Odyssey Re produces strong 1-Q revenue gain

Odyssey Re Holdings Corp. (TSE: ORH), a subsidiary of the Fairfax group, lifted net taxed income to $56.3 million for the first quarter of 2002, which amounts to earnings of 86c a share. The reinsurer also grew gross revenue by more than 60% to $403.8 million compared with the $251.8 million reported at the end of the first quarter of 2001. Net premiums written rose year-on-year by 58% to $362.8 million.
The company notes that the most recent financial results reflect a change in accounting policy which now includes a “goodwill accounting” consideration. As such, the net taxed income of $56.3 million disclosed by the company for the latest reporting period includes a “negative goodwill” amount of $36.9 million. Odyssey’s net after tax income, excluding the new goodwill accounting standard, came in at $19.4 million for the first quarter of the current financial year, which is equivalent to 30c a share. Pre-tax income (excluding the goodwill standard) clocked in at $29.6 million for the latest reporting period compared with $28.1 million reported for the same period a year prior.
Odyssey CEO Andrew Barnard says the company’s three core markets, the Americas, Euro-Asia and London, all showed strong premium growth over the last three months. The reinsurer’s combined ratio also improved to 98.8% for the latest reporting period against the 103.2% level achieved at the end of the first quarter of 2001. “Our operating strategy during the prolonged soft market focused on positioning Odyssey Re for global opportunities in the best performing classes of business. This strategy, combined with the current significant improvement in rates across many lines of business both domestically and internationally, resulted in our improved profitability and unprecedented growth,” says Barnard.