Delaware | 0-15886 | 13-3138397 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
6 International Drive, Rye Brook, New York |
10573 |
|
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
99.1 | Third Quarter Earnings Press Release dated November 3, 2011. |
2
THE NAVIGATORS GROUP, INC. |
||||
By: | /s/ Bruce J. Byrnes | |||
Name: | Bruce J. Byrnes | |||
Title: | Senior Vice President, General Counsel and Secretary |
3
Exhibit No. | Exhibit | |||
99.1 | Third Quarter Earnings Press Release dated November 3, 2011. |
4
6 International Drive | Rye Brook, NY 10573 | |||||||
TEL (914) 933-6000 | FAX (914) 934-2355 |
Contact: | Ciro M. DeFalco Chief Financial Officer (914) 933-6043 cdefalco@navg.com www.navg.com |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
Results of Operations | 2011 | 2010 | Change | 2011 | 2010 | Change | ||||||||||||||||||
Gross written premiums |
$ | 255,318 | $ | 233,638 | 9.3 | % | $ | 830,315 | $ | 757,351 | 9.6 | % | ||||||||||||
Net written premiums |
175,357 | 157,807 | 11.1 | % | 551,796 | 512,129 | 7.7 | % | ||||||||||||||||
Revenues: |
||||||||||||||||||||||||
Net earned premiums |
173,633 | 168,233 | 3.2 | % | 499,888 | 493,773 | 1.2 | % | ||||||||||||||||
Commission income |
||||||||||||||||||||||||
Net investment income |
16,259 | 17,839 | -8.9 | % | 51,072 | 53,664 | -4.8 | % | ||||||||||||||||
Total other-than-temporary impairment losses |
(1,241 | ) | (1,034 | ) | NM | (2,338 | ) | (1,774 | ) | NM | ||||||||||||||
Portion of loss recognized in other comprehensive
income (before tax) |
618 | 365 | 69.3 | % | 941 | 870 | 8.2 | % | ||||||||||||||||
Net other-than-temporary impairment losses
recognized in earnings |
(623 | ) | (669 | ) | NM | (1,397 | ) | (904 | ) | NM | ||||||||||||||
Net realized gains (losses) |
3,238 | 4,521 | -28.4 | % | 4,856 | 21,653 | -77.6 | % | ||||||||||||||||
Other income |
(921 | ) | 2,767 | NM | 643 | 2,938 | -78.1 | % | ||||||||||||||||
Total revenues |
191,586 | 192,691 | -0.6 | % | 555,062 | 571,124 | -2.8 | % | ||||||||||||||||
Expenses: |
||||||||||||||||||||||||
Net losses and loss adjustment expenses |
110,242 | 107,463 | 2.6 | % | 340,893 | 311,133 | 9.6 | % | ||||||||||||||||
Commission expenses |
25,934 | 25,185 | 3.0 | % | 80,164 | 76,178 | 5.2 | % | ||||||||||||||||
Other operating expenses |
34,989 | 34,682 | 0.9 | % | 107,341 | 103,781 | 3.4 | % | ||||||||||||||||
Interest expense |
2,047 | 2,045 | 0.1 | % | 6,140 | 6,133 | 0.1 | % | ||||||||||||||||
Total expenses |
173,212 | 169,375 | 2.3 | % | 534,538 | 497,225 | 7.5 | % | ||||||||||||||||
Income before income taxes |
18,374 | 23,316 | -21.2 | % | 20,524 | 73,899 | -72.2 | % | ||||||||||||||||
Income tax expense (benefit) |
4,476 | 7,091 | -36.9 | % | 5,015 | 21,659 | -76.8 | % | ||||||||||||||||
Net income (loss) |
$ | 13,898 | $ | 16,225 | -14.3 | % | $ | 15,509 | $ | 52,240 | -70.3 | % | ||||||||||||
Per Share Data |
||||||||||||||||||||||||
Net income per common share: |
||||||||||||||||||||||||
Basic |
$ | 0.94 | $ | 1.03 | -8.8 | % | $ | 1.02 | $ | 3.23 | -68.5 | % | ||||||||||||
Diluted |
$ | 0.92 | $ | 1.00 | -8.0 | % | $ | 1.00 | $ | 3.17 | -68.6 | % | ||||||||||||
Average common shares outstanding: |
||||||||||||||||||||||||
Basic |
14,796,309 | 15,779,902 | 15,243,603 | 16,170,493 | ||||||||||||||||||||
Diluted |
15,104,424 | 16,148,990 | 15,569,370 | 16,503,098 | ||||||||||||||||||||
Underwriting Ratios |
||||||||||||||||||||||||
Loss Ratio |
63.5 | % | 63.9 | % | 68.2 | % | 63.0 | % | ||||||||||||||||
Expense Ratio |
35.6 | % | 33.9 | % | 37.4 | % | 35.9 | % | ||||||||||||||||
Combined Ratio |
99.1 | % | 97.8 | % | 105.6 | % | 98.9 | % |
Sept. 30, | June 30, | Sept. 30, | Dec. 31, | |||||||||||||||||||||
Balance Sheet Data | 2011 | 2011 | 2011 | 2010 | ||||||||||||||||||||
Stockholders equity |
$ | 799,455 | $ | 817,919 | -2.3 | % | $ | 799,455 | $ | 829,354 | -3.6 | % | ||||||||||||
Book value per share |
$ | 55.82 | $ | 54.44 | 2.5 | % | $ | 55.82 | $ | 52.68 | 6.0 | % |
September 30, | December 31, | |||||||
2011 | 2010 | |||||||
(unaudited) | ||||||||
ASSETS |
||||||||
Investments and cash: |
||||||||
Fixed maturities, available-for-sale, at fair value (amortized cost: 2011, $1,768,428; 2010, $1,855,598) |
$ | 1,827,973 | $ | 1,882,245 | ||||
Equity securities, available-for-sale, at fair value (cost: 2011, $133,616; 2010, $64,793) |
147,794 | 87,258 | ||||||
Short-term investments, at cost which approximates fair value |
159,549 | 153,057 | ||||||
Cash |
58,935 | 31,768 | ||||||
Total investments and cash |
2,194,251 | 2,154,328 | ||||||
Premiums receivable |
249,834 | 188,368 | ||||||
Prepaid reinsurance premiums |
170,180 | 156,869 | ||||||
Reinsurance recoverable on paid losses |
49,232 | 56,658 | ||||||
Reinsurance recoverable on unpaid losses and loss adjustment expenses |
843,546 | 843,296 | ||||||
Deferred policy acquisition costs |
61,975 | 55,201 | ||||||
Accrued investment income |
14,741 | 15,590 | ||||||
Goodwill and other intangible assets |
6,897 | 6,925 | ||||||
Current income tax receivable, net |
9,817 | 1,054 | ||||||
Deferred income tax, net |
4,250 | 15,141 | ||||||
Other assets |
18,652 | 38,029 | ||||||
Total assets |
$ | 3,623,375 | $ | 3,531,459 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Liabilities: |
||||||||
Reserves for losses and loss adjustment expenses |
$ | 2,044,709 | $ | 1,985,838 | ||||
Unearned premiums |
528,463 | 463,515 | ||||||
Reinsurance balances payable |
113,188 | 105,904 | ||||||
Senior notes |
114,240 | 114,138 | ||||||
Accounts payable and other liabilities |
23,320 | 32,710 | ||||||
Total liabilities |
2,823,920 | 2,702,105 | ||||||
Stockholders equity: |
||||||||
Preferred stock, $.10 par value, authorized 1,000,000 shares, none issued |
| | ||||||
Common stock, $.10 par value, authorized 50,000,000 shares, issued 17,451,233 shares
for 2011 and 17,274,440 shares for 2010 |
1,745 | 1,728 | ||||||
Additional paid-in capital |
324,257 | 312,588 | ||||||
Treasury stock, at cost (3,134,469 shares for 2011 and 1,532,273 shares for 2010) |
(138,611 | ) | (64,935 | ) | ||||
Retained earnings |
555,021 | 539,512 | ||||||
Accumulated other comprehensive income |
57,043 | 40,461 | ||||||
Total stockholders equity |
799,455 | 829,354 | ||||||
Total liabilities and stockholders equity |
$ | 3,623,375 | $ | 3,531,459 | ||||
Three Months | Nine Months | |||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Gross Written Premiums: |
||||||||||||||||||||||||
Insurance Companies: |
||||||||||||||||||||||||
Marine |
$ | 47,141 | $ | 49,406 | -5 | % | $ | 175,812 | $ | 172,136 | 2 | % | ||||||||||||
Property Casualty |
110,975 | 81,351 | 36 | % | 323,994 | 242,494 | 34 | % | ||||||||||||||||
Professional Liability |
33,059 | 32,586 | 1 | % | 84,912 | 97,192 | -13 | % | ||||||||||||||||
191,175 | 163,343 | 17 | % | 584,718 | 511,822 | 14 | % | |||||||||||||||||
Lloyds Operations: |
||||||||||||||||||||||||
Marine |
26,979 | 32,788 | -18 | % | 127,585 | 133,758 | -5 | % | ||||||||||||||||
Property Casualty |
29,682 | 27,687 | 7 | % | 91,106 | 76,768 | 19 | % | ||||||||||||||||
Professional Liability |
7,482 | 9,820 | -24 | % | 26,906 | 35,003 | -23 | % | ||||||||||||||||
64,143 | 70,295 | -9 | % | 245,597 | 245,529 | 0 | % | |||||||||||||||||
Total |
$ | 255,318 | $ | 233,638 | 9 | % | $ | 830,315 | $ | 757,351 | 10 | % | ||||||||||||
Three Months | Nine Months | |||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Net Written Premiums: |
||||||||||||||||||||||||
Insurance Companies: |
||||||||||||||||||||||||
Marine |
$ | 34,180 | $ | 35,546 | -4 | % | $ | 130,200 | $ | 123,702 | 5 | % | ||||||||||||
Property Casualty |
77,056 | 52,677 | 46 | % | 201,978 | 156,674 | 29 | % | ||||||||||||||||
Professional Liability |
24,056 | 19,693 | 22 | % | 57,058 | 60,281 | -5 | % | ||||||||||||||||
135,292 | 107,916 | 25 | % | 389,236 | 340,657 | 14 | % | |||||||||||||||||
Lloyds Operations: |
||||||||||||||||||||||||
Marine |
20,649 | 27,142 | -24 | % | 102,362 | 111,205 | -8 | % | ||||||||||||||||
Property Casualty |
16,296 | 17,414 | -6 | % | 47,364 | 43,049 | 10 | % | ||||||||||||||||
Professional Liability |
3,120 | 5,335 | -42 | % | 12,834 | 17,218 | -25 | % | ||||||||||||||||
40,065 | 49,891 | -20 | % | 162,560 | 171,472 | -5 | % | |||||||||||||||||
Total |
$ | 175,357 | $ | 157,807 | 11 | % | $ | 551,796 | $ | 512,129 | 8 | % | ||||||||||||
Three Months | Nine Months | |||||||||||||||||||||||
2011 | 2010 | Change | 2011 | 2010 | Change | |||||||||||||||||||
Net Earned Premiums: |
||||||||||||||||||||||||
Insurance Companies: |
||||||||||||||||||||||||
Marine |
$ | 41,951 | $ | 41,091 | 2 | % | $ | 124,387 | $ | 122,739 | 1 | % | ||||||||||||
Property Casualty |
58,585 | 50,976 | 15 | % | 156,871 | 152,228 | 3 | % | ||||||||||||||||
Professional Liability |
18,796 | 20,131 | -7 | % | 51,881 | 58,867 | -12 | % | ||||||||||||||||
119,332 | 112,198 | 6 | % | 333,139 | 333,834 | 0 | % | |||||||||||||||||
Lloyds Operations: |
||||||||||||||||||||||||
Marine |
34,510 | 38,254 | -10 | % | 109,222 | 108,541 | 1 | % | ||||||||||||||||
Property Casualty |
15,952 | 12,202 | 31 | % | 44,105 | 34,880 | 26 | % | ||||||||||||||||
Professional Liability |
3,839 | 5,579 | -31 | % | 13,422 | 16,518 | -19 | % | ||||||||||||||||
54,301 | 56,035 | -3 | % | 166,749 | 159,939 | 4 | % | |||||||||||||||||
Total |
$ | 173,633 | $ | 168,233 | 3 | % | $ | 499,888 | $ | 493,773 | 1 | % | ||||||||||||
Insurance | Lloyds | |||||||||||||||
Companies | Operations | Corporate(1) | Total | |||||||||||||
Gross written premiums |
$ | 191,175 | $ | 64,143 | $ | | $ | 255,318 | ||||||||
Net written premiums |
135,292 | 40,065 | | 175,357 | ||||||||||||
Net earned premiums |
119,332 | 54,301 | | 173,633 | ||||||||||||
Net losses and loss adjustment expenses |
(76,755 | ) | (33,487 | ) | | (110,242 | ) | |||||||||
Commission expenses |
(16,514 | ) | (9,953 | ) | 533 | (25,934 | ) | |||||||||
Other operating expenses |
(25,735 | ) | (9,254 | ) | | (34,989 | ) | |||||||||
Other income (expense) |
554 | (942 | ) | (533 | ) | (921 | ) | |||||||||
Underwriting profit (loss) |
882 | 665 | 0 | 1,547 | ||||||||||||
Net investment income |
14,037 | 2,158 | 64 | 16,259 | ||||||||||||
Net realized gains (losses) |
2,809 | (226 | ) | 32 | 2,615 | |||||||||||
Interest expense |
| | (2,047 | ) | (2,047 | ) | ||||||||||
Income (loss) before income taxes |
17,728 | 2,597 | (1,951 | ) | 18,374 | |||||||||||
Income tax expense (benefit) |
4,379 | 780 | (683 | ) | 4,476 | |||||||||||
Net income (loss) |
$ | 13,349 | $ | 1,817 | $ | (1,268 | ) | $ | 13,898 | |||||||
Losses and loss adjustment expenses ratio |
64.3 | % | 61.7 | % | 63.5 | % | ||||||||||
Commission expense ratio |
13.8 | % | 18.3 | % | 14.9 | % | ||||||||||
Other operating expense ratio (2) |
21.2 | % | 18.8 | % | 20.7 | % | ||||||||||
Combined ratio |
99.3 | % | 98.8 | % | 99.1 | % | ||||||||||
(1) | The Corporate segment includes intercompany eliminations. |
|
(2) | The Other operating expense ratio includes Other income (expense). |
Insurance | Lloyds | |||||||||||||||
Companies | Operations | Corporate(1) | Total | |||||||||||||
Gross written premiums |
$ | 163,343 | $ | 70,295 | $ | | $ | 233,638 | ||||||||
Net written premiums |
107,916 | 49,891 | | 157,807 | ||||||||||||
Net earned premiums |
112,198 | 56,035 | | 168,233 | ||||||||||||
Net losses and loss adjustment expenses |
(72,306 | ) | (35,157 | ) | | (107,463 | ) | |||||||||
Commission expenses |
(14,374 | ) | (10,459 | ) | (352 | ) | (25,185 | ) | ||||||||
Other operating expenses |
(26,398 | ) | (8,301 | ) | | (34,699 | ) | |||||||||
Other income (expense) |
1,380 | 1,052 | 352 | 2,784 | ||||||||||||
Underwriting profit (loss) |
500 | 3,170 | | 3,670 | ||||||||||||
Net investment income |
15,736 | 1,982 | 121 | 17,839 | ||||||||||||
Net realized gains (losses) |
4,206 | (354 | ) | | 3,852 | |||||||||||
Interest expense |
| | (2,045 | ) | (2,045 | ) | ||||||||||
Income (loss) before income taxes |
20,442 | 4,798 | (1,924 | ) | 23,316 | |||||||||||
Income tax expense (benefit) |
6,049 | 1,715 | (673 | ) | 7,091 | |||||||||||
Net income (loss) |
$ | 14,393 | $ | 3,083 | $ | (1,251 | ) | $ | 16,225 | |||||||
Losses and loss adjustment expenses ratio |
64.4 | % | 62.7 | % | 63.9 | % | ||||||||||
Commission expense ratio |
12.8 | % | 18.7 | % | 15.0 | % | ||||||||||
Other operating expense ratio (2) |
22.4 | % | 12.9 | % | 18.9 | % | ||||||||||
Combined ratio |
99.6 | % | 94.3 | % | 97.8 | % | ||||||||||
(1) | The Corporate segment includes intercompany eliminations. |
|
(2) | The Other operating expense ratio includes Other income (expense). |
Insurance | Lloyds | |||||||||||||||
Companies | Operations | Corporate(1) | Total | |||||||||||||
Gross written premiums |
$ | 584,718 | $ | 245,597 | $ | | $ | 830,315 | ||||||||
Net written premiums |
389,236 | 162,560 | | 551,796 | ||||||||||||
Net earned premiums |
333,139 | 166,749 | | 499,888 | ||||||||||||
Net losses and loss adjustment expenses |
(228,882 | ) | (112,011 | ) | | (340,893 | ) | |||||||||
Commission expenses |
(45,256 | ) | (36,402 | ) | 1,494 | (80,164 | ) | |||||||||
Other operating expenses |
(79,050 | ) | (28,291 | ) | | (107,341 | ) | |||||||||
Other income (expense) |
2,871 | (734 | ) | (1,494 | ) | 643 | ||||||||||
Underwriting profit (loss) |
(17,178 | ) | (10,689 | ) | 0 | (27,867 | ) | |||||||||
Net investment income |
44,009 | 6,733 | 330 | 51,072 | ||||||||||||
Net realized gains (losses) |
5,664 | (2,409 | ) | 204 | 3,459 | |||||||||||
Interest expense |
| | (6,140 | ) | (6,140 | ) | ||||||||||
Income (loss) before income taxes |
32,495 | (6,365 | ) | (5,606 | ) | 20,524 | ||||||||||
Income tax expense (benefit) |
9,224 | (2,247 | ) | (1,962 | ) | 5,015 | ||||||||||
Net income (loss) |
$ | 23,271 | $ | (4,118 | ) | $ | (3,644 | ) | $ | 15,509 | ||||||
Losses and loss adjustment expenses ratio |
68.7 | % | 67.2 | % | 68.2 | % | ||||||||||
Commission expense ratio |
13.6 | % | 21.8 | % | 16.0 | % | ||||||||||
Other operating expense ratio (2) |
22.9 | % | 17.4 | % | 21.4 | % | ||||||||||
Combined ratio |
105.2 | % | 106.4 | % | 105.6 | % | ||||||||||
(1) | The Corporate segment includes intercompany eliminations. |
|
(2) | The Other operating expense ratio includes Other income (expense). |
Insurance | Lloyds | |||||||||||||||
Companies | Operations | Corporate(1) | Total | |||||||||||||
Gross written premiums |
$ | 511,822 | $ | 245,529 | $ | | $ | 757,351 | ||||||||
Net written premiums |
340,657 | 171,472 | | 512,129 | ||||||||||||
Net earned premiums |
333,834 | 159,939 | | 493,773 | ||||||||||||
Net losses and loss adjustment expenses |
(205,571 | ) | (105,562 | ) | | (311,133 | ) | |||||||||
Commission expenses |
(43,351 | ) | (32,827 | ) | | (76,178 | ) | |||||||||
Other operating expenses |
(79,658 | ) | (24,161 | ) | | (103,819 | ) | |||||||||
Other income (expense) |
289 | 2,687 | | 2,976 | ||||||||||||
Underwriting profit |
5,543 | 76 | | 5,619 | ||||||||||||
Net investment income |
47,040 | 6,179 | 445 | 53,664 | ||||||||||||
Net realized gains (losses) |
20,140 | 378 | 231 | 20,749 | ||||||||||||
Interest expense |
| | (6,133 | ) | (6,133 | ) | ||||||||||
Income (loss) before income taxes |
72,723 | 6,633 | (5,457 | ) | 73,899 | |||||||||||
Income tax expense (benefit) |
21,166 | 2,403 | (1,910 | ) | 21,659 | |||||||||||
Net income (loss) |
$ | 51,557 | $ | 4,230 | $ | (3,547 | ) | $ | 52,240 | |||||||
Losses and loss adjustment expenses ratio |
61.6 | % | 66.0 | % | 63.0 | % | ||||||||||
Commission expense ratio |
13.0 | % | 20.5 | % | 15.4 | % | ||||||||||
Other operating expense ratio (2) |
23.7 | % | 13.5 | % | 20.5 | % | ||||||||||
Combined ratio |
98.3 | % | 100.0 | % | 98.9 | % | ||||||||||
(1) | The Corporate segment includes intercompany eliminations. |
|
(2) | The Other operating expense ratio includes Other income (expense). |
Three Months Ended September 30, 2011 | ||||||||||||||||||||||||||||
Net | Losses | |||||||||||||||||||||||||||
Earned | and LAE | Underwriting | Underwriting | Loss | Expense | Combined | ||||||||||||||||||||||
Premiums | Incurred | Expenses | Profit (Loss) | Ratio | Ratio | Ratio | ||||||||||||||||||||||
Insurance Companies: |
||||||||||||||||||||||||||||
Marine |
$ | 41,951 | $ | 28,082 | $ | 15,054 | $ | (1,185 | ) | 66.9 | % | 35.9 | % | 102.8 | % | |||||||||||||
Property Casualty |
58,585 | 36,272 | 19,605 | 2,708 | 61.9 | % | 33.5 | % | 95.4 | % | ||||||||||||||||||
Professional Liability |
18,796 | 12,401 | 7,036 | (641 | ) | 66.0 | % | 37.4 | % | 103.4 | % | |||||||||||||||||
119,332 | 76,755 | 41,695 | 882 | 64.3 | % | 35.0 | % | 99.3 | % | |||||||||||||||||||
Lloyds Operations |
54,301 | 33,487 | 20,149 | 665 | 61.7 | % | 37.1 | % | 98.8 | % | ||||||||||||||||||
Total |
$ | 173,633 | $ | 110,242 | $ | 61,844 | $ | 1,547 | 63.5 | % | 35.6 | % | 99.1 | % | ||||||||||||||
Three Months Ended September 30, 2010 | ||||||||||||||||||||||||||||
Net | Losses | |||||||||||||||||||||||||||
Earned | and LAE | Underwriting | Underwriting | Loss | Expense | Combined | ||||||||||||||||||||||
Premiums | Incurred | Expenses | Profit (Loss) | Ratio | Ratio | Ratio | ||||||||||||||||||||||
Insurance Companies: |
||||||||||||||||||||||||||||
Marine |
$ | 41,091 | $ | 26,257 | $ | 13,467 | $ | 1,367 | 63.9 | % | 32.8 | % | 96.7 | % | ||||||||||||||
Property Casualty |
50,976 | 32,575 | 18,350 | 51 | 63.9 | % | 36.0 | % | 99.9 | % | ||||||||||||||||||
Professional Liability |
20,131 | 13,474 | 7,575 | (918 | ) | 66.9 | % | 37.7 | % | 104.6 | % | |||||||||||||||||
112,198 | 72,306 | 39,392 | 500 | 64.4 | % | 35.2 | % | 99.6 | % | |||||||||||||||||||
Lloyds Operations |
56,035 | 35,157 | 17,708 | $ | 3,170 | 62.7 | % | 31.6 | % | 94.3 | % | |||||||||||||||||
Total |
$ | 168,233 | $ | 107,463 | $ | 57,100 | $ | 3,670 | 63.9 | % | 33.9 | % | 97.8 | % | ||||||||||||||
Amounts | Loss Ratio | |||||||||||||||
Net Incurred Loss Activity | Sept. 30, | Sept. 30, | Sept. 30, | Sept. 30, | ||||||||||||
For the Three Months Ended: | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Insurance Companies: |
||||||||||||||||
Loss and LAE payments |
$ | 63,475 | $ | 67,343 | 53.2 | % | 60.1 | % | ||||||||
Change in reserves |
13,280 | 4,963 | 11.1 | % | 4.3 | % | ||||||||||
Net incurred loss and LAE |
76,755 | 72,306 | 64.3 | % | 64.4 | % | ||||||||||
Lloyds Operations: |
||||||||||||||||
Loss and LAE payments |
26,168 | 22,572 | 48.2 | % | 40.2 | % | ||||||||||
Change in reserves |
7,319 | 12,585 | 13.5 | % | 22.5 | % | ||||||||||
Net incurred loss and LAE |
33,487 | 35,157 | 61.7 | % | 62.7 | % | ||||||||||
Total |
||||||||||||||||
Loss and LAE payments |
89,643 | 89,915 | 51.6 | % | 53.5 | % | ||||||||||
Change in reserves |
20,599 | 17,548 | 11.9 | % | 10.4 | % | ||||||||||
Net incurred loss and LAE |
$ | 110,242 | $ | 107,463 | 63.5 | % | 63.9 | % | ||||||||
Impact of Prior Years Reserves | Amounts | Loss Ratio Impact | ||||||||||||||
Favorable / (Unfavorable) Development | Sept. 30, | Sept. 30, | Sept. 30, | Sept. 30, | ||||||||||||
For the Three Months Ended: | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Insurance Companies |
$ | 2,144 | $ | 157 | 1.8 | % | 0.1 | % | ||||||||
Lloyds Operations |
(531 | ) | 4,002 | -1.0 | % | 7.1 | % | |||||||||
Total |
$ | 1,613 | $ | 4,159 | 0.9 | % | 2.5 | % | ||||||||
Nine Months Ended September 30, 2011 | ||||||||||||||||||||||||||||
Net | Losses | |||||||||||||||||||||||||||
Earned | and LAE | Underwriting | Underwriting | Loss | Expense | Combined | ||||||||||||||||||||||
Premiums | Incurred | Expenses | Profit (Loss) | Ratio | Ratio | Ratio | ||||||||||||||||||||||
Insurance Companies: |
||||||||||||||||||||||||||||
Marine |
$ | 124,387 | $ | 82,888 | $ | 43,934 | $ | (2,435 | ) | 66.6 | % | 35.4 | % | 102.0 | % | |||||||||||||
Property Casualty |
156,871 | 110,637 | 57,662 | (11,428 | ) | 70.5 | % | 36.8 | % | 107.3 | % | |||||||||||||||||
Professional Liability |
51,881 | 35,357 | 19,839 | (3,315 | ) | 68.2 | % | 38.2 | % | 106.4 | % | |||||||||||||||||
333,139 | 228,882 | 121,435 | (17,178 | ) | 68.7 | % | 36.5 | % | 105.2 | % | ||||||||||||||||||
Lloyds Operations |
166,749 | 112,011 | 65,427 | (10,689 | ) | 67.2 | % | 39.2 | % | 106.4 | % | |||||||||||||||||
Total |
$ | 499,888 | $ | 340,893 | $ | 186,862 | $ | (27,867 | ) | 68.2 | % | 37.4 | % | 105.6 | % | |||||||||||||
Nine Months Ended September 30, 2010 | ||||||||||||||||||||||||||||
Net | Losses | |||||||||||||||||||||||||||
Earned | and LAE | Underwriting | Underwriting | Loss | Expense | Combined | ||||||||||||||||||||||
Premiums | Incurred | Expenses | Profit (Loss) | Ratio | Ratio | Ratio | ||||||||||||||||||||||
Insurance Companies: |
||||||||||||||||||||||||||||
Marine |
$ | 122,739 | $ | 77,911 | $ | 42,566 | $ | 2,262 | 63.5 | % | 34.7 | % | 98.2 | % | ||||||||||||||
Property Casualty |
152,228 | 89,637 | 57,858 | 4,733 | 58.9 | % | 38.0 | % | 96.9 | % | ||||||||||||||||||
Professional Liability |
58,867 | 38,023 | 22,296 | (1,452 | ) | 64.6 | % | 37.9 | % | 102.5 | % | |||||||||||||||||
333,834 | 205,571 | 122,720 | 5,543 | 61.6 | % | 36.7 | % | 98.3 | % | |||||||||||||||||||
Lloyds Operations |
159,939 | 105,562 | 54,301 | $ | 76 | 66.0 | % | 34.0 | % | 100.0 | % | |||||||||||||||||
Total |
$ | 493,773 | $ | 311,133 | $ | 177,021 | $ | 5,619 | 63.0 | % | 35.9 | % | 98.9 | % | ||||||||||||||
Amounts | Loss Ratio | |||||||||||||||||||
Net Incurred Loss Activity | Sept. 30, | Sept. 30, | Sept. 30, | Sept. 30, | ||||||||||||||||
For the Nine Months Ended: | 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
Insurance Companies: |
||||||||||||||||||||
Loss and LAE payments |
$ | 207,446 | $ | 208,114 | 62.3 | % | 62.4 | % | ||||||||||||
Change in reserves |
21,436 | (2,543 | ) | 6.4 | % | -0.8 | % | |||||||||||||
Net incurred loss and LAE |
228,882 | 205,571 | 68.7 | % | 61.6 | % | ||||||||||||||
Lloyds Operations: |
||||||||||||||||||||
Loss and LAE payments |
74,826 | 79,431 | 44.9 | % | 49.7 | % | ||||||||||||||
Change in reserves |
37,185 | 26,131 | 22.3 | % | 16.3 | % | ||||||||||||||
Net incurred loss and LAE |
112,011 | 105,562 | 67.2 | % | 66.0 | % | ||||||||||||||
Total |
||||||||||||||||||||
Loss and LAE payments |
282,272 | 287,545 | 56.5 | % | 58.2 | % | ||||||||||||||
Change in reserves |
58,621 | 23,588 | 11.7 | % | 4.8 | % | ||||||||||||||
Net incurred loss and LAE |
$ | 340,893 | $ | 311,133 | 68.2 | % | 63.0 | % | ||||||||||||
Impact of Prior Years Reserves | Amounts | Loss Ratio Impact | ||||||||||||||
Favorable / (Unfavorable) Development | Sept. 30, | Sept. 30, | Sept. 30, | Sept. 30, | ||||||||||||
For the Nine Months Ended: | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Insurance Companies |
$ | 1,059 | $ | 5,654 | 0.3 | % | 1.7 | % | ||||||||
Lloyds Operations |
(3,694 | ) | 5,001 | -2.2 | % | 3.1 | % | |||||||||
Total |
$ | (2,635 | ) | $ | 10,655 | -0.5 | % | 2.2 | % | |||||||
Case | IBNR | |||||||||||
Net Loss Reserves, September 30, 2011: | Reserves | Reserves | Total | |||||||||
Insurance Companies: |
||||||||||||
Marine |
$ | 124,589 | $ | 117,209 | $ | 241,798 | ||||||
Property Casualty |
163,732 | 309,296 | 473,028 | |||||||||
Professional Liability |
52,692 | 62,344 | 115,036 | |||||||||
Total Insurance Companies |
341,013 | 488,849 | 829,862 | |||||||||
Lloyds Operations: |
||||||||||||
Marine |
122,941 | 123,825 | 246,766 | |||||||||
Property Casualty |
38,464 | 29,050 | 67,514 | |||||||||
Professional Liability |
12,308 | 44,713 | 57,021 | |||||||||
Total Lloyds Operations |
173,713 | 197,588 | 371,301 | |||||||||
Total Net Loss Reserves |
$ | 514,726 | $ | 686,437 | $ | 1,201,163 | ||||||
Case | IBNR | |||||||||||
Net Loss Reserves, December 31, 2010: | Reserves | Reserves | Total | |||||||||
Insurance Companies: |
||||||||||||
Marine |
$ | 107,147 | $ | 109,361 | $ | 216,508 | ||||||
Property Casualty |
158,740 | 308,613 | 467,353 | |||||||||
Professional Liability |
46,096 | 78,469 | 124,565 | |||||||||
Total Insurance Companies |
311,983 | 496,443 | 808,426 | |||||||||
Lloyds Operations: |
||||||||||||
Marine |
111,914 | 112,708 | 224,622 | |||||||||
Property Casualty |
30,327 | 29,792 | 60,119 | |||||||||
Professional Liability |
9,904 | 39,471 | 49,375 | |||||||||
Total Lloyds Operations |
152,145 | 181,971 | 334,116 | |||||||||
Total Net Loss Reserves |
$ | 464,128 | $ | 678,414 | $ | 1,142,542 | ||||||
Gross | Gross | Cost or | OTTI | |||||||||||||||||
Fair | Unrealized | Unrealized | Amortized | Recognized | ||||||||||||||||
September 30, 2011 | Value | Gains | (Losses) | Cost | in OCI | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
Fixed maturities: |
||||||||||||||||||||
U.S. Government Treasury bonds,
agency bonds and foreign government bonds |
$ | 301,757 | $ | 8,656 | $ | (487 | ) | $ | 293,588 | $ | | |||||||||
States, municipalities and political
subdivisions |
386,167 | 23,394 | (195 | ) | 362,968 | | ||||||||||||||
Mortgage- and asset-backed securities: |
||||||||||||||||||||
Agency mortgage-backed securities |
377,465 | 16,932 | (20 | ) | 360,553 | | ||||||||||||||
Residential mortgage obligations |
24,525 | 30 | (2,232 | ) | 26,727 | (1,260 | ) | |||||||||||||
Asset-backed securities |
49,915 | 779 | (86 | ) | 49,222 | | ||||||||||||||
Commercial mortgage-backed securities |
215,033 | 6,673 | (909 | ) | 209,269 | | ||||||||||||||
Subtotal |
666,938 | 24,414 | (3,247 | ) | 645,771 | (1,260 | ) | |||||||||||||
Corporate bonds |
473,111 | 15,008 | (7,998 | ) | 466,101 | | ||||||||||||||
Total fixed maturities |
1,827,973 | 71,472 | (11,927 | ) | 1,768,428 | (1,260 | ) | |||||||||||||
Equity securities common stocks |
147,794 | 18,597 | (4,419 | ) | 133,616 | | ||||||||||||||
Cash |
58,935 | | | 58,935 | | |||||||||||||||
Short-term investments |
159,549 | | | 159,549 | | |||||||||||||||
Total |
$ | 2,194,251 | $ | 90,069 | $ | (16,346 | ) | $ | 2,120,528 | $ | (1,260 | ) | ||||||||
Gross | Gross | Cost or | ||||||||||||||
Fair | Unrealized | Unrealized | Amortized | |||||||||||||
Agency mortgage-backed securities: | Value | Gains | (Losses) | Cost | ||||||||||||
GNMA |
$ | 121,051 | $ | 6,773 | $ | | $ | 114,278 | ||||||||
FNMA |
184,047 | 7,971 | (20 | ) | 176,096 | |||||||||||
FHLMC |
72,367 | 2,188 | | 70,179 | ||||||||||||
Total |
$ | 377,465 | $ | 16,932 | $ | (20 | ) | $ | 360,553 | |||||||
Gross | Gross | Cost or | ||||||||||||||
Fair | Unrealized | Unrealized | Amortized | |||||||||||||
Residential mortgage obligations: | Value | Gains | (Losses) | Cost | ||||||||||||
Prime |
$ | 13,925 | $ | 30 | $ | (1,740 | ) | $ | 15,635 | |||||||
Alt-A |
2,106 | | (467 | ) | 2,573 | |||||||||||
Subprime |
| | | | ||||||||||||
Non-US RMBS |
8,494 | | (25 | ) | 8,519 | |||||||||||
Total |
$ | 24,525 | $ | 30 | $ | (2,232 | ) | $ | 26,727 | |||||||
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