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This excerpt taken from the TRH 10-Q filed Aug 8, 2008. Results of Operations, net premiums written decreased in the second quarter of 2008 compared to the second quarter of 2007 and net premiums written for the first six months of 2008 remained level with the first six months of 2007.
Income before income taxes decreased in the second quarter and first six months of 2008 compared to the same 2007 periods primarily due to other-than-temporary impairment write-downs, which are included in realized net capital (losses) gains, partially offset by increases in underwriting profit (loss), reflecting an improved combined ratio. The second quarter of 2008 and 2007 each include net catastrophe costs of $0.7 million relating to catastrophe events occurring in 2005. The first six months of 2008 and 2007 include net catastrophe costs of $2.4 million and $2.9 million, respectively, relating to catastrophe events occurring in 2005. (b) International – Europe (London and Paris branches and TRZ): Revenues for the second quarter of 2008 increased compared to the same 2007 quarter due largely to an increase in net premiums written, net of the change in unearned premiums. Revenues increased in both the London and Paris branches and TRZ, with the London branch representing the largest increase. The increase in International – Europe net premiums written relates largely to the auto liability and credit lines along with relatively minor increases spread among several other lines. Revenues for the first six months of 2008 increased compared to the same 2007 period due largely to an increase in net premiums written, net of the change in unearned premiums, and, to a lesser extent, increased net investment income. Revenues increased in both the London and Paris branches and TRZ, with the London branch representing the largest increase. The increase in International – Europe net premiums written relates largely to the credit, A&H, medical malpractice and boiler and machinery lines. The overall increases in net premiums written in the second quarter and first six month periods were largely due to increases of $29.0 million and $56.1 million resulting from changes in foreign currency exchange rates between the U.S. dollar and the currencies in which premiums were written in the 2008 period as compared to the same prior year period.
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TRANSATLANTIC HOLDINGS, INC. AND SUBSIDIARIES MD&A – CONTINUED JUNE 30, 2008 Income before income taxes in the second quarter of 2008 decreased compared to the same 2007 period due primarily to a decrease in underwriting profit. The decrease in underwriting profit is due largely to a decrease in underwriting profit from the London branch. Income before income taxes in the first six months of 2008 increased compared to the same 2007 period due primarily to increases in underwriting profit and net investment income. The increase in underwriting profit in the 2008 period compared to the same 2007 period is due largely to a decrease in net catastrophe costs in the 2008 period. The second quarter and first six months of 2008 include net catastrophe costs of ($3.3) million and ($4.6) million, respectively, relating to events occurring in 2007 and 2005. The second quarter and first six months of 2007 includes net catastrophe costs of $12.7 million and $50.3 million, respectively, principally relating to Windstorm Kyrill in Europe, floods in the U.K. and storms in Australia. (c) International – Other (Miami (serving Latin America and the Caribbean), Toronto, Hong Kong and Tokyo branches): While net premiums written increased slightly in the second quarter of 2008 compared to the second quarter of 2007, revenues for the second quarter of 2008 decreased compared to the second quarter of 2007 due to a decrease in net premiums earned, principally in the Miami branch. Revenues for the first six months of 2008 were level with the comparable 2007 period as small increases in net premiums earned and net investment income were largely offset by a small increase in realized net capital losses. Net premiums written in the first six months of 2008 increased slightly over the comparable 2007 period as relatively minor increases in several lines were largely offset by a significant decrease in the other liability line. On an original currency basis, net premiums written in the second quarter and first six months of 2008 decreased compared to the same 2007 periods. Changes in foreign currency exchange rates, between the U.S. dollar and the currencies in which premiums were written, increased U.S. dollar basis net premiums written by $7.1 million and $17.6 million in the second quarter and first six month periods, respectively. Income before income taxes in the second quarter of 2008 increased compared to the same 2007 period primarily due to an increase in underwriting profit and a decrease in realized net capital losses. The increase in underwriting profit reflects decreased loss activity in the 2008 period for the Miami, Toronto and Tokyo branches, partially offset by increased loss activity for the Hong Kong branch. Income before income taxes in the first six months of 2008 increased compared to the first six months of 2007 primarily due to increases in underwriting profit and net investment income, partially offset by an increase in realized net capital losses. The increase in underwriting profit reflects decreased loss activity in the 2008 period mainly in the Miami and Toronto branches, partially offset by increased loss activity for the Hong Kong branch. Net catastrophe costs in the second quarter and first six months of 2008 and 2007 were insignificant. |
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