SEATTLE–(BUSINESS WIRE)– SeaBright Holdings, Inc. (NYSE: SBX) recently announced results for the third quarter ended September 30, 2011.
For the third quarter of 2011, the Company recorded net income of $1.6 million or $0.07 per diluted share compared to net income of $5.4 million or $0.25 per diluted share for the same period in 2010. Total revenue for the quarter was $70.8 million versus $76.1 million in the year-earlier period. For the third quarter of 2011, net premiums earned were $64.0 million compared to $65.1 million for the same period in 2010. Net realized gains totaled $0.3 million in the third quarter of 2011 compared to $3.9 million recorded in the same period last year. Net realized gains in 2010 resulted from the sale of investment securities in order to realize the Company’s capital loss carry forwards.
For the nine months ended September 30, 2011, the Company recorded a net loss of $13.9 million or $0.66 per diluted share compared to a net loss of $2.5 million or $0.12 per diluted share for the same period in 2010. The reduction was primarily due to a decrease in net realized gains of $13.6 million. Total revenue for the nine months was $203.6 million versus $227.5 million in the year-earlier period. For the first nine months of 2011, net premiums earned were $182.8 million compared to $191.4 million for the same period in 2010. Net realized gains totaled $0.7 million during the first nine months of 2011 compared to $14.3 million recorded in the same period last year.
“In the third quarter, we recorded $2.8 million in adverse development of prior years’ loss reserve estimates primarily attributable to the 2010 accident year,” commented John Pasqualetto, SeaBright’s Chairman, President and Chief Executive Officer. “We continue to focus on profitability improvement through price increases, again gaining double digit increases in California for the quarter, plus implementing enhanced underwriting standards which reflect the loss patterns connected with persistent high unemployment and growing medical cost. In addition, our expense reduction plans are being aggressively implemented and progress is being made toward better results over the longer term.”
The net loss ratio for the third quarter of 2011 was 75.5% compared to 74.8% for the same period in 2010. During the third quarter of 2011, on a pre-tax basis, the Company recognized $2.8 million in adverse development of prior years’ loss reserve estimates. The Company recognized no adverse development in the same period last year.
Total underwriting, acquisition and insurance expenses for the third quarter of 2011 were $18.3 million compared to $17.6 million for the same period in 2010. The net underwriting expense ratio for the third quarter was 28.5% compared to 27.1% in the third quarter of 2010.
The net combined ratio for the third quarter of 2011 was 104.0% compared to 101.9% in the same period in 2010.
Net investment income for the third quarter of 2011 was $5.2 million compared to $5.8 million in the third quarter of 2010.
The net loss ratio for the first nine months of 2011 was 89.5% compared to 90.1% for the same period in 2010. During the first nine months of 2011, on a pre-tax basis, the Company recognized $31.2 million in adverse development of 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 nine months of 2011 were $56.0 million compared to $53.5 million for the same period in 2010. The net underwriting expense ratio for the first nine months of 2011 was 30.6% compared to 27.9% in the same period in 2010.
At September 30, 2011, SeaBright had approximately 1,560 customers compared to approximately 1,670 at September 30, 2010. Customer count in the Company’s core business decreased by approximately 240 year-over-year, while customer count in the program business increased by approximately 130 year-over-year. Average premium size at September 30, 2011 was $256,000 in the core business compared to $230,000 at September 30, 2010 and was $105,000 in the program business compared to $98,000 at September 30, 2010.
At September 30, 2011, the Company had $690.0 million in fixed income securities, none of which were rated below investment grade and 92.0% of which were rated A- or above, excluding the impact of secondary insurance on the municipal bond portfolio. As of September 30, 2011, the Company had $94.4 million in insured municipal bonds and $244.1 million in uninsured municipal bonds.
The full earnings release is available here: SeaBright Holdings Third Quarter and Nine Month 2011 Results
Source: SeaBright Holdings, Inc.