Iowa-based Acceptance Insurance Companies Inc. announced a net after-tax loss of $5.2 million, or $0.36 per share, for the three months ended June 30, 2002. This compares with a net after-tax loss of $888,000, or $0.06 per share, for the three months ended June 30, 2001. The company’s net after-tax loss for the six months ended June 30, 2002 was $9.5 million, or $0.66 per share, compared to a net after-tax loss of $4.7 million, or $0.33 per share, for the same period in 2001.
The company’s agricultural segment experienced a net after-tax underwriting loss for the second quarter of 2002 of $263,000, or $0.02 per share, compared with a net after-tax underwriting loss of $110,000, or $0.01 per share, for the three- month period ended June 30, 2001. The company’s property and casualty segment had a net after-tax underwriting loss of $4.2 million, or $0.29 per share, for the three month period ended June 30, 2002, compared with a net after-tax underwriting loss of $2.5 million, or $0.17 per share, for the same period in 2001.
The company’s agricultural segment experienced a net after-tax underwriting loss for the six months ended June 30, 2002 of $2.7 million, or $0.19 per share, compared with a net after-tax underwriting loss of $631,000, or $0.04 per share, for the same period in 2001. The company’s property and casualty segment had a net after-tax underwriting loss of $5.4 million, or $0.37 per share, for the six month period ended June 30, 2002, compared with a net after-tax underwriting loss of $7.7 million, or $0.54 per share, for the same period in 2001. The company’s agricultural segment results for the second quarter of 2002 do not include estimated results from its 2002 multiple peril crop insurance (“MPCI”) operations. The company will include estimated results from its 2002 MPCI operations in its financial statements for the fourth quarter of this year.
Preliminary estimates of MPCI gross premiums indicate a decline from approximately $696 million for the 2001 crop year to approximately $600 million for the 2002 crop year primarily due to planned reductions in certain territories, generally lower base prices for several crops, and a change in the mix of business from Crop Revenue Coverage to Revenue Assurance – Harvest Price Option. Many parts of the country are currently experiencing drought conditions that could have a significant impact on certain sectors of the agriculture economy. The current conditions could impact both the yield and price of many crops insured under MPCI policies issued by the company. Based on currently available data the company expects that after-tax underwriting results from its agricultural segment will be lower than 2001 results. However, the anticipated decrease is subject to significant uncertainty and is inestimable at this time.
The property and casualty results for the three months ended June 30, 2002 included a reserve strengthening of approximately $6.0 million. The prior year reserve development for the three months ended June 30, 2002 is primarily attributable to the general liability and commercial multi-peril lines of business in recent accident years.
Topics Profit Loss Underwriting Agribusiness Property Casualty
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