SeaBright Revenue Up 5.2% in Q4; Up 5% for Year-End 2008

February 25, 2009

SeaBright Insurance Holdings Inc., based in Seattle, Wash., reported net income for the fourth quarter 2008 increased 2.3 percent year-over-year, to $10.2 million compared to net income of $10.0 million for the same period in 2007.

Total revenue for the quarter increased 5.2 percent to $75.9 million versus $72.2 million in the year-earlier period.

For the fourth quarter, net premiums earned increased 4.1 percent to $67.6 million compared to $64.9 million for the same period in 2007.

For the year ended Dec. 31, 2008, net income was $29.3 million compared to $39.9 million in the same period in 2007. Total revenue for the period increased 5.0 percent to $267.3 million compared to $254.4 million for the same period in 2007. For the year ended Dec. 31, 2008, net premiums earned increased 9.1 percent to $248.6 million compared to $228.0 million for the comparable period in 2007.

John Pasqualetto, SeaBright’s chairman, president and CEO said, “In light of the deepening recession and increasingly competitive insurance environment, we are satisfied with our top- and bottom-line results for the quarter and the year. The strength of our underlying earnings, while below last year, demonstrates our continued commitment to making an underwriting profit. Looking ahead to 2009 and beyond, we remain focused on conservative investments, exceptional customer service and disciplined underwriting.”

The net loss ratio for the fourth quarter of 2008 was 59.2 percent compared to 58.5 percent in the same period of 2007. During the fourth quarter 2008, on a pre-tax basis, the Company recognized $1.3 million in reserve strengthening of prior years’ loss reserve estimates. During the fourth quarter of 2007, on a pre-tax basis, the Company recognized $7.2 million in favorable development of prior years’ loss reserve estimates.

Total underwriting expenses for the fourth quarter 2008 were $20.5 million compared to $16.4 million in the prior year period. The net underwriting expense ratio for the fourth quarter was 30.2 percent compared to 25.3 percent in the same period in 2007. The increase in the underwriting expense ratio over the same period in 2007 is primarily the result of increased production expenses related to SeaBright’s geographic expansion and broadened product offerings.

The net combined ratio for the fourth quarter of 2008 was 89.4 percent compared to 83.8 percent for the same period in 2007.

Net investment income for the fourth quarter of 2008 was $5.8 million compared to $5.5 million for the same period in 2007 as the Company continues to record strong cash flow from operations.

The net loss ratio was 56.7 percent for the year ended Dec. 31, 2008 compared to 55.5 percent in the same period in 2007. For the year ended Dec. 31, 2008, on a pre-tax basis, the Company recognized $19.7 million of favorable development of prior years’ loss reserve estimates, compared to $27.7 million in 2007.

Total underwriting expenses for the year ended Dec. 31, 2008 were $71.2 million compared to $58.9 million in the prior year period and the net underwriting expense ratio was 28.5 percent compared to 25.8 percent in the same period in 2007. The increase in the underwriting expense ratio over the same period in 2007 is primarily the result of increased production expenses related to SeaBright’s geographic expansion and broadened product offerings.

For the year ended Dec. 31, 2008, the net combined ratio was 85.2 percent compared to 81.3 percent for the same period in 2007.

Net investment income for the year ended December 31, 2008 was $22.6 million compared to $20.3 million for the same period in 2007 as the Company continued to record strong cash flow from operations for the year of $66.9 million.

At year-end 2008, SeaBright had 1,122 customers, an increase of 17.7 percent compared to the same period in 2007. At Dec. 31, 2008, the average premium size per customer was approximately $248,000 compared to approximately $282,000 at Dec. 31, 2007, a reflection of SeaBright’s continued geographic diversification of its business and lower premium rates related to the decline in loss costs.

Source: SeaBright Insurance Holdings Inc.,
www.sbic.com

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