North Pointe Holdings Corp. Reports Fourth Quarter Results

Southfield, Mich.-based North Pointe Holdings Corporation reported financial results for the fourth quarter ending December 31, 2005.

Fourth quarter results include pre-tax expenses attributable to hurricane losses and related reinstatement charges of $9.4 million and $607,000 of charges due to an anticipated assessment from the Citizens Property Insurance Corporation. These charges amounted to a reduction in net income of $0.73 per diluted share. As a result, the Company reported a net loss in the fourth quarter of $2.8 million, or a loss of $0.31 per diluted share. This compares to net income of $5.2 million, including a $4.0 million one-time gain on the sale of
a business, or $1.06 per diluted share, for the fourth quarter in 2004.

“With Katrina, Wilma and other hurricanes, the insurance industry had a very significant drain on surplus; estimated to be over $50 billion in 2005. North Pointe was significantly impacted as well, yet we posted a meaningful profit for the year,” said James Petcoff, president and chief executive officer. “Our performance reflects our commitment to underwriting profits while delivering outstanding customer service in a challenging year. In spite of record storm activity in the Southeast, North Pointe set an all-time high for gross premiums written, remained profitable, and completed our
initial public offering. We see many opportunities and believe we are poised for future growth.”

Fourth quarter 2005 highlights listed by North Pointe include that gross premiums written for the three months ending Dec. 31, 2005, were $25.4 million compared with $25.0 million for 2004. The slight increase was principally a result of an increase in our commercial lines segment offset by a decline in non-standard automobile premiums, a line which the Company exited in October 2004. Gross premiums written in the commercial lines segment in the fourth quarter were $23.3 million as compared with $22.6 million for the same period in 2004. Total revenues in the fourth quarter of 2005 were $19.6 million, as compared to $25.9 million in the corresponding period in 2004.

The 2005 fourth quarter revenues were reduced by $3.2 million of
reinsurance reinstatement charges resulting from the hurricane losses and the anticipated Citizen’s assessment. The 2004 fourth quarter revenues included a gain on the sale of a business of $4.0 million.

The Company’s loss ratio for the fourth quarter was 74.5 percent as compared with 47.1 percent for the corresponding period in 2004. Losses and reinstatement charges resulting from hurricanes and Citizens’ assessments increased our loss ratio by 40.7 percentage points from 33.8 percent to 74.5 percent An expense ratio of 55.4 percent resulted in a combined ratio for the fourth quarter of 129.9 percent. Included in the fourth quarter catastrophe expenses for 2005 was an after-tax charge of $288,000 attributable to Citizen’s anticipated assessment, net of reinsurance, related to the 2005 and 2004 hurricane seasons.

Source: North Pointe Holdings Corp.

Topics Profit Loss Hurricane