(Source: PrimeNewswire)
PEMBROKE, Bermuda, July 23, 2009 (GLOBE NEWSWIRE) -- IPC Holdings, Ltd. (Nasdaq:IPCR) today reported net income for the quarter ended June 30, 2009 of $173.9 million, or $3.11 per common share, compared to $47.5 million, or $0.78 per common share, for the second quarter of 2008. For the six months ended June 30, 2009 IPC reported net income of $182.1 million, or $3.25 per common share, compared to $134.3 million, or $2.12 per common share, for the first six months of 2008.
Quarter ended Six months ended June 30, June 30, ------------------------ ------------------------ 2009 2008 2009 2008 ----------- ----------- ----------- ----------- (unaudited) (unaudited) (unaudited) (unaudited) (expressed in thousands (expressed in thousands of U.S. dollars, except of U.S. dollars, except per-share amounts) per-share amounts) NET OPERATING INCOME $ 96,490 $ 98,339 $ 140,314 $ 191,162 Net gain (losses) on investments 77,385 (50,889) 41,813 (56,909) ----------- ----------- ----------- ----------- NET INCOME $ 173,875 $ 47,450 $ 182,127 $ 134,253 ----------- ----------- ----------- ----------- Preferred dividend -- 4,330 -- 8,564 ----------- ----------- ----------- ----------- NET INCOME AVAIL- ABLE TO COMMON SHAREHOLDERS $ 173,875 $ 43,120 $ 182,127 $ 125,689 =========== =========== =========== =========== Basic net income available to common share- holders, per common share $ 3.11 $ 0.83 $ 3.26 $ 2.29 Diluted net income per common share $ 3.11 $ 0.78 $ 3.25 $ 2.12 Net operating income per common share (diluted) $ 1.72 $ 1.62 $ 2.51 $ 3.03 Weighted average number of common shares - basic 55,984,116 52,159,646 55,943,928 54,793,624 Weighted average number of common shares - diluted 55,990,946 60,560,764 55,954,235 63,193,486
Non-GAAP Financial Measures:
In addition to the GAAP financial measures set forth herein, IPC Holdings, Ltd. ("IPC" or the "Company") has included certain non-GAAP financial measures in this press release within the meaning of Regulation G as promulgated by the U.S. Securities and Exchange Commission (the "SEC"). "Net operating income" and its per-share equivalent, as used herein, differ from "net income" and its per-share equivalent under GAAP, which the Company believes is the most directly comparable GAAP measure. Net operating income is a common performance measurement which, as calculated by the Company, corresponds to net income excluding net gains and losses on investments. These items are excluded because they are not considered by management to be relevant indicators of the performance of or trends in our business operations, but rather of the investment and credit markets in general. We believe that the presentation of net operating income provides useful information regarding our results of operations because it follows industry practice, is followed closely by securities analysts and rating agencies, and enables investors and securities analysts to make performance comparisons with our peers in the insurance industry. This measure may not, however, be comparable to similarly titled measures used by companies outside of the insurance industry. Investors are cautioned not to place undue reliance on net operating income as a non-GAAP measure in assessing IPC's overall financial performance.
Results of Operations:
For the quarter ended June 30, 2009, our net operating income was $96.5 million, or $1.72 per common share, compared to $98.3 million, or $1.62 per common share for the second quarter of 2008. For the six months ended June 30, 2009, our net operating income was $140.3 million, or $2.51 per common share, compared to $191.2 million, or $3.03 per common share, for the corresponding period in 2008.
Interim President and Chief Executive Officer, John Weale, commented: "The second quarter of 2009 has proven to be another exceptional quarter for IPC, as we benefited from the convergence of continuing improvements in pricing, an absence of significant catastrophe events (with the exception of the tragic loss of the Air France Airbus), and a substantial turnaround in the equity and debt markets. As a result, we have achieved one of the best quarterly results in the Company's sixteen year history. Given the challenges we have faced over the past few months in connection with the terminated amalgamation agreement with Max Capital Group Ltd., as well as the recently announced proposed amalgamation with Validus Holdings, Ltd. ("Validus"), our results are a testament to the loyalty and support of our clients and their brokers, and as importantly, our staff, who have been simply magnificent during difficult and uncertain times. Given our strong performance in the quarter, we are frankly surprised by a recent statement by A.M. Best suggesting a deterioration in our business. We believe the continued strength of our business is clearly evidenced by our results, combined with the number of new client accounts and absence of staff departures since March 2009. Our results, our solid business profile and our strong market relationships are also a tribute to Jim Bryce, who was the main force in the setting up of IPC sixteen years ago, and who led the Company as CEO for the past nine years. Despite his recent, well-deserved retirement, we are fortunate to continue to benefit from his wisdom and experience, as he serves us in a consulting capacity until at least the end of the year. As we work toward completing the announced amalgamation with Validus in the third quarter of 2009, he leaves IPC in a financially strong position."
In the quarter ended June 30, 2009, we wrote gross premiums of $127.5 million, compared to $105.2 million in the second quarter of 2008. We wrote premiums in respect of new business totaling $7.1 million. Premiums from existing business were $23.8 million more in the second quarter of 2009 in comparison to the second quarter of 2008, mostly due to increases in pricing, where contracts saw price increases which were on average between 5% and 15%. Business that was not renewed because of unsatisfactory terms and conditions, or because the cedant did not purchase the protection, totaled $9.4 million. Excess of loss premium adjustments, which are adjustments generally arising from differences between cedants' actual exposure base and the original estimates thereof, were $0.1 million more in the second quarter of 2009 in comparison to the second quarter of 2008. There was a $0.7 million increase in reinstatement premiums in the second quarter of 2009 compared to the second quarter of 2008. For the six months ended June 30, 2009, we wrote gross premiums of $362.2 million, compared to $303.0 million for the corresponding period of 2008. We wrote premiums in respect of new business totaling $26.8 million. Premiums from existing business were $53.6 million more in the first six months of 2009 in comparison to the corresponding period of 2008, mostly due to increases in pricing, as noted above. Business that was not renewed in the six months ended June 30, 2009 because of unsatisfactory terms and conditions, or because the cedant did not purchase the protection, totaled $24.2 million. Excess of loss premium adjustments, which are adjustments generally arising from differences between cedants' actual exposure base and the original estimates thereof, were $1.6 million more in the first six months of 2009 in comparison with the first six months of 2008. There was a $1.4 million increase in reinstatement premiums in the first six months of 2009 compared to the corresponding period of 2008.
In the quarter ended June 30, 2009, we ceded $3.5 million of premiums to our retrocessional facilities, compared with $2.8 million in the second quarter of 2008. The actual contracts ceded are at IPC's underwriters' judgement in optimizing the risk profile of the portfolio, which can cause premiums ceded to vary as a proportion of our gross writings from quarter to quarter. In the first six months of 2009, we ceded $6.6 million to our retrocessional facilities, compared to $4.8 million ceded in the first six months of 2008.
Net premiums earned in the quarter ended June 30, 2009 were $96.2 million, compared to $84.9 million in the second quarter of 2008. This increase is mainly due to the increase in premiums written in the last twelve months, which were 27.9% higher than in the previous corresponding period. For the six months ended June 30, 2009, earned premiums were $194.9 million, compared to $174.6 million in the first six months of 2008, an increase of 12%, which was also due to the increase in premiums written as discussed above.
Net investment income was $21.3 million in the quarter ended June 30, 2009, compared to $23.4 million in the second quarter of 2008.
