The Commerce Group, Inc. (NYSE:CGI ) reported 2004 first quarter results including et earnings of $51.0 million, or $1.56 per diluted share, compared to net earnings of $12.9 million or $0.40 per diluted share for 2003.
During the first quarter of 2004, the company had net realized investment gains of $20.5 million or $0.41 per diluted share compared to losses of $5.8 million or $0.19 per diluted share in the first quarter of 2003.
Earned premiums were $395.6 million for the first quarter of 2004 compared to $338.0 million for 2003.
The first quarter GAAP consolidated operating combined ratio was 93.7% compared to 100.8% for 2003. The decrease in the combined ratio was the result of a decrease in the loss ratio, partially offset by an increase in the underwriting ratio. The company’s GAAP consolidated loss ratio for the first quarter of 2004 decreased to 71.3% from 81.2% during the same period last year. The improvement was the result of several factors, including: an increase in average earned premium revenue per automobile; a decline in the current year personal automobile physical damage claim frequency; and a decrease in the overall Commonwealth Automobile Reinsurers (C.A.R.) deficit.
The company’s GAAP consolidated underwriting ratio increased to 22.4%, as compared to 19.6% for last year’s first quarter, primarily as a net result of higher accrued contingent commissions offset by lower 2004 policy year mandated Massachusetts personal automobile commission rates.
At March 31, 2004, the company had authority to purchase approximately 280,000 additional shares of common stock under the current Board of Directors’ stock re-purchase authorization. During the first quarter, the company purchased 294,665 shares of treasury stock at an average price of $45.93 per share as a result of option exercises. The company issued approximately 383,000 shares of common stock related to these option exercises.
The Commerce Group, Inc. is headquartered in Webster, Massachusetts. Property and casualty insurance subsidiaries include The Commerce Insurance Company and Citation Insurance Company in Massachusetts, Commerce West Insurance Company in California, and American Commerce Insurance Company in Ohio. Through its subsidiaries’ combined insurance activities, the company is ranked as the 20th largest personal automobile insurance group in the country by the “Auto Insurance Report,” based on NAIC 2003 direct written premium information.
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