Penn-America Posts $5.7 Million Net Operating Income for 2001

January 24, 2002

Penn-America Group, Inc. (PAG) reported operating income of $2.1 million or $0.27 per share (basic and diluted) for the fourth quarter of 2001, the fifth consecutive quarter with positive results, giving it a total net operating income for the year of $5.7 million.

PAG’s experience in cutting unprofitable lines and controlling costs could offer some tips to other insurers. Starting in 1999 it withdrew from its non-standard personal automobile business and, in October 2000, announced that it was exiting the commercial automobile lines as well. It also stopped writing residential contractor classes of business.

However, as the company’s announcement noted, “Excluding these exited classes, gross written premiums increased 21.9 percent in the fourth quarter of 2001 compared with the same period of 2000. Net written premiums for core commercial lines increased 13.1 percent to $24.1 million in the current quarter compared with $21.3 million in the same period of 2000.

PAG’s combined ratio fell from 109.1 in the 4th quarter of 2000 to 98.9 last year. Jon Saltzman, president and CEO stated that, “This is our fifth consecutive quarter of quarter-over-quarter earnings growth. During 2001 market conditions hardened, price increases accelerated and our agents experienced strong new business growth. We believe we are well-positioned to take advantage of a very favorable insurance marketplace in 2002.”|”penn-america, posts, $5.7, million, net, operating, income, 2001

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