Meadowbrook Posts 3Q Profit of $2.5 Million

Southfield, Mich.-based carrier Meadowbrook Insurance Group reported a third-quarter profit of $2.5 million, or 9 cents per diluted share, compared to a net loss of $1.9 million, or 6 cents per diluted share for the comparable period in 2002. The company said the increase in net income reflects premium growth in profitable programs, higher fee-for-service revenue, stable reserves, and overall expense management.

During the third quarter, gross written premium increased $25.2 million, or 62.2 percent, to $65.8 million, from $40.6 million in the comparable period in 2002. This increase reflects the anticipated growth from premium rate increases, the conversion of existing controlled programs to the company’s own insurance company subsidiaries, the addition of select new business, and the renewal rights contract announced in November 2002, Meadowbrook said in a statement.

Revenues increased $10.1 million, or 22.8 percent, to $54.5 million in the third quarter of 2003, from $44.4 million for the comparable period in 2002.

Net earned premium increased $8.9 million, or 28.2 percent, to $40.2 million in the third quarter of 2003, from $31.3 million during the same period of 2002. This increase reflects controlled growth in new and existing programs.

Net commissions and fees increased $2.1 million, or 24.8 percent, to $10.8 million in the third quarter of 2003, from $8.7 million during the same period of 2002. This increase includes $3.3 million from new fee-for-service contracts. Partially offsetting this increase is the elimination of $1.4 million in net fees relating to a managed program that has been converted to an insured program in one of the Company’s insurance subsidiaries, those fees are now considered intercompany fees as opposed to managed fees and are eliminated upon financial consolidation.