Ohio-based Bancinsurance Corporation, a specialty property and casualty insurance holding company, released its financial results for the three and twelve months ended December 31, 2005.
Highlights for the 2005 fiscal year include the following:
– Record net income of $6.3 million or $1.26 per diluted share.
– Net premiums earned of $51.7 million.
– Combined ratio of 93.6 percent.
– Book value of $6.05 per share at December 31, 2005.
John S. Sokol, Bancinsurance Corporation’s president, said, “We are pleased with our record performance for 2005. Solid gains were achieved in most of our product lines and the combined ratio returned to a level more consistent with the Company’s historical performance. Investment income benefited from higher yields as a result of changes implemented during 2004, and total cash and investments at year-end 2005 exceeded $100 million for the
first time in the Company’s history. The pending arbitrations related to the discontinued bond program continue to be pursued aggressively toward full resolution.
“We are seeking to achieve further progress in our core businesses this year,” Sokol said.
Net income for 2005 increased to $6.3 million from a net loss of $8.5 million for 2004. Net income per diluted share was $1.26 in 2005 compared to a net loss of $1.72 per diluted share the prior year.
Net premiums earned increased to a record $51.7 million for the twelve
months ended December 31, 2005 from $50.1 million for 2004, benefiting from growth in the Company’s creditor placed insurance guaranteed auto protection insurance unemployment compensation and waste surety bond product lines. The year-over-year increase was partially offset by lower net premiums earned for Ultimate Loss Insurance and the discontinued bond program.
Net investment income was $3.3 million for 2005, an increase of 52.6% from $2.2 million the prior year. This improvement was due to growth in fixed income investments combined with a higher after-tax yield. Higher yields resulted from the Company’s reallocation of a portion of its portfolio from short-term investments to fixed maturities during 2004, which provided a better matching of the Company’s invested assets to its product liability duration and enhanced the Company’s investment return. Management fees rose to $713,697 in 2005 from $33,710 a year ago due to pricing actions, favorable unemployment experience during 2005 and cancellation of a poor performing account at the end of 2004.
The Company recorded discontinued bond program losses and loss adjustment expenses of $0.4 million and $20.2 million during 2005 and 2004, respectively. The most significant factor contributing to the net loss in 2004 was the significant increase in reserves for this program. The Company is disputing losses on the discontinued bond program through ongoing arbitration proceedings with certain insurance carriers that participated in the program.
Source: Bancinsurance Corp
Topics Profit Loss
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