DCAP Group, Inc., a large chain of independent storefront insurance agencies in the Northeast, reported that first quarter 2006 total revenues were $2,867,690, a decline from the prior year amount of $3,208,073. Net income was $126,780, a reduction of $171,839 as compared to the first quarter of 2005. Earnings per diluted share were $0.04 as compared to $0.09 in the first quarter of 2005.
During the quarter, the firm felt the effects on its premium finance business of a decline in assigned risk business in New York.
Those financial results came during a quarter when DCAP Group made its first entry into the carrier segment by acquiring the surplus notes of Commercial Mutual Insurance Company. It also acquired Accurate Agency, a business with four locations in Rochester, N.Y.
“We are staying with our plan to grow our distribution network,” said Barry Goldstein, DCAP chairman and CEO. “Our entry into the Western New York region was well executed and will soon allow for us to expand our footprint elsewhere in that area.”
He said the company now has a total of 76 locations with more targets in New York, New Jersey and Pennsylvania.
“We are cognizant that the increased commission and fee revenue was less than the decline experienced in our premium finance segment, and we continue to seek to grow distribution while seeking additional products and services to capitalize on that distribution,” he added.
The premium finance segment was hurt by a drop in the number of drivers insured as high risks in the New York Assigned Insurance Plan.
“Our premium finance segment, while not entirely wedded to the flow of business in the assigned risk markets, continues to experience a decline in loan volumes originated. The NYAIP has seen its application volume decline by more than 50% from 2004 levels. We are making every effort to control our costs and seek new avenues for revenue growth in the premium finance business,” said Goldstein.
He said the company is seeking to add new lenders to offer in addition to its proprietary Payments, Inc., which is currently the only lending product distributed in its 76 storefronts.
In late January DCAP concluded the purchase of the $3,750,000 surplus notes issued by Commercial Mutual Insurance Company of Kingston, N.Y., a writer of commercial auto and physical damage coverage, as well as homeowners, fire and multi-family dwelling overages in New York State. The company intends to enter the Pennsylvania market.
“With our goal to become a more well rounded and larger distributor of insurance products and services, both CMIC and DCAP will benefit from cross marketing and product leveraging opportunities,” said Goldstein.
DCAP Group, Inc. owns a chain of independent storefront insurance agencies in the Northeast. Through DCAP Insurance, Barry Scott Insurance, Atlantic Insurance Agency and Accurate Agency DCAP Group provides automobile insurance (and to a lesser extent, motorcycle and homeowners), enhanced by premium financing capabilities, to retail customers in New York, New Jersey, and Pennsylvania. Other products include automobile club service for roadside emergencies and income tax preparation services. As of May 16, 2006, DCAP had 76 owned or franchised storefront locations.
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