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HAMILTON, BERMUDA—Flagstone Reinsurance Holdings S.A. on Friday reported net income in the first quarter of 2012 of $39.2 million, compared with a catastrophe-driven net loss of $161.2 million during the same period a year ago.
The Hamilton, Bermuda-based reinsurer's combined ratio improved to 97.5% for the quarter as opposed to 177.6% in the first quarter of 2011.
Other results for the quarter reflected the company's recent restructuring, which saw it sell business units and exit lines of business in order to lower its risk profile. As a result, net written premiums fell 63.5% to $85.3 million for the quarter.
Investment income also dipped to $5.1 million, compared with $9.2 million for the same period in 2011.
“In October 2011, Flagstone announced a strategic business decision to divest its ownership in its Lloyd's and Island Heritage operations,” Flagstone Re CEO David Brown said in a statement. “The company's goal was to free up capital for its core business, substantially reducing risk while retaining acceptable ROE levels, to continue to lower costs and to return to profitability. I am pleased to say that we achieved these goals in the first quarter, and have started 2012 with a return to profitability, despite the ongoing challenging environment in the industry.”
Mr. Brown added that Flagstone Re's improved performance this quarter reflected the benefits of improving rates in its core business, which partially offset the reduction in income as it pared back its risk levels.
“Flagstone continues to make significant progress on its business realignment as it establishes a more nimble, cost-effective and opportunistic business,” he said. “The company remains focused on leveraging the existing strengths in Flagstone's core businesses in order to deliver enhanced value for its shareholders.”