A life reinsurer says it turned a profit in the second quarter but may have significant exposure to the turmoil in the mortgage-backed securities market.
Scottish Re Group Ltd., Hamilton, Bermuda, is reporting $103 million in net income for the latest quarter on $613 million in revenue, up from a net loss of $122 million on $593 million in revenue for the second quarter of 2006.
Scottish Re has been struggling in recent years because of accounting and underwriting problems.
The company recently obtained $600 million in capital from investment entities linked to Massachusetts Mutual Life Insurance Company, Springfield, Mass., and a private equity firm.
Big, one-time tax benefits helped Scottish Re post a net profit for the second quarter, but mortality experience was good in North America, the company says.
Despite recent uncertainty about the company’s finances, Scottish Re suffered no treaty recaptures during the quarter and even managed to win a number of new treaties, the company says.
Paul Goldean, Scottish Re’s outgoing chief executive officer, notes in the company’s earnings release that Scottish Re also has started an effort to revamp its operations and its management team.