SEATTLE– SeaBright Holdings, Inc. (NYSE: SBX) recently announced results for the quarter and year ended December 31, 2011. For the fourth quarter of 2011, the Company recorded a net loss of $0.6 million or $0.03 per basic and diluted share compared to net income of $0.9 million or $0.04 per diluted share for the same period in 2010. Total revenue for the quarter increased 3.6% to $73.5 million versus $71.0 million in the year-earlier period. For the fourth quarter of 2011, net premiums earned increased 6.0% to $66.7 million compared to $63.0 million for the same period in 2010. Net realized gains totaled $0.4 million in the fourth quarter of 2011 compared to $1.1 million recorded in the same period in 2010. 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 year ended December 31, 2011, the Company recorded a net loss of $14.5 million or $0.69 per basic and diluted share compared to net loss of $1.6 million or $0.08 per basic and diluted share for the same period in 2010. The reduction was primarily due to a decrease in net realized gains of $14.4 million. Total revenue for the period was $277.2 million versus $298.4 million in the year-earlier period. For the year ended December 31, 2011, net premiums earned were $249.6 million compared to $254.3 million for the same period in 2010. Net realized gains totaled $1.1 million in 2011 compared to $15.4 million recorded in 2010.
“Our net results in the fourth quarter reflected a relatively stable overall level of prior years’ loss reserves and a prudent increase relating to our current year loss estimates,” commented John Pasqualetto, SeaBright’s Chairman, President and Chief Executive Officer. “While we see the tough recessionary driven claim environment persist, we are also seeing consistent movement upward on rates and, in addition, we are experiencing the benefits of improvements made in both our claims and underwriting operations.”
The net loss ratio for the fourth quarter of 2011 was 80.3% compared to 78.9% for the same period in 2010. During the fourth quarter of 2011, on a pre-tax basis, the Company recognized $0.2 million in net adverse development of prior years’ loss reserve estimates (consisting of $2.9 million of adverse development of direct loss reserves, offset by $2.7 million of favorable development related to ULAE, loss-based assessments and other estimates) compared to $2.1 million in net adverse development for the same period of 2010. The net loss ratio for the fourth quarter 2011 includes the impact of an increase in the current accident year estimated net loss ratio from 62.5% to 65.0%.
Total underwriting, acquisition and insurance expenses for the fourth quarter 2011 were $19.5 million compared to $18.8 million for the same period in 2010. The net underwriting expense ratio for the fourth quarter of 2011 was 29.2% compared to 29.8% in the same period in 2010. The fourth quarter 2011 results include $1.0 million of previously announced severance and office closure costs which were expensed during the quarter.
The net combined ratio for the fourth quarter of 2011 was 109.5% compared to 108.7% for the same period in 2010.
Net investment income for the fourth quarter of 2011 was $5.2 million compared to $5.7 million for the same period in 2010 as a result of lower yields on the investment portfolio.
The net loss ratio was 87.0% for the year ended December 31, 2011 compared to 87.4% for the same period in 2010. For the year ended December 31, 2011, on a pre-tax basis, the Company recognized $31.4 million in adverse development of prior years’ loss reserve estimates, compared to $32.6 million recorded in the same period in 2010.
Total underwriting, acquisition and insurance expenses for the year ended December 31, 2011 were $75.5 million compared to $72.1 million in the prior year period and the net underwriting expense ratio was 30.3% compared to 28.3% for the same period in 2010.
For the year ended December 31, 2011, the net combined ratio was 117.3% compared to 115.7% for the same period in 2010.
At December 31, 2011, SeaBright had approximately 1,500 customers compared to approximately 1,640 at December 31, 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 100 year-over-year. Average premium size at December 31, 2011 was $262,000 in the core business compared to $236,000 at December 31, 2010 and was $101,000 in the program business compared to $100,000 at December 31, 2010.
At December 31, 2011, the Company had $700.3 million in fixed income securities, of which none were rated below investment grade and 91% were rated A- or above, excluding the impact of secondary insurance on the municipal bond portfolio.
The complete earnings release is available here: SeaBright Holdings 4Q and YE 2011 Results
Source: SeaBright/BusinessWire