SEATTLE–(BUSINESS WIRE)–SeaBright Holdings, Inc. (NYSE: SBX) today announced results for the quarter and year ended December 31, 2010.
For the fourth quarter of 2010, the Company recorded net income of $0.9 million or $0.04 per diluted share compared to a net loss of ($1.4) million or ($0.07) per diluted share for the same period in 2009. Total revenue for the quarter increased 3.0% to $71.0 million versus $69.0 million in the year-earlier period. For the fourth quarter of 2010, net premiums earned were $63.0 million compared to $62.0 million for the same period in 2009, an increase of 1.6%. Net realized gains totaled $1.1 million in the fourth quarter of 2010 and primarily resulted from the sale of investment securities in order to realize the remaining portion of the $15.0 million of capital loss carry forwards that existed at December 31, 2009.
For the year ended December 31, 2010, net loss was ($1.6) million or ($0.08) per diluted share compared to net income of $13.5 million or $0.63 per diluted share in the same period in 2009. Total revenue for the period increased 9.1% to $298.5 million compared to $273.6 million for the same period in 2009. For the year ended December 31, 2010, net premiums earned were $254.3 million compared to $244.4 million for the comparable period in 2009, an increase of 4.0%.
“Clearly, our results for the fourth quarter and for the full year directly reflect the continuation of a difficult operational environment caused by high levels of unemployment, medical cost inflation, and intensely competitive pricing. In the fourth quarter we recorded a small increase in reserve levels attributable to California medical costs. Viewing the entire year, we took prudent action to recognize and manage this challenging environment by implementing innovative changes to our claim model, strengthening loss reserves and seeking price increases, particularly in California, our largest market. I am pleased to report we are achieving positive traction on rates. Pricing will be a major focus throughout the coming year. However, we are seeing soft pricing conditions persist in all of our markets. This will not deter our dedication to improve our bottom line,” commented John Pasqualetto, SeaBright’s Chairman, President and Chief Executive Officer.
The net loss ratio for the fourth quarter of 2010 was 78.9%. During the fourth quarter of 2010, on a pre-tax basis, the Company recognized an increase of approximately $2 million in prior years’ loss reserve estimates.
Total underwriting expenses for the fourth quarter 2010 were $18.8 million compared to $19.0 million for the same period in 2009. The net underwriting expense ratio for the fourth quarter was 29.8% compared to 30.6% in 2009.
The net combined ratio for the fourth quarter of 2010 was 108.7% compared to 112.4% in 2009.
Net investment income for the fourth quarter of 2010 was $5.7 million compared to $5.9 million in 2009.
The net loss ratio was 87.4% for the year ended December 31, 2010 compared to 70.9% in the same period in 2009. For the year ended December 31, 2010, on a pre-tax basis, the Company recognized an increase of approximately $32 million, net of reinsurance, in prior years’ loss reserve estimates, compared to a reduction of $0.2 million in prior years’ loss reserves recognized in the same period of 2009.
Total underwriting expenses for the year ended December 31, 2010 were $72.2 million compared to $73.0 million in the prior year period and the net underwriting expense ratio was 28.3% compared to 29.8% in the same period in 2009.
For the year ended December 31, 2010, the net combined ratio was 115.7% compared to 100.7% for the same period in 2009.
At December 31, 2010, SeaBright had approximately 1,640 customers. This represents an increase of roughly 110 customers from a year earlier, all of which was attributable to growth in the Company’s program business, which includes SeaBright’s small maritime and alternative markets divisions. Customer count in the Company’s core business, which includes everything other than program business, was down 17.4% year-over-year. Average premium sizes at December 31, 2010 were approximately $99,000 in the program business and $237,000 in the core business compared to approximately $100,000 in the program business and $233,000 in the core business at December 31, 2009.
At December 31, 2010, the Company had $673.0 million in fixed income securities, of which none were rated below investment grade and 92% were rated A- or above, excluding the impact of secondary insurance on the municipal bond portfolio. As of December 31, 2010, the Company had $113.2 million in insured municipal bonds and $219.2 million in uninsured municipal bonds.
The full earnings release is available here.
Source: BusinessWire