Des Moines, Iowa-based property/casualty carrier EMC Insurance Group posted a fourth-quarter loss of $489,000, or 4 cents a share, thanks to a $15.4 million hit on adverse developments on prior years’ reserves. The fourth-quarter loss compared to a $6 million gain, or 53 cents a share, in the fourth quarter of 2003. The insurer did record a profit for the year, however, of $13.1 million, or $1.10 a share, compared to $20.3 million, or $1.78 a share, in 2003.
“Our results for 2004 are disappointing,” President and CEO Bruce G. Kelley said in a statement. “We did not anticipate the large amount of adverse development that occurred in the fourth quarter and catastrophe and storm losses remained at an unusually high level due to the active hurricane season. However, our balance sheet is strong and we are well positioned for improved performance in 2005.”
Premiums earned increased 7.6 percent to $90.4 million for the fourth quarter of 2004, up from from $84 million for the fourth quarter of 2003.
For the year, premiums earned increased 4.5 percent to $345.5 million from $330.6 million in 2003 with most of the increase being derived from earlier rate increases. Policy counts for commercial lines business declined about 1 percent in 2004, while personal lines business declined about 10 percent. EMC said most of the decline in the personal lines was a result of efforts to enhance underwriting discipline.
The company’s combined ratio was 110.8 percent in the fourth quarter of 2004, compared to 100.1 percent in the fourth quarter of 2003. For the year, combined ratio was 104.9 percent, compared to 100.2 percent for the 2003.
Topics Profit Loss
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