EMC In­surance an­nounces in­come for fourth quar­ter

The Pak Banker - - COMPANIES/BOSS -

EMC In­surance Group Inc to­day re­ported op­er­at­ing in­come of $12,729,000 ($0.99 per share) for the fourth quar­ter ended De­cem­ber 31, 2012, com­pared to $8,136,000 ($0.63 per share) for the fourth quar­ter of 20111. For the year ended De­cem­ber 31, 2012, op­er­at­ing in­come to­taled $32,755,000 ($2.54 per share), com­pared to an op­er­at­ing loss of $8,784,000 ($0.68 per share) for the same pe­riod in 2011.

Net in­come, in­clud­ing re­al­ized in­vest­ment gains and losses, to­taled $12,998,000 ($1.01 per share) for the fourth quar­ter of 2012, com­pared to $9,999,000 ($0.78 per share) for the fourth quar­ter of 2011. For the year ended De­cem­ber 31, 2012, net in­come to­taled $37,966,000 ($2.95 per share), com­pared to a net loss of $2,737,000 ($0.21 per share) for the same pe­riod in 2011.

We are very pleased with our strong fourth quar­ter and full-year re­sults, stated Bruce G. Kel­ley, Pres­i­dent and Chief Ex­ec­u­tive Of­fi­cer. Rate lev­els con­tin­ued to in­crease on all lines of busi­ness through­out the year, while over­all pol­icy re­ten­tion lev­els re­mained con­sis­tent with past ex­pe­ri­ence. The com­pound­ing ef­fect of the in­creas­ing rate lev­els over the past two years, cou­pled with our rel­a­tively flat loss cost trend for the year, re­sulted in im­proved prof­itabil­ity. We re­main com­mit­ted to our strat­egy of care­ful risk se­lec­tion and ap­pro­pri­ate rate lev­els to build on our cur­rent year re­sults, con­tin­ued Kel­ley.

Pre­mi­ums earned in­creased 4.9 per­cent to $117,271,000 for the fourth quar­ter of 2012, from $111,768,000 for the fourth quar­ter of 2011. For the year ended De­cem­ber 31, 2012, pre­mi­ums earned in­creased 10.2 per­cent to $458,846,000 from $416,402,000 in 2011. In the prop­erty and ca­su­alty in­surance seg­ment, pre­mium in­come in­creased 11.0 per­cent for the year, with the ma­jor­ity of the in­crease at­trib­ut­able to rate level in­creases, growth in in­sured ex­po­sures and an in­crease in re­tained poli­cies. In the rein­sur­ance seg­ment, pre­mium in­come de­clined 14.4 per­cent in the fourth quar­ter, but in­creased 7.3 per­cent for the year. The de­cline for the fourth quar­ter is pri­mar­ily at­trib­uted to a sig­nif­i­cant de­cline in the year-end es­ti­mate of "earned but not re­ported" pre­mi­ums on sev­eral pro rata ac­counts, in­clud­ing the new off­shore en­ergy and li­a­bil­ity ac­count that Em­ploy­ers Mu­tual Ca­su­alty Com­pany be­gan par­tic­i­pat­ing in ef­fec­tive Jan­uary 1, 2012. The in­crease for the year is pri­mar­ily at­trib­uted to rate level in­creases im­ple­mented dur­ing the Jan­uary 1 re­newal sea­son, as well as the new off­shore en­ergy and li­a­bil­ity pro­por­tional ac­count.

The off­shore en­ergy and li­a­bil­ity ac­count gen­er­ated ap­prox­i­mately $12.4 mil­lion of an­nual pre­mi­ums (af­ter the 10.0 per­cent charge for the ex­cess of loss cov­er­age) dur­ing the 2012 un­der­writ­ing year. Since the un­der­ly­ing poli­cies have ef­fec­tive dates through­out the 2012 un­der­writ­ing year, ap­prox­i­mately 48.0 per­cent of this amount was earned dur­ing cal­en­dar year 2012, with the bal­ance to be earned dur­ing cal­en­dar year 2013. An­nual pre­mi­ums for the 2013 un­der­writ­ing year are cur­rently pro­jected to be ap­prox­i­mately $14.0 mil­lion.

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