FREMONT, Mich., Feb. 22, 2011 /PRNewswire/ — Fremont Michigan InsuraCorp, Inc. (OTC Bulletin Board: FMMH), a Michigan-exclusive property and casualty insurance carrier, today announced financial results for the fourth quarter and full year ended Dec. 31, 2010. The Company reported revenues of $17.1 million for the quarter, an increase of 12.8% from the fourth quarter of 2009, reflecting strength in net premiums earned from its product offerings, as well as a substantial increase in realized gains on investments during the quarter.
Highlights for the quarter and full year:
- Net income of $0.14 per diluted share for the quarter, down from $1.07 per diluted share last year, driven by an underwriting loss, partially offset by realized gains on investments
- Combined ratio of 108.6% for the quarter, up from 88.5% in the fourth quarter 2009, resulting from a higher loss and loss adjustment expense ratio across all business lines
- Net income of $1.35 per diluted share for the full year 2010, down from $2.38 last year, as a result of higher underwriting losses and softer investment income partially offset by realized gains
- Combined ratio of 104.4% for the full year, up from 95.0% for 2009
- Book value per share increased to $27.52, up from $26.33 as of Dec. 31, 2009
“The fourth quarter was characterized by a continuation of soft market conditions, increased losses in personal auto and weather events which adversely affected our bottom-line results,” said Richard E. Dunning, President and CEO. “Despite the tough conditions we faced throughout 2010, we remained committed to our disciplined underwriting philosophy. This was a key factor in our ability to outperform our peers and grow our direct premiums written by 12.7%, based on solid gains in new business and renewals that were due in large part to the strong partnerships we maintain with our agents, who ranked us as the third-best carrier in the state for doing business.”
Net income for the quarter ended Dec. 31, 2010 was $0.3 million, or $0.14 per diluted share, compared to $1.9 million, or $1.07 per diluted share, in the fourth quarter of 2009. Fremont generated direct premiums written of $18.7 million during the quarter, compared to $17.2 million the prior year, an increase of 8.8%. Growth in direct premiums written was driven by growth in the personal segment, which increased by $1.5 million, or 12.1%, and the farm segment, which increased by $35,000, or 2.4%.
For the full year, net income was $2.4 million, or $1.35 per diluted share, compared with net income of $4.2 million, or $2.38 per diluted share, in 2009. Revenues for the full year grew 14.2%, to $65.0 million, from $56.9 million a year earlier. For 2010, Fremont generated direct premiums written of $75.3 million, compared to $66.9 million in 2009, an increase of 12.7%. Full-year growth in direct premiums written was the result of growth in the personal segment, which increased by $6.9 million, or 14.3%; the commercial segments, which increased by $1.4 million, or 12.8%; and the farm segment, which increased by $0.2 million, or 3.8%.
Kevin G. Kaastra, Vice President of Finance, added: “The increase in our 2010 combined ratio to 104.4%, compared with 95.0% last year, was driven by an increase in the loss and LAE ratio to 72.7%, which was up from 63.2% a year ago. The increase in the loss and LAE ratio was broadly based, reflecting increases in personal, farm and marine lines. The resulting underwriting loss and its impact on our bottom line results was more than offset by a significant increase in realized gains on investments and net investment income.”
The full earnings release is available here (PDF).