ProCentury Unveils Q2 Report

Ohio-based ProCentury Corporation, a specialty property and casualty insurance holding company, announced financial results for the three and six months ended June 30, 2005.

Highlights from the second quarter of 2005 include the following:

* Net income per diluted share for the second quarter of $0.30.
* Gross premiums written of $55.3 million.
* A combined ratio of 93.9%.

Edward Feighan, ProCentury’s CEO commented, “Our performance, especially our profitability, in the second quarter illustrates why we believe our disciplined underwriting approach works. The current market conditions provide a showcase for the risk selection capabilities of our underwriters. I’m pleased with our profitability and our continued ability to grow. Although top line premium growth prospects are not what they were last year at this time, we continue to see opportunities for responsible growth in our core markets. We believe there are still good growth opportunities in the small commercial market, and we plan to continue along our current path in a smart and disciplined manner.”

ProCentury’s net income for the second quarter of 2005 increased 33.9% to $4.0 million or $0.30 per diluted share from net income of $3.0 million or $0.26 per diluted share for the second quarter of 2004.

The second quarter 2004 per diluted share information is based on the weighted average shares outstanding, which also includes shares as part of the IPO from April 26, 2004 forward.

The combined ratio was 93.9% for the second quarter of 2005 compared to 91.9% for the second quarter of 2004. The second quarter 2005 combined ratio consisted of a loss ratio of 61.8% and an expense ratio of 32.1%. This compares with a loss ratio of 58.6% and expense ratio of 33.3% for the second quarter of 2004.

Gross premiums written increased to $55.3 million for the second quarter of 2005, an increase of 12.9% from $48.9 million for the same period in 2004. Premiums earned were $43.0 million in the second quarter of 2005, up 20.1% compared with $35.8 million in the second quarter of 2004. Investment income for the second quarter of 2005 was $3.5 million, an increase of 45.0% from the investment income of $2.4 million reported for the second quarter of 2004.

For the six months ended June 30, 2005 gross premiums written were $102.9 million, an increase of 12.1% from $91.8 million for the same period in 2004. Premiums earned were $84.5 million for the first six months of 2005, up 24.6% compared with $67.9 million in the first six months of 2004. Investment income for the first six months of 2005 was $6.7 million, an increase of 52.1% from the investment income of $4.4 million reported for the same period in 2004.