New York, September 4, 2008. NYMAGIC, INC. (NYSE: NYM) today provided an update on the Company’s investments and operations.
During August, the Company incurred additional realized and unrealized investment losses of approximately $7 million on its preferred stocks, exchange traded funds and mortgage backed securities. As of September 1, 2008 the Company had sold all of its FNMA and FRE preferred stock and all of its exchange traded funds. The Company continues to receive monthly principal reductions arising from prepayments of the mortgages underlying its mortgage backed securities, which have recently been in the range of $500,000 to $1 million per month. Delinquency rates among the mortgages underlying the Company’s mortgage backed securities increased from a range of 7.3% to 28.5% as of July 1, 2008 to a range of 8.3% to 29.3% as of September 1, 2008. Delinquency rates are not the same as loss rates, but are an indication of the potential for some degree of loss in future periods. The Company has not received updates on subordination levels among the mortgages underlying its mortgaged backed securities as of this date, but as of July 1, 2008 those subordination levels ranged from 27% to 51%, and in each case, they were substantially in excess of pool delinquency rates as of that date. As of September 1, 2008 the fair value of the Company’s mortgage backed securities was $82.9 million, which is approximately 62% of original cost.
Based on modeling provided by its reinsurance intermediary, the Company believes that net losses from its Gulf of Mexico platform and drilling vessel exposures attributable to Hurricane Gustav, if any, may be in the order of magnitude of $1 million. The Company noted, however, that it is too early to make any definitive pronouncement about such losses.
The Company also reported that since June 30, 2008 it had repurchased approximately 140,000 shares of its Common Stock, $1 par value, at an average price of approximately $19.25 per share.
Posted on September 04, 2008NYMAGIC, INC. is an insurance holding company whose property and casualty insurance subsidiaries specialize in underwriting ocean marine, inland marine and non-marine liability insurance, and whose agency subsidiaries specialize in establishing markets for such business. The Company maintains offices in New York and Chicago.
Any forward-looking statements concerning the Company’s operations, economic performance and financial condition contained herein, including statements related to the outlook for the Company’s performance and the Company’s ability to pay dividends in 2009 and beyond, are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based upon a number of assumptions and estimates, which inherently are subject to uncertainties and contingencies, many of which are beyond the control of the Company. Some of these assumptions may not materialize and unanticipated events may occur which could cause actual results to differ materially from such statements. These include, but are not limited to, the cyclical nature of the insurance and reinsurance industry, premium rates, the estimation of loss reserves and loss reserve development, net loss retention, the effect of competition, the ability to collect reinsurance recoverables, the availability and cost of reinsurance, changes in the value of the Company’s investment portfolio, changes in the ratings assigned to the Company by rating agencies and other risks and uncertainties as included in the Company’s filings with the Securities and Exchange Commission. These risks could cause actual results for the 2009 year and beyond to differ materially from those expressed in any forward-looking statements made. The Company undertakes no obligation to update publicly or revise any forward-looking statements made.