PXRE Group has announced a net loss before convertible preferred share dividends of $7.2m for Q1 2007
PXRE Group has announced results for the first quarter ended 31 March 2007, including a net loss before convertible preferred share dividends of $7.2m.
Net premiums earned in the first quarter of 2007 decreased 107%, or $82.3m, to negative $5.2m from $77.1m for the same period of 2006.
The negative net premiums earned in the first quarter of 2007 are the result of $3.2m of ceded premiums earned primarily on two multi-year ceded reinsurance treaties, which will be utilised by Peleus Re in future periods, and $2m of adjustments of prior-year reinstatement premiums.
On a fully diluted basis, book value per share decreased during the quarter by $0.11 to $6.30 at 31 March 2007.
Jeffrey Radke, president and chief executive officer, commented, "The most significant events to occur this quarter were the conclusion of our strategic process with the agreement to merge with Argonaut Group and the formation of Peleus Re, our newly established "A-" rated Bermuda platform.
“The merger process is proceeding and we have now made the required regulatory filings with the various state insurance departments and have filed a preliminary registration statement and joint proxy with the Securities & Exchange Commission. We currently expect the merger to close in the third quarter of 2007. Peleus Re has commenced operations and we expect to begin to underwrite a small and controlled book of property reinsurance business during the upcoming June and July renewals."“The net loss before convertible preferred shares for the first quarter of 2007 was largely due to a decrease in net premiums earned, as virtually all of the policies written by the company in 2006 expired as of 31 December 2006 and PXRE did not underwrite any new reinsurance contracts during the first quarter of 2007.
“The decrease in net premiums earned was offset, in part, by a decrease in net losses and loss expenses incurred as the company had no material exposure to catastrophe events in the first quarter of 2007 and experienced $3.2m of favorable reserve development on its prior year reserves for losses and loss expenses.”