Fremont Michigan InsuraCorp Inc., a Michigan-exclusive property and casualty insurance carrier, reported revenues of $14.9 million for the first quarter of 2010, up 9.4 percent from revenues in the first quarter 2009.
Highlights for the quarter include:
- Net income of $0.57 per diluted share in the first quarter, more than triple the level of a year ago.
- Combined ratio of 96.2 percent for the first quarter, improved from 104.0 percent in first quarter 2009
- Book value per share increased 2.8 percent to $27.06 from $26.33 at the end of 2009.
- Net income for the quarter ended March 31, was $1.0 million, or $0.57 per diluted share, compared to $278,000, or $0.16 per diluted share, in the 2009 quarter.
- During the quarter, Fremont generated direct premiums written of $16.1 million compared to $14.4 million in the 2009 quarter, an increase of 11.6 percent
In the first quarter of 2010, personal, commercial and farm lines showing solid gains, but marine premiums fell slightly.
Direct premiums written for the personal segment increased 14.1 percent, with personal auto up 16.7 percent and homeowners up 9.6 percent. New business for personal auto increased just 1.1 percent compared to the exceptionally strong new business growth experienced in the first quarter of 2009, while renewals were up 19.9 percent.
Homeowner new business premiums were up 2.9 percent, with renewal premiums up 11.1 percent.
Direct premiums written for the commercial segment increased 5.4 percent due to strong renewal premiums, which increased 18.8 percent. New commercial business was down 5.5 percent in the quarter reflecting a large new account signed in the first quarter of 2009.
Farm direct premiums written increased 8.4 percent, driven by renewal business, which was up 13.1 percent. The renewals were partially offset by new business which decreased 30.8 percent, as a result of a large new business account signed in the first quarter of 2009. Premiums for the marine segment were down 4.7 percent in the first quarter.
In the first quarter 2010, Fremont generated a loss and loss adjustment expense ratio of 61.0 percent compared to 71.9 percent in 2009. The reduction in the loss experienced in the first quarter was driven primarily by a 49.7 percent decline in weather-related losses, as the winter weather experienced in Michigan in the first quarter of 2010 was milder than the weather experienced in the first quarter of 2009.
Personal lines experienced a 5.3 percentage-point drop in its loss ratio in the first quarter as a result of a 46.3 percent decline in weather-related losses partially offset by an increase in loss ratio experienced in personal auto.
The commercial lines loss ratio decreased to 53.6 percent as a result of lower weather-related losses as well as a lower loss ratio in workers compensation. The farm segment experienced a 56.9 percentage-point drop in its loss ratio as a result of fewer fire- and weather-related losses during the quarter.
Fremont’s expense ratio for the first quarter 2010 increased to 35.2 percent from 32.1 percent. The change is a result of increased agent commissions paid to top-performing agencies and increases in other underwriting expenses, including legal fees and salary and benefit costs for new hires.
Fremont has been the target of a hostile takeover bid by San Antonio-based Biglari Holdings Inc., formerly Steak n Shake Co. State legislators this year approved narrowly tailored bill designed to protect Fremont Michigan InsuraCorp from a takeover. It requires that a perceived hostile takeover of a small insurer be approved by two-thirds of the shareholders of the targeted company, rather than by a simple majority.
The company has praised Gov. Jennifer Granholm for signing the law, Public Act 61 of 2010. Thie law applies to Michigan-domiciled property and casualty insurers employing fewer than 200 people and remains in effect until May 1, 2012.
Fremont Michigan InsuraCorp Inc. is the holding company for Fremont Insurance Company. Headquartered in Fremont, Mich., the company provides property and casualty insurance to individuals, farms and small businesses exclusively in Michigan.
Source: Fremont Michigan InsuraCorp Inc.
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