Montpelier Re Holdings Ltd. returned to profit for the fourth quarter of 2009, with net income rising to $104.7 million, following a quiet catastrophe season, versus a net loss of $47.7 million for the same period in 2008.

For the year, net income reached $463.5 million compared to a net loss of $145.5 million during 2008, while book value per share was up 7.3 percent for the quarter and 35 percent for the year to $21.14.

Operating return on investments, meanwhile, was 5.5 percent for the quarter and 17.5 percent for the year.

Christopher Harris, president and CEO of Montpelier, said: "The fourth quarter rounds off a record year for the company. For the full year, we produced a 35 percent growth in fully converted book value per share, our primary measure of delivering value to our shareholders, driven by terrific underwriting results and an 11 percent return on our investment portfolio.

"While this is a very satisfying result, we will look to build on this success in 2010 by remaining focused on optimising our use of catastrophe capacity and improving our capital and operating efficiency as the London and US platforms mature."

Montpelier reported operating income of $94 million ($1.12 per share) for the fourth quarter and $271 million ($3.13 per share) for the year ended December 31, 2009.

Realised and unrealised gains on investments, foreign exchange and the gain on early extinguishment of debt, which are included in net income, were $11 million for the quarter and $193 million for the full year.

The combined ratio was 48.7 percent for the quarter and 62.2 percent for the year. The fourth quarter loss ratio was 11.4 percent, which includes 15.7 points ($24 million) in favourable releases from prior years' loss reserves.

The full year loss ratio was 24.2 percent, which includes 13.2 points ($76 million) of favourable prior period loss reserve development.

Net written premiums grew by 28 percent for the quarter compared to the fourth quarter of 2008, excluding the impact of reinstatement premiums, as the result of the conversion of increased opportunities in the company's Lloyd's and US operations.

For the full year, net premiums written increased by 16 percent, excluding the impact of reinstatement premiums, driven by growth in the London and US operations and strong property catastrophe rate levels.

"2009 was a year of several milestones for the company, including Syndicate 5151 generating a full-year profit for the first time," said Mr. Harris. "We also established a significant marine capability in London and launched Paladin, a UK-based specialty MGA platform, both of which will drive growth into 2010 and beyond."

The company repurchased 6,599,038 shares during the full year at an average price of $17.07, of which 5,420,941 shares were repurchased during the fourth quarter at an average price of $17.24 per share. In addition, it bought back a further 1,440,198 shares during January 2010 at an average price per share of $17.33.

Mr. Harris said: "We were active buyers of our shares in the fourth quarter and thus far in 2010. Our total capital is currently at the high end of what we require to support our underwriting plans for 2010, and we continue to consider share repurchases a compelling capital management option."

MONTPELIER Q4 REPORT CARD

Net income: $104.7 million compared to a net loss of $47.7 million in 2008

Combined ratio: 48.7 percent compared to 63.4 percent in 2008

Gross premiums written: $79.1 million compared to $72.6 million in 2008