Penn-America Says Second Quarter Record Results Reflect Firm Pricing in E&S Lines

July 28, 2004

Penn-America Group, Inc. in Hatboro, Pa., (NYSE: PNG ) reported record operating income of $4.8 million or $0.32 per share for the second quarter of 2004 compared with operating income of $3.7 million or $0.25 per share for the second quarter of 2003.

Net income for the second quarter of 2004 increased to a record $4.9 million or $0.33 per share and included a net realized investment gain, after taxes, of $0.1 million.

Gross written premiums increased 19.2 percent to a record $64.9 million in the second quarter of 2004 compared with $54.5 million for the same period in 2003. Net written premiums increased 24.2 percent to a record $57.0 million in the second quarter of 2004 compared with $45.9 million for the same period in 2003. The GAAP combined ratio for the second quarter of 2004 was 91.7 compared with 92.5 for the second quarter of 2003.

Commenting on the 2004 operating results, Jon S. Saltzman, president and chief executive officer, noted, “Our continued strong operating performance demonstrates that our small commercial niche in the excess and surplus lines marketplace has not experienced the price softening reported by other commercial insurers in 2004.”

Saltzman said that for the first six months of the year, the company averaged a five-percent price increase, achieved a 36.0 percent growth in gross written premiums and “produced record results in virtually every financial measure that we use to judge our success.”

Operating income, a non-GAAP financial measure, is calculated by subtracting net realized investment gain, after taxes, from net income. The company uses operating income, among other measures, to evaluate its performance because the realization of net realized investment gains or losses in a given period is largely discretionary as to timing and could distort the comparability of results.

For the six months ended June 30, 2004, the company reported operating income of $9.1 million or $0.62 per basic share and $0.61 per diluted share compared with operating income of $6.8 million or $0.47 per basic share and $0.46 per diluted share for the six months ended June 30, 2003. Net income for the first six months of 2004 increased to $9.6 million or $0.65 per basic share and $0.64 per diluted share and included a net realized investment gain, after taxes, of $0.5 million. Net income for the first six months of 2003 was $7.6 million or $0.52 per basic share and $0.51 per diluted share and included a net realized investment gain, after taxes, of $0.8 million.

Gross written premiums increased 36.0 percent to $129.0 million for the six months ended June 30, 2004 compared with $94.9 million for the same period in 2003. Net written premiums increased 40.8 percent to $112.5 million for the six months ended June 30, 2004 compared with $79.9 million for the same period in 2003. The GAAP combined ratio for the six months ended June 30, 2004 was 92.2 compared with 93.7 for the same period in 2003.

Penn-America Group, Inc. is a specialty property and casualty insurance holding company that markets and underwrites general liability, commercial property and multi-peril insurance for small businesses located primarily in small towns and rural areas through a select network of wholesale general agents in the excess and surplus lines market.

Was this article valuable?

Here are more articles you may enjoy.