SEATTLE–(BUSINESS WIRE)– SeaBright Holdings, Inc. (NYSE:SBX) today announced results for the second quarter ended June 30, 2011.
For the second quarter of 2011, the Company recorded a net loss of $15.8 million or $0.75 per diluted share compared to a net loss of $15.5 million or $0.74 per diluted share for the same period in 2010, primarily due to the recognition of adverse development of prior years’ loss reserves. Total revenue for the quarter was $69.0 million versus $76.7 million in the year-earlier period. For the second quarter of 2011, net premiums earned were $62.1 million compared to $65.6 million for the same period in 2010. Net realized gains totaled $0.1 million in the second quarter of 2011 compared to $3.9 million recorded in the same period last year.
For the six months ended June 30, 2011, the Company recorded a net loss of $15.6 million or $0.74 per diluted share compared to a net loss of $7.9 million or $0.38 per diluted share for the same period in 2010, primarily due to the recognition of adverse development of prior years’ loss reserves. Total revenue for the six months was $132.8 million versus $151.4 million in the year-earlier period. For the first six months of 2011, net premiums earned were $118.8 million compared to $126.3 million for the same period in 2010. Net realized gains totaled $0.4 million during the first six months of 2011 compared to $10.4 million recorded in the same period last year.
“Our second quarter loss reserve strengthening was caused by the persistence of a difficult claim environment, especially connected with our construction book of business,” noted John Pasqualetto, SeaBright’s Chairman, President and Chief Executive Officer. “The biggest drivers are high unemployment and increased cost of medical services, particularly in connection with our California book of business which continues to be hit hard by the recession. Consistent with prior quarters, we have again raised rates in the second quarter and adopted tougher underwriting standards in that state and implemented claims cost management programs which have demonstrated some initial traction toward improved outcomes. These actions should set the stage for improved results over the longer term.”
The net loss ratio for the second quarter of 2011 was 116.5% compared to 122.3% for the same period in 2010. During the second quarter of 2011, on a pre-tax basis, the Company recognized a net increase of approximately $27.1 million in prior years’ loss reserve estimates compared to $30.6 million recorded in the same period last year.
Total underwriting, acquisition and insurance expenses for the second quarter of 2011 were $19.3 million compared to $17.1 million for the same period in 2010. The net underwriting expense ratio for the second quarter was 31.1% compared to 26.0% in the second quarter of 2010.
The net combined ratio for the second quarter of 2011 was 147.6% compared to 148.3% in the same period in 2010.
Net investment income for the second quarter of 2011 was $5.3 million compared to $5.9 million in the second quarter of 2010.
The net loss ratio for the first six months of 2011 was 97.0% compared to 97.9% for the same period in 2010. During the six months of 2011, on a pre-tax basis, the Company recognized a net increase of approximately $28.4 million in prior years’ loss reserve estimates compared to $30.5 million recorded in the same period last year.
Total underwriting, acquisition and insurance expenses for first six months of 2011 were $37.7 million compared to $35.8 million for the same period in 2010. The net underwriting expense ratio for six months of 2011 was 31.8% compared to 28.4% in the same period in 2010.
At June 30, 2011, SeaBright had nearly 1,600 customers. Customer count in the Company’s core business decreased by 247 year-over-year. Average premium size at June 30, 2011 was approximately $249,000 in the core business compared to $232,000 at June 30, 2010 and was approximately $105,000 compared to $96,000 at June 30, 2010 in the program business.
At June 30, 2011, the Company had $670.4 million in fixed income securities, none of which were rated below investment grade and 91.0% were rated A- or above, excluding the impact of secondary insurance on the municipal bond portfolio. As of June 30, 2011, the Company had $95.8 million in insured municipal bonds and $223.0 million in uninsured municipal bonds.
The complete earnings release can be found here.
Source: SeaBright Holdings, Inc.