Odyssey Re net income drops on realized gain dip

Following in the footsteps of parent Fairfax Financial Holding, Odyssey Re Holdings Corp. (NYSE: ORH) saw earnings drop as a result of a massive slide in realized gains in the second quarter ending June 30, 2004.Net income was down to US$59.1 million (US$0.92 per share) for the period compared to US$112.7 million (US$1.74 per share) for the same period a year prior.The biggest factor: net realized gains were down to US$32.4 million for the second quarter of 2004 from US$131 million the year before.Other results were positive, however, with net written premiums up to US$550.0 million from US$542.7 million during the same comparative period. And net investment income up to US$35.1 million from US$26.7 million. At the same time, loss costs did rise, up to US$383.8 million from US$321.7 million the year before. But the company improved its combined ratio to 94.8% for the second quarter of this year, down from 96.4% a year earlier.”We are pleased to report another quarter of strong results,” says CEO Andrew Barnard. “The combination of our opportunistic, disciplined underwriting culture with our value oriented, total return investment approach, has resulted in a return on equity through the first 6 months of 17%. While opportunities for growth are less plentiful than over the last several years, we anticipate that the advantages we enjoy through our diverse operations will continue to provide a strong platform for profitable growth in the future.”For the first six months of 2004, the company posted net income of US$118.0 million (US$1.83 per share), down from US$159.3 million (US$2.46 per share) for the same period in 2003. While the combined ratio for the first half of this year dropped to 94.9% from 97.6% in 2003, net realized gains fell significantly to US$67.3 million from US$169.8 the year before.Net written premiums for the first half of 2004 were up to US$1.10 billion from US$1.03 billion the year prior, and net investment income was also up, to US$70.6 million from US$59.1 million during the same comparative period. Loss costs were also up, however, to US$747.3 million from US$627.5 million, over the same period.