Max Capital Group Ltd. (MXGL) said that it expects net operating income for fiscal 2009 to be between $3.40 and $3.70 per share, which implies a net operating return on average shareholders' equity or ROE of between 13.8% and 14.9%. Book value per share is estimated to be between $27.10 and $27.40, versus $22.46 at December 31, 2008 and $26.54 at September 30 2009, a gain in book value per share for the year of approximately 21% to 22%.
For the year 2010, the company expects gross premiums written from its property/casualty operations to total approximately $1.4 billion, representing approximately 5% growth over 2009. New Latin American operation is expected to produce approximately $50 million of gross premiums written in 2010, with the balance of growth coming primarily from the new underwriting teams that joined Max Specialty and Max at Lloyd's in 2009.
The company said that it continues to be focused on a business model that produces a 15% ROE across the cycle. In the softer portion of the cycle and with investment yields at historical lows, Max's ROE for 2009 is expected to exceed 14%. The company's anticipation is that 2010 will continue this trend with an ROE of approximately 13%, with some benefit from share repurchases through the year.
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