for the full-year 2004, to US$2.7 billion from US$2.6 in 2003. This growth came mainly from the U.S. and EuroAsia divisions, the reinsurer reports. Gross written premiums for fourth-quarter 2004 amounted to US$660.8 million, a 3.0% decrease over the US$681.5 million reported in fourth-quarter 2003.
The reinsurer posted a combined ratio of 98.0% in 2004, up from 96.8% in 2003, but improved its underwriting result in the fourth quarter of last year to 95.0% from 95.9% in fourth-quarter 2003.
Net investment results for 2004 were US$278.2 million, down from US$336.9 million in 2003, including a drop in realized capital gains of US$89.2 million year-over-year. Net investment results for the fourth quarter of 2004 were US$60.5 million, a US$1.7 million increase over fourth-quarter 2003, despite a US$3.1 million decline in net realized capital gains over the same comparative period.
“We are pleased to report a 14% increase in stockholders’ equity for the year which follows increases of over 20% for each of the two previous years, says Odyssey Re CEO Andrew A. Barnard. As of December 31, 2004, stockholders’ equity stood at USUS$1.59 billion.
The company paid a cash dividend of US$0.03 per share on December 31, 2004.