- Gross premiums written increased in 2012: fourth quarter up 37%, full year up 9%
- 2012 fourth quarter and full year net income trail last year
- Management to present at
Bank of America Merrill Lynch2013 Insurance Conference
- Earnings conference call to be held on
February 27, 2013
Gross Premiums Written
The table below summarizes gross premiums written by business component:
|Three Months Ended |
|(Dollars in thousands)|
|Alternative Risk Transfer||$ 91,925||58.6%||$ 62,542||54.6%|
|Specialty Personal Lines||11,353||7.2%||10,644||9.3%|
|Gross premiums written||$ 156,841||100.0%||$ 114,654||100.0%|
|Year Ended |
|(Dollars in thousands)|
|Alternative Risk Transfer||$ 316,114||55.2%||$ 285,352||54.2%|
|Specialty Personal Lines||51,026||8.9%||53,729||10.2%|
|Gross premiums written||$ 573,470||100.0%||$ 526,313||100.0%|
The Company experienced significant top line growth in the 2012 fourth quarter, resulting in an increase of 9% in 2012 full year gross premiums written compared to 2011. Both ART and transportation were up significantly for the 2012 fourth quarter with growth of 47% and 32%, respectively compared to the prior year. 2012 full year gross premiums written for both the ART and transportations components increased 11%, specialty personal lines decreased 5%, and
The 2012 fourth quarter growth in the ART component is attributable primarily to new national account business as well as increasing rates which were partially offset by declines related to certain program business that is in run-off. National account business is comprised of larger entities for which the Company designs customized alternative risk programs. Due to their relative size, new national accounts are often in the pipeline for multiple periods and can cause lumpiness in quarterly gross premiums written.
The transportation component also showed significant growth during the 2012 fourth quarter. Product extensions and rate increases contributed to the growth. Growth in the truck and moving and storage products were the major contributors to the gross premiums written increase for the component in both the 2012 fourth quarter and full year.
The Company has been experiencing rate increases, in the ART, transportation and specialty personal lines components with increasing magnitude throughout 2012, which is expected to continue in 2013.
Net income, determined in accordance with U.S. generally accepted accounting principles (GAAP), includes items that may not be indicative of our ongoing operations. The following table identifies such items and reconciles estimated net income to net income from operations, a non-GAAP financial measure that we believe is a useful tool for investors and analysts in analyzing ongoing operating trends.
|Three Months Ended |
|(In thousands, except per share data)|
|Net after-tax earnings from operations per share, diluted||$ 0.28||$ 0.30||$ 0.57|
|After-tax net realized gain from investments per share, diluted||0.10||0.12||0.05|
| After-tax impact from balance sheet guaranty for ||0.01||0.03||0.01|
|Net income per share, diluted||$ 0.39||$ 0.45||$ 0.63|
|Year Ended |
|Net after-tax earnings from operations per share, diluted||$ 1.51||$ 1.53||$ 1.77|
|After-tax net realized gain from investments per share, diluted||0.20||0.22||0.15|
| After-tax impact from balance sheet guaranty for ||0.01||0.03||(0.10)|
|Net income per share, diluted||$ 1.72||$ 1.78||$ 1.82|
|¹ 2011 results have been retrospectively adjusted for the changes to accounting for deferred policy acquisition costs required under Accounting Standards Update No. 2010-26 ("ASU 2010-26").|
Net after-tax earnings from operations include underwriting income and net investment income. After-tax realized gains from investments and the after-tax impact on underwriting results related to the balance sheet guaranty from the
The Company's net income was adversely impacted by higher claims costs in the 2012 fourth quarter. Specifically, losses incurred from Superstorm Sandy and unfavorable development from prior year claims reduced 2012 fourth quarter net after-tax earnings from operations by approximately
During the 2012 fourth quarter the Company sold investments to fund the special dividend paid to shareholders and to pay a portion of its outstanding debt, which in conjunction with the continued low interest rate environment adversely impacted net investment income for the quarter. The slightly lower net investment income for the 2012 fourth quarter was offset by realized gains of
The Company's management will make a presentation at the upcoming
Earnings Conference Call
The Company will hold a conference call to discuss the 2012 fourth quarter and full year results on
This document, including any information incorporated by reference, contains "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995). All statements, trend analyses and other information contained in this press release relative to markets for our products and trends in our operations or financial results, as well as other statements including words such as "may," "target," "anticipate," "believe," "plan," "estimate," "expect," "intend," "project," and other similar expressions, constitute forward-looking statements. We made these statements based on our plans and current analyses of our business and the insurance industry as a whole. We caution that these statements may and often do vary from actual results and the differences between these statements and actual results can be material. Factors that could contribute to these differences include, among other things: general economic conditions, any weaknesses in the financial markets and other factors, including prevailing interest rate levels and stock and credit market performance which may affect or continue to affect (among other things) our ability to sell our products and to collect amounts due to us, our ability to access capital resources and the costs associated with such access to capital and the market value of our investments; our ability to manage our growth strategy, customer response to new products and marketing initiatives; tax law and accounting changes; increasing competition in the sale of our insurance products and services and the retention of existing customers; changes in legal environment; regulatory changes or actions, including those relating to regulation of the sale, underwriting and pricing of insurance products and services and capital requirements; levels of natural catastrophes, terrorist events, incidents of war and other major losses; adequacy of insurance reserves; and availability of reinsurance and ability of reinsurers to pay their obligations. The forward-looking statements herein are made only as of the date of this document. The Company assumes no obligation to publicly update any forward-looking statements.
An Insurance Experience Built Around You.
Tanya Inama National Interstate Corporation877-837-0339 [email protected]www.natl.com
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