United Insurance Holdings Corp., a property and casualty insurance holding company, today reported its financial results for the second quarter and for the six months ended June 30, 2010.
For the second quarter, United returned to profitability from a loss in the first quarter. The Florida-based company reported net income of $195,000, or $0.02 per diluted share, compared to recording net income of $2.8 million, or $0.27 per diluted share, during the same period last year.
For the six months ended June 30, 2010, United reported a net loss of $3.5 million, or $0.33 per diluted share, compared to generating net income of $6.0 million, or $0.57 per diluted share, for the same period last year.
Don Cronin, United’s CEO, stated, “While our industry is still being affected by a difficult rate and cost environment, we were pleased to return to profitability in the second quarter. Over the past eight months, we implemented two rate increases that will continue to have a greater impact on our results as we write new policies and renew existing policies.”
On July 1, 2010, the company’s subsidiary, United Property & Casualty Insurance Company, assumed a $5.3 million book of business in South Carolina from Sunshine State Insurance Company and began writing new business through approximately 80 agents throughout the state. United intends to submit applications to write property and casualty insurance in the following states in 2010: Massachusetts, Connecticut, Rhode Island, New York, North Carolina and New Jersey. The company believes that its products particularly fit the needs of homeowners in these regions of the United States, United said in a news release.
During the quarter, United also continued to reduce its outstanding debt by retiring its $18.3 million, 11% Merger Notes that were due to mature on September 29, 2011. The Company took a $726,000 charge on the early debt retirement; however, the debt retirement is expected to improve net income by approximately $400,000 and $1 million in 2010 and 2011, respectively. In addition to the early debt retirement, the Company paid its $4.3 million note payable to Columbus Bank & Trust (CB&T) in full when it matured on February 20, 2010. The Company’s long-term debt was $18.8 million at June 30, 2010, a 55% reduction from $41.4 million at December 31, 2009.
On June 1, 2010, United entered into new reinsurance agreements with a total cost of $84.6 million for the 2010 storm season compared to the $83.6 million of reinsurance costs for the 2009 storm season. The total cost of the Company’s reinsurance program remained flat because it purchased additional protection to limit its retention to $15 million for the first catastrophic event and to reduce its retention to $5 million for any second or third catastrophic events.
Topics Florida Profit Loss Property Casualty
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