Employers Holdings, Inc. (EIG) Monday reported a drop in fourth-quarter net income to $19.4 million from $20.1 million in the year-ago quarter. Earnings per share for the quarter were $0.56 compared with $0.51 last year, rising as a result of lower share count.
Consolidated net income before the impact of the LPT deferred reinsurance gain was $15.2 million compared with $15.4 million last year. Earnings per share on this basis was $0.44 compared with $0.39 last year.
On average, 6 analysts polled by Thomson Reuters expected earnings of $0.14 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter grew 22 percent to $138.4 million from $113.3 million in the year-ago quarter. Two Street analysts expected revenues of $114.4 million for the quarter.
Net premiums written for the quarter increased 28.7 percent to $100.8 million from $78.3 million last year.
Realized gains on investments increased to $18.2 million from $9.2 million in the fourth quarter of 2010, largely attributable to the sale of securities associated with the rebalancing of the portfolio.
Net investment income for the quarter dropped to $19.7 million from $20.4 million last year.
Losses and loss adjustment expenses for the quarter increased to $73.7 million from $56.7 million last year, as a result of higher earned premiums, and current accident year provision rate for losses of 77.1 percent compared with 73.5 percent last year.
Underwriting and other operating expenses were $24.4 million compared with $22.9 million last year, primarily as a result of increases in premium taxes and assessments related to increased net premiums earned.
The combined ratio for the quarter was 111.5 percent compared with 107.6 percent last year. Before the impact of the LPT deferred reinsurance gain, the combined ratio was 115.7 percent compared with 113.3 percent last year.
For the full year, net premiums earned of $363.4 million increased 12.9 percent from $321.8 million in the prior year primarily due to increases in policy count. Overall policy count increased 36.2 percent to 60,693 policies.
Total invested assets were $2 billion at December 31, 2011. The company's investment portfolio, which is classified as available-for-sale, consisted of 95 percent fixed maturity securities and 5 percent equity securities at year-end 2011.
President and Chief Executive Officer Douglas Dirks, said," Reflecting on this past year, we are pleased with what we have achieved in terms of reducing our underwriting and other operating expenses and growing premium. By year-end 2011, as a result of the growth initiatives we implemented in mid-2010, we added over 16,000 policies for an increase of 36% in policy count, increased net premiums written by 31% and added over 1,100 agents to our distribution pipeline."
Looking ahead, Dirks added," We expect increases in non-loss operating expenses in 2012 resulting from an accounting change in deferred acquisition costs (DAC) and growth in premiums."
The Reno, Nevada-headquartered company declared a first quarter 2012 dividend of six cents per share, payable on March 26, 2012 to stockholders of record as of March 12, 2012.
EIG closed Monday's regular trade at $18.35, up $0.17 or 0.94%, on the NYSE. Over the past year, the stock traded in a range of $10.73 - $21.00.
by RTT Staff Writer
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