New Jersey-based Preserver Group announced a third quarter net after tax loss of $199,860, and a nine month net after tax loss of $306,247, even as it noted that its operations in the State’s private passenger automobile market were improving due to regulatory concessions.
While Preserver’s losses from the Sept. 11 attacks were fairly minimal, they were enough to push figures for the quarter into the loss column. The company estimates its net losses after reinsurance recoveries at $425,370.
Excluding these losses Preserver had net income of $225,510 in the third quarter and $119,123 net for the nine months ended Sept.30. The company attributed the decrease in revenue to “continuing higher loss ratios in the Motor Club Unit and in the transportation and restaurant classes at Mountain Valley, due to a number of severe losses.”
The announcement noted that there had been some improvement in its Motor Club unit in the New Jersey auto market as a result of relief from certain conditions accorded to the company last July by the New Jersey Department of Banking and Insurance. Concerned over Preserver’s deteriorating financial condition the Dept. exempted Motor Club from guidelines for accepting new business from the State’s urban enterprise zones, as it had written a disproportionately high number of policies in those areas (double its required amount).
A.M. Best had downgraded Motor Club’s ratings as a result of its deteriorating loss ratio. The NJDBI also allowed the company not to renew a number of policies, and gave it relief from requirements for assigned risk business. This month the Dept. gave Motor Club permission to modify its rate structure. It plans to increase its liability rates by 6 percent and to decrease its physical damage rates by approximately 5 percent.
It also announced that it was reducing its commission rate on new business from 10 to 7 percent. The earnings announcement stated that, “The Company believes that these changes, all of which take effect in December 2001, will assist in improving Motor Club’s financial condition.” New Jersey private passenger automobile business accounts for 42 percent of the group’s consolidated revenues.
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