Montpelier Re Reports Q4 and Full Year 2012 Results (Excerpt)

HAMILTON, Bermuda – 08 February, 2013 - Montpelier Re Holdings Ltd. (“the Company”; Ticker: MRH.BH; NYSE: MRH), a leading global provider of property catastrophe reinsurance and other specialty lines, has reported its financial results for the fourth quarter and year ended December 31, 2012.

Fully converted book value per common share of $26.14, a 17.0% increase for the full year, including common dividends.

A 46% loss ratio and 81% combined ratio for the full year, which includes $94 million, or 15 points, of net losses incurred as a result of windstorm Sandy.

Fully converted book value per common share was $26.14, a decrease of 1.3% for the fourth quarter and an increase of 17.0% for the full year, each computed after taking into account common share dividends declared during each period.

The operating loss for the quarter was $0.31 per common share ($17 million) and the net loss was $0.48 per common share ($27 million), each expressed after preferred share dividends. The net loss for the quarter includes $3 million of realized and unrealized investment gains, $3 million of net foreign exchange losses and a $10 million loss on early extinguishment of debt.

Despite the loss for the quarter, operating income for the year was $2.58 per common share ($151 million) and net income was $3.67 per common share ($214 million), each expressed after preferred share dividends. Net income for the year includes $82 million of realized and unrealized investment gains, $9 million of net foreign exchange losses and a $10 million loss on early extinguishment of debt.

Net premiums written were up 2% in the quarter, or 19%, when adjusting for reinstatement premiums ($5 million) and the sale of MUSIC ($15 million).

The quarterly result included a $94 million loss (net of reinsurance recoveries and reinstatements) from windstorm Sandy, consistent with our December announcement, which was partially offset by $26 million in prior-year loss reserve development. The combined ratio was 116% for the quarter. The loss ratio and the combined ratio for the full year were 46% and 81%, respectively.

Net investment income for the quarter was $17 million and $67 million for the full year. The total return on the investment portfolio was 0.6% for the quarter and 5.2% for the full year.

Christopher Harris, President and Chief Executive Officer, said, “I am pleased with our performance for the year. Despite windstorm Sandy, we produced 17% growth in fully converted book value per share on the strength of our balanced underwriting portfolio and solid investment results. Both our Bermuda and Lloyd’s underwriting platforms delivered strong profitability.”

“We were also pleased to further expand our underwriting partnerships with the successful launch of the Blue Capital asset management platform in December.”

Mr. Harris continued, “Our underwriting teams executed well during a competitive January renewal season. We expect a modest increase of 1% to 5% for net written premiums in the first quarter of 2013 driven by targeted growth in our property catastrophe and marine portfolios offset by reductions within certain other specialty lines.”

During the fourth quarter the Company repurchased 590,000 common shares at an average price of $22.52 per share ($13 million). During 2012, the Company repurchased 5,981,589 shares at an average price of $20.22 per share ($121 million).

As of December 31, 2012, total shareholders' equity was $1.6 billion and total capital was $2.0 billion. On October 5, 2012, the Company issued $300 million of 10-year senior notes with a 4.7% coupon. The proceeds from this issuance were used to redeem, on November 5, 2012, our then outstanding $228 million 6.125% senior notes due in 2013, with the balance being used for general corporate purposes.

Please refer to Montpelier’s December 31, 2012 Financial Supplement for the full text of this release and more detailed financial information, which is posted on the Company’s website at www.montpelierre.bm.

Montpelier, through its operating subsidiaries, is a premier provider of global property and casualty reinsurance and insurance products. Additional information can be found in Montpelier's public filings with the Securities and Exchange Commission.

Earnings Conference Call:

A telephone replay of the conference call will be available through March 8, 2013 by dialing 1-877-344-7529 (toll-free) or 1-412-317-0088 (international) and entering the passcode 10023494.

Montpelier Re Holdings Ltd.

Investors:

William Pollett, 441-299-7576

SVP, Chief Corporate Development and Strategy Officer and Treasurer

or

Media:

Jeannine Menzies, 441-299-7570

Corporate Affairs Manager