It was the best of times, it was the worst of times. Actually, it was mostly the best of times, at least until another major storm hits.
In the first quarter of 2007, reinsurer RenaissanceRe's
As we saw atMontpelier Re
In the earnings call, management noted that so far, U.S. wind catastrophe pricing looks like it is holding up, albeit down from last year's peak pricing. However, specialty reinsurance was soft, and the company is trying to walk the line between staying disciplined and turning away less attractive, but still adequately priced, business.
All in all, it was a decent quarter. Comparisons with last year are tough, because pricing was at a peak after the 2005 hurricanes. However, most reinsurers are able to make up for a slight softening in this year's pricing by increasing investment income. It's also encouraging that the memories of 2005's shocking catastrophe losses linger and pricing has stayed rational, which should help RenRe have another solid year, absent any major catastrophes.
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Fool contributor Emil Lee is an analyst and a disciple of value investing. He owns shares in Montpelier Re. Emil appreciates your comments, concerns, and complaints. The Motley Fool has a disclosure policy.