Fremont Michigan InsuraCorp Inc., a Michigan-exclusive property/casualty insurance carrier, reported revenues of $16 million for the second quarter ended June 30, 2010, an increase of 15.6 percent over the second quarter of 2009.
Higher loss and loss adjustment expenses (LAE) ratio relating to personal auto lines were reflected in Fremont’s combined ratio of 108.6 percent for the quarter, up from 98.8 percent in the second quarter 2009. Additionally, the company’s combined ratio rose to 102.5 percent for the first six months of 2010 compared with 101.4 percent for the six months in 2009.
“The second quarter was challenging, driven by a higher frequency and severity of claims in our personal auto line, as well as the adverse role of weather,” said Richard E. Dunning, president and CEO. “Despite the impact of this environment on our results, the foundation of our business remains secure, as we continued to rely on the strength and loyalty of our customers and independent agents to help us grow.”
Net income for the quarter ended June 30, 2010 was $160,000, or $0.09 per diluted share, compared to $585,000, or $0.33 per diluted share, in the 2009 quarter.
Fremont generated direct premiums written of $20.2 million during the quarter, compared to $17.3 million in the 2009 quarter, an increase of 17 percent. Growth in direct premiums written was driven by growth in the personal lines segment, which increased by $2 million, or 16.5 percent, as well as the commercial lines segment, which increased by $917,000, or 33.7 percent.
For the first six months of 2010, net income was $1.2 million, or $0.66 per diluted share, compared with net income of $863,000, or $0.48 per diluted share in the first six months of 2009. Revenues for the first six months grew 12.5 percent, to $30.9 million, from $27.5 million in the year-ago period. For the first half of the year, Fremont generated direct premiums written of $36.3 million, compared to $31.7 million in 2009, an increase of 14. percent.
Kevin G. Kaastra, vice president of Finance, said the company saw “an increase in the loss and LAE ratio to 75.2 percent in the quarter, up from 66.5 percent a year ago. The resulting underwriting loss was offset by net investment income and realized gains on investments, enabling us to remain profitable in the quarter.”
Source: Fremont Michigan InsuraCorp Inc.