Q1 net operating income down more than 13%

Max Capital reported Q1 net income of $36.4m compared to net income of $44.5m for 2009. Net operating income was $40.7m compared to $46.9m.
Chairman and chief executive Marty Becker said: "Where market conditions continue to provide attractive returns, we are well positioned to expand our presence, while scaling back in areas with softer pricing. “As a result, our combined ratios have been maintained at strong levels even as we have decreased gross premiums written.

"Another key factor in the quarter was our relatively low property catastrophe losses. Considering the size of the industry losses for the headline cat events during the first quarter, we believe our estimated losses of approximately $10.0m illustrate our conservative underwriting strategy, which is designed to limit our exposure to property cat events.

"Looking forward, our new Latin America team is firmly establishing itself in the market, and we expect it to make a meaningful contribution to group results before the end of this year.

"Most importantly, our ability to write a broad mix of short- and long-tail product lines from multiple jurisdictions should be further enhanced as a result of our pending merger with Harbor Point, which was approved by Max's and Harbor Point's respective shareholders on April 29.

“Once the closing occurs, the combined entity, which will be branded as Alterra Capital Holdings Limited, will bring together the first-class reinsurance group at Harbor Point with Max's broad base of established underwriting platforms in major insurance markets worldwide.

“We are excited by the many opportunities that the enhanced capital base and scale of Alterra will bring to all of our underwriting platforms.”

Q1 financial highlights (2009 in brackets):

Property and casualty gross premiums written of $370.3m, down $63.4m

Net premiums written of $217.2m, down $52.2m,

Net premiums earned of $193.5m, up $3.7m,

Property and casualty combined ratio of 90.5%, (89.7%)

Property catastrophe event losses of $9.6m ($3.4m)

Net favourable development on prior years' loss reserves of $17.1m, or 8.8 combined ratio points, ($12.3m, or 6.5 combined ratio points)

Net investment income of $48.4m ($40.5m)

Net operating income of $40.7m

Gross premiums written from property and casualty underwriting for the quarter ended March 31, 2010 were $370.3m, generated by the segments as follows:

Insurance $66.4m

Reinsurance $154.9m

US specialty $76.9m

Max at Lloyd's $72.1m.

Segment combined ratios for the first quarter of 2010 were 86.1% for insurance, 92.7% for reinsurance, 98.8% for U.S. specialty and 82.5% for Max at Lloyd's.

Gross premiums written decreased by:

$21.3m or (24.3)% for insurance

$78.1m or (33.5)% for reinsurance

Gross premiums written increased by

$8.1m, or 11.8% for US specialty

$27.9m, or 63.1%, for Max at Lloyd's