· Casualty premiums written increased by $18.1 million from 2009 to 2010. This increase is reflected in both the Other Specialty - Treaty and Property and Specialty Individual Risk lines of business,
Montpelier Syndicate 5151 wrote $167.3 million of gross premiums during 2009, which represents a 44% increase over the $116.2 million in gross premiums written during 2008. The increase was primarily generated by Montpelier Syndicate 5151’s U.K.-based underwriters who wrote $119.1 million of gross premiums during 2009, as compared to $79.9 million during 2008. Montpelier Syndicate 5151’s U.S.-based underwriters wrote $48.2 million and $36.3 million of gross premiums during 2009 and 2008, respectively.
During 2009, Montpelier Syndicate 5151 experienced $7.5 million of favorable development on its loss and LAE reserves relating to prior year losses. The primary drivers of the decreases were:
During 2008, Montpelier Syndicate 5151 ceded $5.3 million of reinsurance premiums to Montpelier Bermuda. MUSIC was not a party to any inter-segment reinsurance arrangements during 2008.
Management services for 2008 represented underwriting, risk management, claims management, ceded retrocession agreement management, actuarial and accounting service fees provided to Blue Ocean, while it was in existence.
The following table presents our consolidated net income (expense) from derivative instruments during the years ended December 31, 2010, 2009 and 2008:
In January 2006 we participated in a private placement of $100.0 million of floating rate capital securities (the “Trust Preferred Securities”). The Trust Preferred Securities mature on March 30, 2036, are redeemable at our option at par beginning March 30, 2011, and require quarterly distributions of interest to the holders. The Trust Preferred Securities bear interest at 8.55% per annum through March 30, 2011, and thereafter at a floating rate of 3-month LIBOR plus 380 basis points, reset quarterly.
Our U.K. and Swiss subsidiaries generated $(1.2) million, $4.8 million and $2.9 million of non-U.S. taxable income (loss) for the years ended December 31, 2010, 2009 and 2008, respectively. These non-U.S. subsidiaries incurred $(1.3) million, $1.0 million and $1.0 million in non-U.S. income taxes during the years ended December 31, 2010, 2009 and 2008, respectively.
· we paid $26.2 million in dividends to our common shareholders.
Loss and LAE reserves consist of estimates of future amounts needed to pay claims and related expenses for insured events that have occurred. The process of estimating these reserves involves a considerable degree of judgment and, as of any given date, is inherently uncertain.
For the Variable RSU award cycle from 2008 to 2011, the targeted performance metric was based on a 2008 ROE of 11.22%. At an achieved ROE of 11.22% (our target) we expected to grant approximately 600,000 Variable RSUs to participants, at an achieved ROE of 5.22% (our threshold) we expected to grant no Variable RSUs to participants and at an achieved ROE of 21.22% (our maximum) we expected to grant approximately 1,200,000 Variable RSUs to participants. Throughout the Initial RSU Period, our quarterly Variable RSU accrual for this cycle varied in response to actual year-to-date results achieved and ranged from as many as 594,539 RSUs (as recorded at June 30, 2008) to as little as 169,848 RSUs (as recorded at September 30, 2008). Based on our actual ROE achieved for 2008 of 8.11%, the final number of Variable RSUs granted for the 2008-2011 award cycle was determined to be 296,374 by the Compensation Committee in February 2009 and these awards have been converted to Fixed RSUs.